If Northern Ireland can help struggling hospitality businesses, why can’t Scotland?

Eighty per cent of respondents said their costs have increased with 90 per cent expecting further rises during 2026. The major concerns were employee costs, including wages, pensions and employers’ National Insurance. The survey also found a decline in levels of employment and weaker sales and revenue during the period which, for retail and hospitality, should be the busiest part of the year.

Looking ahead, 80 per cent of respondents expect weak or very weak levels of growth in 2026, citing economic uncertainty, political instability and the lack of availability of skilled staff as areas of concern.

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On the brink of collapse

Nowhere are these concerns felt more strongly than in the hospitality sector. I mentioned in this column last week figures from the trade group UK Hospitality Scotland which revealed the significant increases in business rates set to hit pubs and hotels from April.

The current revaluation will see the average pub in Scotland face a rates bill increase by £36,523 across the next three years, whereas for hotels the rise is even greater with the average set to be £68,007. These increases are in addition to rising costs elsewhere, including the cost of employing staff, employers’ National Insurance, and energy prices.

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It is a reality that many of Scotland’s pubs and hotels are on the brink of collapse after being hammered by tax hikes for years, both from Labour at Westminster and from the SNP in Holyrood.

It is for these reasons that this week the Scottish Conservatives launched a campaign to save our pubs, calling for immediate and meaningful support from the SNP for the hospitality sector. If they fail to do so, many pubs will be forced to call last orders, causing untold job losses and taking the life out of our communities.

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Loss of community gathering places

This is not simply an economic issue. Pubs and hotels play a part in our vital tourist economy, and also act as a social hub for communities, particularly in rural areas. Too many villages over the years have seen the local school close, followed by the newsagent and grocer’s shop.

Now, with a period of Church of Scotland rationalisation, the church may well be closing its doors and the building going up for sale. That might leave the local pub or small hotel as the last place where the community can gather, and even that now is under threat.

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Last week the UK Chancellor Rachael Reeves announced a £100 million-a-year package of support for pubs south of the Border, including a 15 per cent cut in rates. That will generate Barnett consequentials for the Scottish Government, and we await to hear from the Finance Secretary Shona Robison how exactly that additional sum will be allocated.

But even that will not go far enough. In line with our colleagues in England, Conservatives here want to see 100 per cent rates’ relief for hospitality businesses with a rateable value below £100,000, covering the vast majority of small- to medium-sized enterprises.

In addition, there needs to be action on the current revaluation, which is delivering such staggering increases in rateable values from April. It is clear that the current methodology applied to assessing rateable values for hospitality premises is no longer fit for purpose, based as it is on projected turnover figures, and taking no account of business profitability.

The Scottish Government has indicated a review of methodology, but this will not conclude until the end of the current year, and in any event will not apply until the next revaluation cycle in 2029. Scottish businesses simply cannot afford to wait that long. If the current revaluation is allowed to proceed, we will see a collapse in the sector.

Northern Ireland’s different approach

It is not just in Scotland that hospitality businesses are feeling these pressures. Last week, the Northern Irish finance minister, John O’Dowd, responding to concerns from the industry there, announced a pause in the revaluation affecting hospitality. Next year’s rates will be calculated on the current valuation, and the pause will allow a reconsideration of the system.

Announcing the change in approach, O’Dowd recognised that these local businesses were “the backbone of our local economy”. He went on to say that, having listened carefully to the concerns raised with him and the Northern Irish Executive, it was only “right and proper” that the process be halted to allow a “stage for engagement with those businesses and others to set out a way forward which will deliver a fair and equitable rates process”.

This announcement was warmly welcomed by the sector, who gave the minister credit for listening to their concerns. However, it was also recognised that this was only a pause, and real meaningful change needed to be delivered.

It is good to see the Northern Irish Executive taking this approach, which piles pressure on the Scottish Government to do the same. That is exactly what the Scottish Conservatives are calling for this week. If a Sinn Fein finance minister in Northern Ireland can take this action, why can’t an SNP Finance Secretary in Scotland do the same?

Scottish hospitality is at a crossroads. If the SNP are not prepared to change direction, then the level of losses we will see, both in terms of folding businesses and lost jobs, will be catastrophic. The Scottish Conservatives will be relentless in pushing the SNP for a change of direction to save our pubs.

Murdo Fraser is a Scottish Conservative MSP for Mid-Scotland and Fife