AN immigration system that works for Scotland’s hospitality sector and tackling the tax burden on the industry must be top priorities for the incoming UK government following next month’s general election.
Trade groups representing pubs, restaurants and hotels across Scotland say the protracted period of uncertainty since the Brexit referendum in June 2016 and subsequent postponement of the UK’s EU departure date has had a significant impact on the recruitment and retention of EU workers; the Scottish Tourism Alliance (STA) said the sector has lost more than 3000 EU workers in the last 12 months.
Trade bodies are calling on MPs elected on December 12 to press for an immigration regime that meets the needs of the hospitality sector.
Marc Crothall, chief executive of the STA, said immigration is “undoubtedly the biggest policy on which the future of our industry rests”.
“Reducing the availability of workers for the tourism sector and potentially cutting off a flow of people who want to work in the industry poses a significant risk and challenge for our industry at a time when businesses are struggling to become or remain profitable, to the extent that they simply won’t be in a position to attract and retain the type of talent that our industry needs,” he said.
Colin Wilkinson, managing director of the Scottish Licensed Trade Association (SLTA), agreed, saying recent figures show EU workers account for 50% of the workforce at half of businesses in the sector.
“The problem is not just recruiting EU workers, but retaining current EU staff,” he said.
“This has led to a large majority of hospitality businesses fearing that should this trend continue, and the introduction of a new UK-wide immigration system which does not reflect the needs of the tourism and hospitality sector in Scotland, this would impact negatively on their ability to remain competitive, expand or even continue to operate.”
Willie Macleod, executive director for Scotland at UK Hospitality, said uncertainty around future immigration policy is a major concern for hospitality businesses.
“We’re certainly very supportive of the Scottish Government argument that Scotland needs to be treated differently in terms of immigration,” he said.
“We also want a review and relaxation of the tax burden on the industry. We’re arguing for a reduction in excise duty; we’re renewing pressure for a reduction in VAT on hospitality services; although it currently applies to Scotland, we’re continuing to argue that there’s no case for a tourist tax – to impose one would be disastrous for our industry; and, although it is devolved to the Scottish Government, we are continuing to press for reform of business rates.”
Paul Togneri, senior policy manager at the Scottish Beer & Pub Association (SBPA), also called for the incoming UK government to address the “unfair tax burden” on the industry.
The key to this, he said, “is a reduction in beer duty”.
“Measures taken to recognise the growing cost burden on pubs, flexibility on the promotion of lower strength beer, and a commitment to not add further burdensome regulation on the beer and pub sector, are also needed,” said Togneri.
Kate Nicholls, chief executive, UK Hospitality: “Hospitality can provide even more jobs and chances to grow in fantastic, rewarding careers in an industry that provides opportunities at every skill level regardless of background, qualifications or skill level.
“We have a chance to do so if the future government listens to what we need and acts positively to support a sector that makes a difference everywhere it flourishes.”
Paul Togneri, senior policy manager, Scottish Beer & Pub Association: “We hope all of Scotland’s MPs, new and old, will push the next government on these issues and help protect a vital Scottish industry which supports over 67,000 jobs. Similarly, the government at Holyrood can aid the industry by adding their support to our calls and taking their own action where they can.”
Marc Crothall, chief executive, Scottish Tourism Alliance: “Cutting VAT to 5% to boost visitor numbers to the UK and make our country more competitive as a tourist destination is high on the list of our asks to the future UK government, particularly in light of the fact that in the coming months and years, local authorities in Scotland will have the legislative power to introduce a tourist tax; another tax and cost to the visitor who is already paying considerably more than other destinations just to visit, stay and experience what we have to offer.”
Colin Wilkinson, managing director, Scottish Licensed Trade Association: “Scotland and the UK hospitality sector is completely disadvantaged by the current VAT level for tourist accommodation. Overnight accommodation in the UK already attracts 20% VAT, one of the highest in Europe, and while the UK is ranked in the top five of countries in terms of tourism capability and readiness, in terms of price-competitiveness in 2019 the UK is now ranked 140th out of 140 by the World Economic Forum.
“If Scotland and the rest of the UK is to compete on the global stage we need to have a level playing field when it comes to tourist taxation.”