Hundreds of bars, restaurants and hotels have shut down or been left ‘teetering on the brink’ because of the SNP’s punishing tax regime, hospitality chiefs have warned.
Many more are being turned into ‘zombie’ businesses as they cut back on menus and opening hours just to make ends meet amid the spiralling costs.
Industry leaders last night said the futures of family-run businesses were on a precipice because of the Scottish Government’s refusal to offer any relief from sky-high rates.
Michelin-starred television chef Nick Nairn warned that some of the country’s most celebrated restaurant and bar owners were increasingly giving up the struggle to stay afloat.
He blames the failure of the SNP Government to help the industry to recover from the damaging Covid period and the resulting cost of living crisis. Nairn said: ‘I talk to my colleagues regularly, and the phrase I hear the most is, “Why do we bother? Why are we doing this? There must be a better way”.
Deputy First Minister Shona Robinson decided against a 75 per cent business rates relief to hospitality, retail and leisure firms
‘If I’m honest, I think we’re all seeing what has been happening in Scotland for a long time now.
‘People have been scared to open their mouths, to question things, because there has been a culture of secrecy, a culture of obfuscation.
‘There is also a culture where people who stick their heads above the parapet and question the edict of the day are punished.’
It is estimated that nearly 3,000 hospitality businesses closed in the UK last year, many of them north of the Border. The sector in Scotland had hoped Deputy First Minister Shona Robison would throw it a financial lifeline.
But industry leaders felt ‘betrayed’ by the SNP’s December Budget when she decided against following a £2.6billion commitment by Chancellor Jeremy Hunt to give 75 per cent business rates relief to hospitality, retail and leisure firms south of the Border.
This was despite the Scottish Government receiving a massive boost to the block grant as a direct result of the move.
Scottish Tory finance spokesman Liz Smith said: ‘This latest bleak picture painted by Scotland’s hospitality sector should be heeded urgently by the SNP.
‘Their continued stubbornness and failure to pass on 75 per cent rates relief to the industry – as has been done south of the Border – is meaning businesses are closing their doors at an alarming rate or cutting back on hours.
‘The SNP have the funding to do this with a record block grant from the UK Government and it is time they did so before more businesses are pushed beyond breaking point.’
The lack of support means Scottish pubs will be an estimated £15,000 worse off than their counterparts in England, while a medium-sized hotel could be close to £30,000 worse off.
Leon Thompson of UKHospitality Scotland, said many outlets were ‘teetering on the brink’, while others were operating drastically reduced hours, ‘effectively turning themselves into zombie businesses’. He added: ‘We’re missing such a huge opportunity in Scotland just now. Our industry has so much potential to grow.’
Beer giant Innis & Gunn, which shut down its flagship pub in Leith last month, cited rising rates for its decision, something echoed by a number of struggling businesses.
Scottish Tory finance spokesman Liz Smith said the warning from hospitality sector leaders ‘must be heeded urgently by the SNP’
Other post-Budget casualties include Scamp and The Beer Café in Glasgow, and Aberdeen’s Olive Alexanders and Barbelow, which said in a social media post that the owners were ‘absolutely broken’ over the closure, and blamed lower footfall as well as rising business costs.
Scottish Liberal Democrat economy spokesman Willie Rennie said the food and drink sector faced ‘mountain after mountain of challenges’, while the SNP had ‘prioritised the wrong things’ and ‘wasted money pointlessly’.
He added: ‘It’s about time the Scottish and UK governments worked together to support struggling businesses and ease a national crisis in Scotland’s hospitality industry.’
Scottish Labour economy spokesman Daniel Johnson said: ‘Hospitality businesses across Scotland are struggling with economic turmoil at the hands of two failing governments.
‘Businesses desperately need stability and leadership from government, but the incompetence of both the SNP and the Conservatives is damaging businesses and holding back Scotland’s economy. The ad hoc approach to business rates relief is failing businesses.’
A Scottish Government spokesman said: ‘There have been calls to replicate non-domestic rates retail, hospitality and leisure relief available to businesses in England.
‘While Scottish ministers are sympathetic to these calls, doing so would have meant that the Scottish Government could not provide the NHS, schools or emergency services with the funding they require.’