Ministers ‘out of touch’ with business, say pub bosses
Scottish ministers are “out of touch” with the business community despite pledges to listen to concerns over high costs and regulation.
A survey by the Scottish Licensed Trade Association (SLTA) showed that almost all respondents (96%) felt a lack of understanding from the government.
The survey also revealed the that staff shortages and difficult trading conditions meant 57% will not be fully opening until March.
The data emerged just days after brewer and pubs group Innis & Gunn closed its outlet in Leith, blaming the decision on rising costs and Scotland’s high business rates compared to England.
The taproom at The Shore in Leith shut two weeks ago and is the latest setback for the Edinburgh-based business which closed its Dundee Taproom last summer and has also closed its St Andrews outlet. The company reported a big annual loss the 2022 calendar year.
Steve Drew, managing director for Innis & Gunn Hospitality Group, said: “We made the decision to close our Innis & Gunn Brewery Taproom at The Shore in Edinburgh, it happened on the 17 January.
“Whilst we saw growth across many of our key business channels last year, trading conditions for the entire hospitality industry, including our Taproom business, have been exceptionally challenging.
“The disparity in business rates relief between England and Scotland, coupled with escalating costs from energy suppliers and the impact of the continuing increased cost of living expenses, have unfortunately made it unviable to keep the shore site trading.”
The research from the SLTA echoes research last year from the Fraser of Allander Institute which found that 64% of companies across all sectors felt that the government did not understand the business environment.
There has been particular criticism of higher income taxes and a failure to pass on non-domestic rates reliefs of up to 75% for the hospitality sector which are available in England. Business rates are due to go up further and there are new plans for a “grocer’s tax” on those selling alcohol, as well as taxes on visitors and workplace parking.
First Minister Humza Yousaf’s new deal for business was created to help rebuild relationships but trade bodies feel ministers ignore their messages.
Colin Wilkinson, the SLTA managing director, said: “Our survey is based upon quantitative research from outlets covering the length and breadth of the country and is supported by major food and drink chains and independent pubs, bars and hotels in Scotland’s licensed hospitality sector.
“The outlook for the licensed hospitality trade in 2024 remains extremely challenging with continuing financial pressures on the sector, chronic staff shortages, high energy prices and a continuing cost of living crisis.
“While there was a flicker of optimism among some respondents, this was against a relatively poor year and 22% of respondents reported a decline in trading of over 10%.
“While Christmas was not quite as bad as expected in some areas, it certainly was not what was hoped for. New Year, however, was poor, even for some city centre pubs including in Edinburgh with its winter festival offerings.
“There were reports of increased footfall and spend in some areas of the country, but then operators have had to increase prices due to cost pressures.”