Coastal Tourism and Hospitality: Fiscal Support

Steven Bonnar Excerpts

Thursday 22nd February 2024 Westminster Hall

[Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)]

It is a pleasure to see you in the Chair, Mrs Cummins. I thank the hon. Member for North Devon (Selaine Saxby) for securing this debate. It is always a pleasure to come to Westminster Hall and give the Scottish National party perspective.

The hospital sector across coastal and rural communities has weathered relentless storms of financial hardship over the past few years. Surely the UK Government must now extend a helping hand via Barnett to businesses across the hospitality sector, because it is so important to the long-term success of our rural communities and remote areas, and to halting the continued closure of hospitality venues to which we have all become accustomed throughout our constituencies.

From the economic fallout of Brexit to the devastating impact of the pandemic, compounded by energy price shocks and inflationary spikes, our pubs, restaurants and cafés have been fighting an uphill battle for their very survival. The multifaceted challenges that they are confronting have been unprecedented. As a result, between March 2020 and the end of 2022, a staggering 10% of UK hospitality businesses closed their doors permanently. In Scotland alone, more than 500 pubs and breweries closed in 2023, and the struggle persists for many more. Many of them cite rising energy costs: nine out of 10 hospitality businesses now face far higher energy and supplier costs.

The negative impacts of Brexit on rural and coastal communities are never hard to find these days. The compounding effects of border controls on fresh food and flowers to and from the European Union further exacerbate the situation, burdening Scottish hospitality with over £500 million in increased costs and delays annually. Inflation is undoubtedly a key factor in consumer choices. With the increased energy costs, the picture is bleak for many in the industry.

As representatives in this Chamber of many diverse and different communities, we all recognise the part that venues play in local areas. Pubs and cafés are essential social hubs that foster community cohesion and combat loneliness. They are places that connect our communities and bring people together to share life’s highs and lows. The Scottish hospitality sector is also a massive employer, accounting for 8% of all workforce jobs, employing more than 220,000 individuals and contributing £140 billion to the economy and £54 billion in tax receipts.

Another issue of great concern, particularly in Scotland, is depopulation in our rural and coastal communities. Experts tell us that it threatens their very existence. We know that the UK Government’s legal migration policy does nothing to draw people into our coastal or rural communities, because the median wage in a place like the Western Isles in Scotland is £24,000, but anybody looking to come into the UK will have to earn a lot more than that, which basically means that huge parts of Scotland will have no inward migration. That is a real concern for us, which the Scottish rural visa pilot scheme championed by the Scottish Government aims to address by attracting workers to key sectors such as hospitality.

Brexit-induced labour shortages persist, with 72% of hospitality businesses struggling to fill their vacancies. Across Scotland, the vast majority of people in the hospitality sector came from among our friends in the European Union. The UK Government’s reluctance to heed the calls for special visa arrangements exacerbates the issue and is imperilling the Scottish economy further. The SNP has consistently advocated for fiscal measures to be enacted to alleviate the strain on the sector. As we have heard today, VAT reductions, particularly for hospitality and tourism, could provide much-needed relief; I hope the Minister has heard that from all sides today. Additionally, slashing beer duties could stimulate job creation, benefiting businesses and individuals.

The Scottish Government have implemented measures such as the 100% relief for island hospitality businesses, but broader support is still very necessary. The small business bonus scheme and the generous rates relief exemplify the commitment to support businesses and communities across Scotland. The Conservatives’ proposed tax cuts for the wealthy diverge wildly from the public’s preference for prioritising public services, as a recent YouGov poll evidences.

We must ensure that the upcoming spring Budget allocates resources where they are needed most, supporting this vital sector and safeguarding our rural and coastal communities across Scotland. If the Government here in Westminster do not want to stand up for and stand with our hospitality industry, ensuring its resilience and longevity for generations to come, the very least they can do is give Scotland full fiscal powers so we can do the job that they are not doing.