Business rates / Barclay Review
Food Standards Scotland policies
Deposit Return Scheme (DRS) on drinks containers
Brexit-related issues including labour market
Digital / Collaborative Economy
National Living Wage / Low Pay Commission
Campaign to Cut Tourism VAT
Certain issues have been gaining more traction in Scotland than in other areas of the UK due to devolved powers, one such being the debate about tourist taxes.
In addition to proposals for a hotel guest / bed tax in a number of locations, suggestions have emerged for a visitor levy to be applied at the Skye Bridge to meet infrastructure costs and address congestion issues, and for a disembarkation levy on cruise passengers at various ports to meet the cost of pressures on cultural assets.
Notably, a tourist tax proposal was not included, as was thought possible, in the City Deal announced for Edinburgh and the surrounding local authority areas.
Any form of additional tax on tourists will require specific enabling legislation and the official Scottish Government position remains that ‘it has no plans to introduce a tourist tax’. The BHA is continuing its work on this issue and is preparing a programme to oppose the introduction of any form of tourist tax.
Following the publication of the Barclay Review report, BHA, the Scottish Licensed Trade Association (SLTA) and Scottish Tourism Alliance (STA) met with Finance Secretary, Derek Mackay MSP to discuss Barclay’s recommendations as they affect the sector. Shortly after Derek Mackay announced his decision to extend the current 12.5% business rates cap for hospitality and licensed trade businesses for the 2018/19 period. Mr Mackay also encouraged the Scottish Assessors Association (SAA) to work with the BHA and other industry interests to explore alternative methods for valuation of hospitality and licensed businesses.
Looking ahead, principal among the requirements of the hospitality industry are continuation of the cap on rates increases beyond 2018/2019 and a fundamental review of the system for valuing hospitality and licensed premises.
Earlier this year, Food Standards Scotland (FSS) published proposals to address Scotland’s poor diet. These included reductions in promotion, advertising and portion size of certain foods and drinks, reformulation of foods and the prospect of tax and regulation.
While the industry has a role in assisting to address issues related to diet, nutrition and obesity the proposals raise significant issues for the out-of-home sector. Scottish Government will shortly be consulting on a Food Bill. The industry is already acting on this issue with the recent publication of BHA’s ‘Nutrition Guide for Catering Managers and Chefs’, and we encourage businesses to consider what actions might be appropriate in relation to offering well-prepared, nutritious food putting healthy choices on menus and offering smaller portions if requested. The BHA is engaging with other trade bodies and with FSS and Scottish Government to examine what role might reasonably be expected of hospitality businesses in addressing diet and obesity issues.
There is concern about the future availability of adequate numbers and quality of Modern Apprenticeships in hospitality and, indeed, about the manner in which the Apprenticeship Levy is being applied in Scotland. The BHA is to consult levy-paying members in Scotland to gain greater insight and, on the basis of this will seek greater transparency from Scottish Government on how the levy is being used – for example in the quality of, and attracting the right people onto, apprenticeships. There is concern that the funds allocated to Scotland are being directed towards specific Scottish Government programmes rather than towards specific business needs and priorities.
Scottish Government has announced in its Programme for Government that it intends to introduce a DRS in Scotland. This is likely to involve the establishment of a complicated system, requiring new collection / recycling infrastructure and arrangements financially to compensate different parties to the complex transactions involving drinks producers, wholesalers, distributors, retailers, including (it is understood) hospitality businesses and consumers. There remains a lack of clarity over whether and how this will impact on hospitality and leisure businesses. The BHA will be monitoring the position and will continue to liaise with the Packaging Recycling Group Scotland (PRGS) which is taking a cross-business lead on the subject.
BHA continues to represent the interests of the hospitality sector in various Brexit-related forums, notably the Scottish Government’s Culture and Tourism Brexit Reference Group.
The KPMG report commissioned by the BHA estimated that the industry would annually need to recruit around 5,000-6,000 staff in Scotland to support business growth in addition to ongoing annual recruitment of 20,000 to replace churn. The BHA is preparing a targeted 10-year strategy aimed at recruiting a substantial portion of future labour requirements from within the UK labour market.
The BHA is also submitting evidence to the independent Migration Advisory Committee (MAC) for their report which examines the UK labour market, the role of migration in the economy and how the UK immigration system should be aligned with a modern industrial society.
VisitBritain has been coordinating the Sector Deal for the Visitor Economy. BHA in Scotland attended a VisitBritain-hosted roundtable in Edinburgh in July and contributed views intended to ensure that devolved matters and industry priorities in Scotland are not overlooked by VisitBritain in preparing the bid. The deal was submitted to Government on the 6th October. We now await response as to whether the bid will be accepted.
There are growing concerns in the UK (which mirror concerns internationally) that home sharing accommodation (such as AirBnb) affects the residential housing supply, alter the character of neighbourhoods and instigate anti-social behaviour as well as engender unfair competition for traditional accommodation providers.
The BHA believes that Scotland has the opportunity to learn from elsewhere and address issues before they become unmanageable. With the support of Jane Seymour, BHA’s digital expert, BHA submitted written evidence to the Scottish Government appointed Advisory Panel on the Collaborative Economy which is due to report to Scottish Government by the end of this year. The BHA responses were specifically related to the Panel’s consideration of Short-term Rentals and Peer-to-Peer Accommodation.
In June, BHA Scotland facilitated a sector-specific meeting with Low Pay Commission (LPC) Commissioners and staff in Glasgow. Also in June, BHA Scotland participated in a more expansive session with LPC during the BHA Summit.
BHA, jointly with other UK-wide trade bodies ALMR and BBPA, submitted annual evidence concerning future rates of National Minimum Wage and National Living Wage to the LPC. Key points in the BHA submission concern independent setting of NLW rates by LPC and urging Government action to alleviate effects of NLW by extending relief on employers’ NIC for under-21s to all employees under 25. The BHA will keep members updated as this progresses.
A report was prepared last year by specialists leading on the Cut Tourism Vat (CTV) Campaign, to illustrate the benefits which would arise in Scotland should tourism VAT be reduced at UK level. The key results from the analysis, which has been shared with Scottish Government ministers and selected MPs / MSPs are:
- A net gain to the Scottish economy of £113m (NPV) after 5 years, rising to £489m (NPV) after 10 years;
- The annual benefit to Scotland's balance of payments is £187m in year 5 rising to £288m in year 10 with the cumulative balance of payments benefit totalling £679m by year 5 rising to £1.9bn by year 10;
- The creation of 13,000 additional jobs.