Hospitality ‘betrayed’ as Budget fails to replicate UK business rates relief

Small businesses in Scotland have been “betrayed” after the Scottish Government failed to replicate business rates relief pledged south of the border, campaigners have warned.

Scottish Finance Secretary Shona Robison announced in her Budget on Tuesday that business rates for premises valued under £51,000 would be frozen, while island hospitality businesses would be given a 100% relief – moves which were welcomed by industry.

But the Night Time Industries Association (NTIA) Scotland said the measures do not go far enough and prove that earlier Scottish Government pledges to “turn the dial” on its relationship with business were “little more than a talking shop”.

Ms Robison’s failure to outline a 75% business rates relief on hospitality, leisure and retail premises was described as a “missed opportunity” after campaigners issued an “SOS” alert to ministers ahead of the Budget.

Speaking in Holyrood, Ms Robison said the Scottish Government was prioritising health funding instead of business tax cuts.

However, a spokesperson for NTIA Scotland expressed “profound disappointment”, saying Scottish business closures are now running at double the rate of those in England.

“It is now clear that the Scottish Government’s so-called New Deal for Scottish Business is little more than a talking ship for ‘big’ business to lobby for maintenance of the poundage rate, while Scotland’s small businesses are betrayed and left up to £100,000 a year worse off for the third year in a row compared to their colleagues south of the border,” the NTIA said.

The group added that long-term business rates reform will likely be “too little, too late” for many premises, with those which do survive facing “inevitable” job cuts.

Leading tourism and hospitality bodies, including the Scottish Tourism Alliance and UKHospitality Scotland, said: “The Scottish Government has squandered a golden opportunity to support one of the country’s most important sectors for the second year in a row.

“The 100% rates relief which has been announced for hospitality businesses in our island communities is welcomed, given the economic disruption these businesses have experienced from years of under-investment in our ferry infrastructure.

“However, this measure falls very short of what has been expected. It is an extreme disappointment for tourism and hospitality businesses across Scotland.

It is now clear that the Scottish Government’s so-called New Deal for Scottish Business is little more than a talking shop

“The lack of business support measures will see many thousands of tourism and hospitality businesses facing acute financial challenges in the next year, tipping many into crisis.”

Meanwhile, the Federation of Small Businesses (FSB) welcomed the protection of the Small Business Bonus Scheme (SBBS).

However, FSB Scotland policy chair Andrew McRae said: “The big missed opportunity is the decision not to replicate the same targeted relief afforded to those in retail, hospitality and leisure in England to small traders north of the border.”

The organisation went on to predict business closures could be on a par with the numbers lost during the Covid-19 pandemic without additional support.

Ms Robison fired back at Scottish Conservative MSP Murdo Fraser who raised the difference in business support compared to England.

He said: “Doesn’t this just leave the much vaunted new deal for business in taters, and leave the position of the Economy Secretary in this Cabinet utterly untenable.”

She replied: “Let’s be clear – Murdo Fraser has just put on the record that the Tories wanted us to follow the UK Tory Government spending plans which would have meant that out of the £320 million available in consequentials (funding provided by the UK Government to devolved nations) this year, £260 million of that would have gone on tax cuts for business – not the NHS.

“Business tax cuts over NHS funding. That is not the priorities of the Scottish Government.”

Earlier in her statement, Ms Robison recognised the “unique challenges” facing by the hospitality sector, particularly in island communities.