Open letter to the First Minister from retail, leisure and hospitality business owners in Scotland

Dear First Minister,

?Please see attached a letter from business owners in Scotland from the retail, leisure and hospitality sectors regarding non-domestic rates relief. The letter is signed by owners and business leaders representing circa 1,000 businesses in Scotland.

?We are family owned, small to medium size Scottish businesses and we employ tens of thousands of people, generating the jobs, income, and taxes that are at the heart of the Scottish economy.

?Today First Minister you have been quoted as saying ‘during these challenging times, the people of Scotland need a Government that is on their side. In the coming days, we will outline our measures to support businesses and communities to unleash potential and promote entrepreneurship – helping provide well-paid jobs right across Scotland, and boosting national and local economies.’

?We are encouraged by your words because we are all entrepreneurs and we already provide ‘well-paid jobs right across Scotland, boosting national and local economies’.

?We don’t ask for much from the Scottish Government. All we really want is to operate on a level playing field with businesses in the rest of the UK. On nondomestic rates this year there is no level playing field for us. We are paying four times the level of nondomestic rates as our counterpart businesses in England and Wales, up to ￡110,000 more per business.

?Whilst the words of support in your statement yesterday may be well intentioned, immediate action is required to reverse the decision of your predecessor as First Minister who on 6 December 2022 secretly decided that the Scottish Government would not pass on any nondomestic rates support for retail, leisure and hospitality businesses, despite having received ￡200 million in Barnett consequential payments resulting from 75% rates relief given by the UK Government in the Autumn budget to English businesses. This 75% rates relief was quickly passed on in full to Welsh businesses by the Welsh devolved Government.

?The email below, discovered under a Freedom of Information request, highlights the secrecy and sensitivity relating to this decision, and gives businesses every right to be cynical about any statements on business support from the Government in Scotland. Clearly under your predecessor our businesses of Scotland did not have ‘a Government that is on their side’.

?As the new First Minister, you have the opportunity and, if your words yesterday mean anything, obligation to set this injustice right and give businesses in Scotland the same nondomestic rates relief as is helping equivalent businesses in other parts of the UK.

?Our businesses are under severe financial stress from the steep repayments required on Covid loans, rising interest rates, energy bills more than double historical levels, rampant inflation, wage pressure, and labour shortages. The majority of our businesses do not benefit from the small business bonus scheme. In fact, many of us compete with the SBBS beneficiaries, leaving us at a competitive disadvantage in Scotland as well as the UK.

Please take the time to read our letter.

?We will be delighted to engage further with the Scottish Government on its goal of improving relationships with business, but for the sake of our businesses, the health and wellbeing of Scotland’s business owners, and for the future of the Scottish economy, we need you to reverse this calamitous decision on nondomestic rates relief right now.

?We await to hear from you.

?

A transcript below of the Open letter sent to Humza Yousef today:

Open letter to the First Minister Scotland

4 September 2023

Dear First Minister,

On behalf of retail, leisure, and hospitality businesses in Scotland we implore you to reconsider the decision taken late last year by the Scottish Government not to pass on any nondomestic rates relief to retail, leisure, and hospitality businesses in Scotland this year.

As you will be aware, businesses in England and Wales are receiving 75% business rates relief this year. The decision by the Scottish Government not to match this rates relief means that Scottish businesses like ours are being faced with nondomestic rates bills this year which are four times as much and up to ￡110,000 more than equivalent businesses in England and Wales.

As is becoming increasingly evident, most Scottish businesses cannot afford these higher rates bills as they battle the aftereffects of the Covid pandemic, massive energy costs, rapidly increasing interest costs on loans, labour shortages and fragile consumer confidence. Already this year the Scottish Hospitality Group report there have been 174 hospitality and leisure insolvencies in Scotland. It is a very similar picture in retail with Scottish institutions such as Wilkies announcing stores closures in recent weeks as well as UK chains Wilkos, and Clinton Cards. Overall, Scottish business insolvencies have increased by 20% in 2023 versus 2022 and 22% versus 2019 pre- pandemic insolvencies.

The 75% business rates relief granted in England and Wales is capped so that it is not a significant benefit for the large national chains. It was designed to help the smaller independent businesses, and emerging scale ups, often family owned, to survive these testing trading conditions. These smaller, typically multi-site businesses do not benefit from the small business bonus scheme and contribute hundreds of millions of pounds in tax revenue from VAT, rates, and national insurance. They also employ hundreds of thousands of people and their shops, restaurants, hotels, etc, are woven into the fabric of local communities in Scotland.

