Scotland’s hospitality industry is in dire straits due to unaffordable business rates and a lack of government engagement, business leaders have warned.

Sir Tom Hunter and Lord Willie Haughey spoke out as the Scottish Licensed Trade Association revealed three out of four Scottish hospitality operators say they will need government support to survive this year.

The survey by the Association also revealed 96% of 500 respondents believe the Scottish Government is out of touch with the business community.

Sir Tom told listeners to his Go Radio Business Show: “The Association represents pubs and restaurants and hospitality businesses across Scotland and it went out to its members to ask: ‘What do you think of the backing of the Government?’

“Well, 96 per cent ­– an unprecedented number ­– of those responding said they felt it was out of touch and simply didn’t understand the Association and what they were trying to do.

“Coupled with this is the fact that Circularity Scotland, the company responsible for the operation of the deposit return scheme for single use drinks containers and set up by Lorna Slater, the Scottish Green MSP with absolutely no business experience, has now folded owing more than £70 million.

“Taxpayers’ money has been squandered here.”

Lord Haughey shared his sense of shock, adding: “Think of how many police officers and nurses that cash could have paid for. The policies related to the hospitality industry that are being introduced are absolutely bonkers.

“It’s a disgrace and it should not be forgotten by the people of Scotland.”

Sir Tom said he believed Government Ministers were intent on making policy without bringing along the people that would be most affected by the legislation. His broadside comes in the wake of a unified statement by Scottish tourism and hospitality bodies last month in response to the Scottish Government budget, which branded it “extremely disappointing”.

He went on to point out that rising business rates were also adversely affecting businesses in the sector. The Fraser of Allander Institute recently concluded around 100,000 hospitality businesses would stand to benefit if the Scottish Government heeded calls from UKHospitality Scotland and introduced a business rates relief scheme that replicated support in England.

“When we look at the rates put on hospitality businesses, if a company such as Ayrshire-based Buzzworks, which now employs more than 800 people, was based in England, it would be getting a 75% discount,” he said.

“If we just think about this for a second: when a restaurant or a hospitality venue opens, let’s say it employs 30 people full and part time. That’s 30 jobs that have been created. Those people pay their taxes. Those people spend their money in the local economy. However, if the business rates are too high, that company and many others simply won’t set up here.”

Lord Haughey agreed with his radio show co-host and added: “I’ve been heavily involved with the Scottish licensing trade for years, having my own places.

“A really good friend of mine, Paul Waterson, has been the spokesman for this industry for many years. In fact, he spent 16 years as Chief Executive of the Scottish Licensed Trade Association.

“He is literally pulling his hair out. He knows it is absolutely dire for this whole sector. 

“We have to do whatever we can to try to help because I believe there are going to be hundreds, if not thousands, of businesses in Scotland, putting the shutters up, if we don't do something to assist this sector.”

Sir Tom concluded by calling on the Scottish Government to follow England and the rest of the UK in cutting rates for hospitality venues.

“That would do two things,” he said. “One, it would show these hard-working business folk that the Scottish Government is listening. And, two, it would be a huge boost to our nation’s overall finances.”