The Scottish hospitality sector has voiced its concerns about measures announced in the Budget.
Responding to the Chancellor’s UK Autumn Budget Statement (Wednesday 30 October), the Chief Executive of The Scottish Tourism Alliance, Marc Crothall MBE, commented:
“The business community understands the fiscal constraints on both the UK and Scottish Governments, but the Budget measures announced do little to dig us out of the financial hole we’ve fallen into in recent years. In fact, for many businesses it could bury them.
“We’re relieved that the small businesses that make up our sector will be protected from the rise in National Insurance contributions due to the employment allowance, but for the remaining tourism and hospitality businesses there will be serious implications.
“Once again, this additional labour cost will strike the bottom line of the many businesses in our sector that are struggling to make a profit to grow and invest in their people and quality of their product offer.
“Unfortunately, this announcement will now likely lead to business owners having to freeze any further pay rewards and pause new recruitment.
“Redundancies cannot be ruled out because some operators quite simply will not be able to afford the additional rise in employee costs. This will result in them having to reduce their trading hours or customer offer, impacting on availability and overall appeal.”
In addition to the rise in the Employer National Insurance rates from April 2025, hospitality businesses are also wrestling with…
- An expected 6.7 per cent increase in the National Living Wage to £12.21 per hour.
- A 16.3 per cent increase in the National Minimum Wage for 18–20-year-olds to £10.00 per hour.
- New employment legislation, which will pile further pressure on a sector which is already struggling with acute labour shortages.
The Budget did include an undertaking to reform business rates for high street retail, hospitality and leisure properties (RHL) from 2026/27, but this applies only to England so we will have to wait to see how the Scottish government responds in the next Scottish Budget.