Many more businesses in Scotland are at imminent risk of closure. Business owners are frayed to breaking point by the stress of trying to make ends meet each month to be able to pay their staff, suppliers, and taxes. Some businesses will fall into insolvency, other business owners will just walk away to preserve their mental health and protect whatever dwindling personal assets they may retain. When one of these businesses fail, it is not just a statistic, it is a crushing personal event for the owners, often costing them their family home and more.

The Scottish Government has committed to building a better relationship with Scottish businesses.

The message has been sent by Scottish Ministers that Scotland’s budget cannot afford to provide the same nondomestic rates relief as England and Wales. We put it to you that Scotland cannot afford not to provide the same business rates relief, to ensure that the businesses which drive the Scottish economy are able to survive. It is time for Scottish

Government action on business rates relief to demonstrate that the commitment to building better relationships with businesses is real. As a group of independent business owners, we are very willing to engage with you as First Minister and the Scottish Government, and in particular seek representation on the New Deal for Business Non-Domestic Rates Subgroup so that our voices can be heard regarding much needed reforms to this tax.

Our ask for now is that you please act quickly to match in Scotland the business rates relief available to businesses in England and Wales for the 2023/24 year. The future of many of Scotland’s businesses is at stake.

Yours sincerely

Scottish Businesses

Scotland’s Retail, Leisure, and Hospitality businesses, Associations and service providers including:

Becky Lumsden – Owner: PURE Spa & Beauty

Toby Dicker - Leader: Salon Owners Association

Lesley Blair MBE - Chief Executive: BABTAC & CIBTAC Ltd

Mike Tibbert – President: Scottish Passenger Agents Association

Clare Winskill – Non-Executive Director: Scottish Tourism Alliance

- Owner: Coruisk House

Michael Apter – Owner: Paper Tiger

Anna Lagerqvist Christopherson – Owner: Green Room Wine Bar

Joanne Dooey – Owner: Love to Travel LTD

James Wilson – Owner: Tribe Yoga, Tribe Cycle & Society Bar & Kitchen

Nicole Sara Bernard - Founder & Director: The Wax Bar

Josh Miller - Joint Managing Director: Charlie Miller

William Smillie – Owner: BE Uniforms

Colin McAndrew - Managing Director: Medusa Hairdressing

Anna White – Owner: Browne White LTD trading as ScotlandShop

Donald Begg – Owner: Begg Shoes

Adam Marshall – Director: Reiver Country Farm Foods LTD

Karen Forret – Owner and Managing Director: Wilkies

Garry Pearson – Owner: Pearson of Duns

Linda Hill Miller – Owner: LAH Travel

Nic Oldham – Head of Customer and Commercial: Crieff Hydro Family of Hotels

Jo de Sylva – Chair: Visit Inverness Loch Ness

- Director: MacGregors Hospitality

Duncan McConchie – Managing Director: Laggan, Gatehouse of Fleet

Peter McKenna – Chef / Owner: The Gannet Restaurant

Jerry Alexander – Investor: The Court House Restaurant

Wendy Pring – Founder: The Way Forward 2045

Mary Reid - Owner: Salon Whyte LTD

Frank Ross - Owner: Silverfjord Hotel Kingussie

Eddie Tweedie – Owner / Consultant: Coolin Sky LTD

Stay in Skye Holidays

First Choice Finance Scotland LTD

Manorcroft Properties LTD

Anna Low – Co Owner and Director: Foyers Lodge

Angelina Fairgrieve – General Manager: The Travel Company Edinburgh

Kirsty MacCormick – Owner: The Nail Yard

Nick Mactaggart – Managing Director: Greendale Car Sales

Royce Clark – Managing Director: Collier and Clark Group

Lesley Landels – Founder: Love Scottish

Neil Sullivan – CEO: Boxfish Ethical Utility Management

Mark Wallace – Managing Director: Dryburgh Abbey Hotel Ltd

Siobhan Edwards – Director: Lisini Pub Co Ltd

Yosof Ewing – Head Coach: The Contract Coach

Bayile Adeoti – Managing Director: Dechomai Ltd

Stephen Johnstone – Owner and Managing Director: Robert Graham LTD

Greg Dalgleish – Co Owner: Think Fitness for 4 Less

Gillian Crawford – Founder: Lily Blanch & Tartan Twist

Jenny Goudie – Owner: Cardhu Gifts & Interiors Troon

Belinda Belli – Owner: Compass Estates

Caroline Donaldson – Director: Kynesis Coaching

Roz Colthart – Owner: Salon Studios

Stuart Fraser – Director: Oak Tree Inn Loch Lomond

St Mocha Coffee Shops

Loch Lomond Coffee Co