The First Minister stands accused of throttling the life out of Scottish businesses who face going bust in a new post-pandemic financial crunch.
Owners of restaurants, pubs, clubs, hotels and spas are among the worst hit and are laying the blame at the door of Nicola Sturgeon as they see their counterparts south of the Border benefit from hefty tax cuts.
A 75 per cent reduction in business rates could be the difference between survival and failure for some Scottish companies.
Many have been unable to get this far. Between October and December last year there were 313 company insolvencies in Scotland, 19 per cent higher than in the same quarter of 2021 and the highest number since the fourth quarter of 2011.
One cross-border family business has told The Herald it faces a tax bill of £75,000 for its Scottish spas that would currently be zero south of the Border.
Michael and Becky Lumsden, owners of the Edinburgh-based PURE Spa & Beauty, run 21 spas across the UK and employ over 200.
“In England and Wales businesses are receiving 75 per cent rates relief in the year 23/24 up to a maximum of £110,000 of relief per business,” Mr Lumsden said. “The Scottish Government have not announced any rates relief for retail, leisure and hospitality businesses. This decision leaves our business out of pocket by £75,000 relative to equivalent English and Welsh businesses.”
He said: “Obviously, the relief is in recognition of the difficulty facing businesses with the energy cost crisis, inflation, wage increases and the impact of reduced consumer spending. The UK and Welsh governments rightly recognise the fragility of the retail, hospitality and leisure sectors which are still in the early stages of recovery from the pandemic.
“Many businesses including our own are facing hefty loans stemming from the pandemic that must be repaid from earnings and as a result have no way of managing to pay the full business rates imposed.”
The Herald business team this week highlighted the extent of the squeeze in a startling special series.
The chief of one of Scotland’s oldest family-owned hostelries said government needs to “take their hands off my neck” and allow the hospitality industry to re-invest.
Kris Clark of the George Hotel in Inveraray, which has been run by his family since 1860, said there appears to be a “lack of political will” to address the pressures.
Colin Wilkinson, Scottish Licensed Trade Association managing director, said that “three out of five outlets are operating restricted hours” and reported energy increases of over 250 per cent”.
Holyrood should put hospitality front and centre of the recovery.
Alan Tomkins, whose family own and operate Vroni’s, Ralph & Finns and Malo, said there is an opportunity for hospitality to be supported as a key driver of the economy.
The Scottish Government said it had delivered “the number one ask of the business community by freezing the [business rate] poundage”.
There should be victories to be had going forward.
The DRG, which operates the Di Maggio’s, Amarone, Café Andaluz and Anchor Line brands, this week posted a surge in profits and turnover as its figures brought promise after the effect of coronavirus-related restrictions.
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