HOPES held by the hospitality industry for a cut in business rates at the Scottish Budget this month looked to have been dealt a major blow.

Lorna Slater, Scottish Greens MSP for Lothian (Region) and minister for green skills, circular economy, and biodiversity, has declared that her party “cannot support a new relief from non-domestic rates for businesses in the hospitality sector”.

The Scottish Greens are the junior partners in a power-sharing agreement with the SNP at Holyrood, meaning that the SNP relies on its support to pass key legislation such as the Scottish Budget.

Groups representing the hospitality industry and other sectors have been urging the Scottish Government to provide more relief from business rates at the Scottish Budget next month, as businesses continue to feel the pressure from a surge in overheads and the cost-of-living crisis over the last two years.

Those calls have ramped up since Chancellor of the Exchequer, Jeremy Hunt, announced a one-year extension to the 75% relief from business rates that firms in the retail, hospitality, and leisure sectors in England and Wales benefit from at the Autumn Statement last week.

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However, hopes for a similar cut in Scotland look to have been dealt a significant blow. In correspondence sent by Ms Slater to one of her constituents, seen by The Herald, the minister acknowledges the “serious impacts of the pandemic, Brexit, and the cost of living crisis on the sector, and the consequences of these on staff and their families”.

“However, the Scottish Greens cannot support a new relief from non-domestic rates for businesses in the hospitality sector,” she adds. “There is already a broad spectrum of reliefs from NDR on offer, ranging from the small business bonus scheme to hardship relief, business growth accelerator relief, and rural rate relief.

“All of this carries a significant cost to the Scottish Government and therefore to taxpayers. The small business bonus scheme in particular has no equivalent elsewhere in the UK and a large number of hospitality businesses will already benefit from it. SBBS costs the Scottish Government around £300 million a year.”

Ms Slater went on: “Introducing a new form of relief would compel us to either raise the rate of NDR on all other businesses, raise more tax revenue by other means i.e. raising income and/ or council tax, cut existing reliefs, or make very substantial cuts to public services like schools and hospitals.”

Ms Slater states in the letter that the Scottish Government is "largely unable to address the root causes of the challenges facing Scottish businesses", noting that the powers to deal with issues such as inflation, workforce shortages, and "skyrocketing" energy prices are reserved to the UK Government and Parliament.

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But her stance cut no ice with Stephen Montgomery, spokesman and director of the Scottish Hospitality Group, who said the position taken by Ms Slater on business rates was “very disappointing”. He said: “We have had cross-party support for our campaign, where we are asking MSPs to back us in our call for a 75% business rates relief in the Scottish Budget on 19th December. It is therefore very disappointing to see the stance which we have from the Scottish Greens, where they have made clear in their replies that they do not support that ask. This is about the local jobs in hospitality venues, of the constituency that these MSPs have been elected to serve.

“Today is Small Business Saturday, and we would ask the Scottish Greens to rethink their stance on this, because without their help, hospitality businesses in their constituency may well not make it through another year.

“Our asks of Scottish Government are very clear. Pass on the full 75% rates discount which is so desperately needed this year for the hospitality sector, and sit down with us to look at proper reform ahead of the next Budget, giving hospitality its own rates category. This to allow the sector to protect jobs, support local producers, and allow hospitality to thrive.”

In the letter, Ms Slater did hold out the prospect of a review of the small business bonus scheme, declaring that the Scottish Greens did not consider it to be “particularly well targeted”. She added that the party would “welcome any thoughts from businesses as to how it could be better targeted to maximise relief to those small businesses who really need it”.

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She said: “We are also keen to ensure that other measures to support the sector are seriously considered. For example, we know that employee retention and staff morale can be improved and better supported by ensuring they are safe, both at work and as they travel to and from work. We are actively working on a range of initiatives to achieve this.

“We are also working to ensure that regional economic partnerships take seriously the contributions made to local economies by the hospitality sector in their strategic planning.”

A Scottish Government spokesperson said: “We are acutely aware of the enormous pressures facing businesses across the country, and are taking decisive steps to offer support. The Scottish Budget 2023-24 ensured the lowest poundage in the UK for the fifth year in a row and supports a package of reliefs worth an estimated £749 million, including the small business bonus scheme which is estimated to take over 100,000 properties out of rates altogether.

“We further estimate around half of the properties in the retail, hospitality, and leisure sectors to be eligible for 100% SBBS relief in 2023-24.

“Decisions on non-domestic rates for 2024-25 will be made as part of this month’s Budget.”