Meeting of the Parliament 04 February 2026
Today pubs, hotels and restaurants across Scotland face a crisis situation due to rising costs and flat customer demand. The latest blow comes in the form of the 2026 revaluation, which hands down crippling increases in bills that are simply unaffordable. Today, the Scottish Conservatives are calling for real, positive and immediate action from this Scottish Government to prevent the meltdown of a sector that is so important to the Scottish economy.
The background to this is the difficult trading position that has hurt hospitality over a number of years; the rising cost of wages, which is not helped by Labour's tax on jobs in the form of increases to employer national insurance contributions; rising energy costs; and the burden of non-domestic rates. All of that while customer demand is hit by cost of living pressures, meaning that prices cannot be increased to accommodate rising cost pressures.
On top of that, we now have the catastrophe that is the latest non-domestic rates revaluation. According to figures from the trade group UKHospitality Scotland, the current revaluation will see the average pub in Scotland face a rates bill increase of £36,523 over the next three years, while the average increase for hotels is even greater, at £68,007.
If those increases go ahead, it will mean the end of many small pubs and hotels across the country. This is a potentially catastrophic situation for a vital sector. Already, pubs in Scotland are suffering a closure rate more than 50 per cent higher than their equivalents south of the border, with one pub a week forced to close throughout 2025. It is only going to get worse.
This is an economic issue, because of the employment that is provided, but it is also more than that—because as well as playing a vital part in the tourist economy, pubs and hotels also act as a social hub for communities, particularly in rural areas. Over the years, too many rural communities have seen the local school close, followed by the newsagent and the grocer’s shop. Now, the local church might be about to close its doors. That leaves the pub or the hotel as the last place where the community can gather, and even that is now under threat.
Last week, the United Kingdom chancellor, Rachel Reeves, announced a £100 million-a-year package of support for pubs south of the border, including a 15 per cent cut in rates. That will generate Barnett consequentials for the Scottish Government—we still await hearing from the Scottish Government exactly how that additional money will be spent—but that will not go far enough. In line with our colleagues in England, we want to see 100 per cent rates relief for hospitality businesses with a rateable value below £100,000, which would cover the vast majority of small and medium-sized enterprises.
More urgently, there needs to be action on the current revaluation, which will deliver staggering increases in rateable value from April. It is clear that the current methodology that is applied to assessing rateable values for hospitality is simply no longer fit for purpose, based, as it is, on projected turnover figures and taking no account of profitability.