Urgent measures are essential to prevent the widespread closure of pubs in Scotland, according to warnings directed at SNP ministers following a new financial relief initiative introduced in England.
Pub industry leaders are sounding the alarm about potential massive job losses across local communities, emphasizing the need for immediate action to reduce their business rates.
This concern arises after the Treasury declared a 15 percent reduction in business rates for English pubs in 2026/27, accompanied by a two-year real-terms freeze.
This initiative is projected to cost £300 million over the next three years, resulting in increased funding for the Scottish Government via the Barnett Formula.
However, it remains the responsibility of SNP ministers to decide if similar rate reductions will be implemented in Scotland. They have previously faced criticism for not extending comparable support packages.
Paul Togneri, a senior adviser with the Scottish Beer and Pub Association, stated that the relief measures outlined in the Scottish Government’s recent draft Budget ‘fall significantly short’ of what is needed.
He said: ‘Without further action, many pubs will struggle to keep their doors open, and we risk losing jobs in communities across the country.
‘Even before the UK Chancellor’s announcement today, Scottish pubs were already facing significantly higher business rates bills due to the new lower poundage rate in England.
Scottish pubs want the same 15 per cent business rates reduction that pubs in England will get
‘The additional support announced today will now widen that gap further, making it even harder to attract investment into Scotland’s pub and brewing sector.
‘The Scottish Government will receive additional funding as a result of this change. It is vital that Shona Robison honours her commitment to pass this on – and goes further – to protect pubs, safeguard jobs, and support an industry that is central to Scotland’s social and economic fabric.’
Analysis by UKHospitality Scotland found that the average pub in Scotland will see its business rates bill soar by 77 per cent, or £11,509, from April as a result of the combined impact of a revaluation and the end of the current 40 per cent relief scheme.
It found that they will see these charges soar by £36,523 over the next three years – leaving many facing the threat of closure.
Leon Thompson, executive director of UKHospitality Scotland, said: ‘Now we have seen the details of the business rates support package in England, I urge the Scottish Government to move swiftly to make good on its promise at the Scottish Budget to use these funds to support hospitality.
‘Like in England, Scottish hospitality businesses are facing steep hikes to business rates. Hotels are facing average increases of £68,000 over three years. Pubs are set for an average £36,000 increase. This is a hospitality-wide problem that needs a hospitality-wide solution.
‘The Scottish Government should rapidly outline its plans to bring forward a support package for the entire sector, to support business viability, jobs and the communities that rely on these businesses.
‘I stand ready to work collaboratively with the Scottish Government on a package that best supports the hospitality sector.’
The Treasury said its relief package will save the average pub in England £1,650 in 2026/27. Around 75 per cent of bars will see their bills fall or stay flat over the same year with the pub sector as a whole paying eight per cent less in business rates in 2029 than they do currently.
It also confirmed that, as business rates are devolved to Holyrood, it will result in additional funding for the Scottish Government through the Barnett Formula, and it will be up to SNP ministers to decide whether to match the funding.
Stephen Montgomery, spokesman for the Scottish Hospitality Group, said: ‘We hope MSPs from across the political spectrum will recognise the inadequacy of the current Budget and act now to support the licensed hospitality sector.’
Following the Treasury announcement, Finance Secretary Shona Robison has written to UK ministers to clarify how much additional funding will be available, and pledged she would pass on extra funds to pubs.
She said: ‘I have written to the Chancellor seeking urgent detail on the UK Government’s plans and whether consequential funding will be provided to Scotland.
‘Whilst we believe we have offered a strong business rates package overall, including an independent review of hospitality valuation methodology which will commence shortly, I am committed to passing on any consequentials in further support to business.’
At Holyrood yesterday (TUE), Public Finance Minister Ivan McKee claimed that hospitality business rates bills ‘will rise by significantly less than has been claimed’ if all reliefs are taken into account and overall income from non-domestic rates will be lower.
Scottish Conservative business spokesman Murdo Fraser said: ‘The SNP must urgently pause the rates revaluation because the eye-watering rises it’s creating will undoubtedly result in businesses going to the wall and jobs being lost.
‘Hospitality firms are already toiling with high costs and flat demand, yet Ivan McKee arrogantly dismissed the industry’s figures on the rates rise and turned a deaf ear to their calls for action. Firms in the hospitality sector operate on tiny margins and it’s unreasonable for their assessments to be based on turnover.
‘The Labour government has announced a partial U-turn on the costs being imposed on pubs south of the Border. Previously the SNP government failed to pass on support. That can’t happen this time or the consequences will be catastrophic for Scottish businesses.’
Louise Maclean has spent three decades working in the hospitality sector but with profit margins now so low she says it often feels more like a ‘time-consuming hobby’.
Her company pays out £1.6million a year in rates and she estimates she needs to make ‘at least seven times’ the amount to cover the cost.
The business development manager for Signature Pubs, which has 23 venues across Scotland, says a combination of rising costs, increased rates, a hike in energy bills, and a lack of government support has left her business and many others feeling as if they were left ‘on our own’.
Ms Maclean admits that the industry has been incredibly resilient over the last three years.
Louise Maclean says a combination of rising costs, increased rates, a hike in energy bills, and a lack of government support has left many firms feeling as if they were left ‘on our own’
But she said: ‘We can’t pass all of them [costs] on to the customer. I don’t think we would have any customers left if we did.’
She fears that governments see the sector as the ‘golden goose that will always be around’ and warned: ‘It won’t be unless we get support.
‘We have warned the government for years that they are going to see businesses collapse.’
Ms Maclean said with profits as little as four per cent of sales, it often feels more like a ‘very time-consuming hobby’.
And with an annual rates bill of £1.6million, she stressed: ‘We’d probably have to make seven times that just to cover that cost.’
Following Rachel Reeve’s announcement however, she is hopeful the Scottish Government will follow suit and ease the burden on the sector.
But she said: ‘It will be interesting to see what their definition of a pub is. The devil will be in the details.’
