The failure of the Scottish Government to follow the UK and Welsh Governments lead and offer a 75% reduction in rates for 23/24, will mean an average Scottish pub owner will be worse off than its English and Welsh counterparts to the tune of approximately £13,500.
The DRAM asked one of the UK’s leading pub companies the difference in operating costs between an average English pub in its estate and one from its Scottish portfolio. A spokesperson said, “Based on the average RV across the whole leased estate in Scotland, a similar estate type in England would be £13,500 per pub better off for the year 2023/24.
“The Scottish Government also increased the threshold for small business relief exposing more pubs to paying 100% rates this coming year.
“Lastly, the poundage in England is £0.512 compared to the higher rate of £0.575 in Scotland, means we would have been worse off regardless.”
The news comes as the UK Government revealed its new Energy Bills Discount Scheme which will see energy support for hospitality decreasing significantly. Stephen Montgomery, spokesperson for the Scottish Hospitality Group says, “This month’s announcement on energy support will do nothing for the morale of entrepreneurial hospitality operators across Scotland. With support decreasing from £75 per Mwh to £6.97 for gas, and from £211 per Mwh to £19.61 for electricity from April 2023 an average pub will receive approximately £2,300 for 12 months.
“Hospitality businesses in Scotland are also not getting the 75% rates discount that our colleagues in England and Wales will receive for 2023/24. This along with further wage inflation in April, rising supplier costs, the incoming costs of DRS in August, coupled with a cost-of-living crisis, leaves Scottish Hospitality yet again hanging on a cliff edge.”
He continued,” There will be many operators in Scotland who will now be reassessing their plans for expansion or investment, which creates new jobs, and thinking that the ring-fenced funding will be now needed to see them through this crisis. The Scottish Government must now step in and fully support the sector, by at least reversing its decision on the rates discount for 2023/24, before we see a multitude of failing businesses, and unemployment.”
While UKHospitality Chief Executive Kate Nicholls has also said, “While I’m relieved the Chancellor has listened to UKHospitality’s concerns and extended the scheme as a whole, the absence of a sector-specific package that helps vulnerable sectors like hospitality will still result in higher bills. Our analysis shows the new, lower level of support will see a total £4.5 billion hike in bills for the sector compared to the previous scheme.
“This will simply be unsustainable for many. With no further, dedicated support for a vulnerable sector like hospitality, I’d urge the Government to consider other measures it can take to help the sector.”
However she is concerned that energy suppliers may take this opportunity to hike prices further. She said, “This scheme is a significant investment from the Government and energy suppliers should not be using that as an excuse to hike up prices. The Ofgem review into the non-domestic market should serve as a wake-up call to suppliers that now is the time to be reasonable with the quotes they’re offering and to abandon unfair demands of businesses to secure fixed deals. They should also consider allowing businesses to renegotiate if they are stuck on previously agreed, inflated fixed deals.”
