It always astounds me when politicians don’t consider the unintended consequences of what they think will be a great vote winner. The increase in the minimum wage, announced last week by UK Chancellor Jeremy Hunt, which is far in excess of what was first planned, is a prime example. which is far in excess of what was first planned, is a prime example.
Yes, employees in the hospitality industry may get more initially in their pay packet, but this also means they will be taxed more. It also means that hospitality operators will see their staffing costs soar… which will mean costs to customers will ultimately have to go up. You will have to sell a lot more food and drink to come anywhere near meeting the costs of this increase, for a hospitality business employing 20 people it will add approximately £40K to the annual wage bill. and of course, that could lead to a rise in inflation.
That is before you factor in energy increases or indeed rates. That’s why it is so critical now that the Scottish Government in its December budget, follows the example of the UK Government and give a 75% rates discount.
This is no time for posturing – the Scottish Government needs hospitality to flourish in Scotland and quite frankly it won’t if the rates bills for hospitality are not reduced.
The Scottish Hospitality Group, a group whose members have a collective turnover of £600m and employ 6,000 people, is running a campaign ahead of the Scottish budget to raise awareness of the substantial financial challenges facing the industry.
Its campaign ‘Save Our Hospitality’ had three asks one of which is for a 75% rates discount. SHG asked people around the country to write to their MSP’s, and many have done so. And while some MSP’s have responded to say they will support the campaign. Others such as Green MSP Maggie Chapman has already said she will not back it. Others thankfully, comprehend the challenges facing hospitality and the knock-on effect not reducing rates could have on jobs.
To be absolutely clear – and most of you know this – but here it is in black and white…
In 2022 English hospitality operators got 50% rates relief for a year, in Scotland we got it for three months. In November 2022, the UK Government extended it to 75% for the financial year 2023-24. As did the Welsh Government. The SNP did not use the extra funding received by the UK Government in its Barnett consequentials to give hositality the rates discount.
SHG is asking for the Scottish trade to be treated with the same respect as their English and Welsh counterparts. Is this too much to ask?
How much does the Scottish Government appreciate the contribution that that Scottish hospitality makes to the economy? If they don’t do something about rates – they will certainly jeopardise jobs in the sector and it could be far more than the estimated job losses at Grangemouth.
If you want to get involved with the campaign which also asks for – A permanent, fairer deal for hospitality: a reform of business rates permanently, creating a new category for hospitality with a 35p multiplier and a new partnership with Government – and the formation of a Ministerial Working Group – head along to sos.scottishhospitality.com
