 Good morning, and welcome to the third meeting of 2024 of the Economy and Fair Work Committee. Our first item of business is the decision to take item 3 in private, and our members are content to do so. We previously gave a take item 4 in private. Our next item of business is an evidence session with the Scottish Tourism and Hospitality bodies following publication of the Scottish Government's draft budget in December 23. I welcome Mark Russell, chief executive of the Scottish Tourism Alliance, and Leah William Thomson, executive director of UK hospitality, and Colin Wilkinson, managing director of Scottish licensed trade association. I thank you all for attending this morning and for the briefings that we received in advance. I know that you have got some of the budget, but you can point to positive reports of the sector. We have seen a growth in the economic value of the sector. You recognise that there is an increase in visitor numbers, particularly in international visitors. With that, we are seeing an increase in the economic contribution of the sector. You can point to positive growth and recovery that we can see in the sector. Why is there so much concern about the budget and why is there a need for the calls for government support so strong? There will be a chance to cover all the areas that you have raised this morning, so please do not feel the need to explain everything in the first answer, but if you may give us, Liam, if you want to go first. Since we have a contradiction between the sector, you can point to figures that the sector is doing well and that there is buoyancy there, but why is there such a need for government support? The sector is on track to recover from the pandemic. There is no doubt about that. The issue that we have is that, although venues may be busy, the costs have just gone through the roof, so whilst turnover is high, there is little profit for those businesses that are making any kind of profit at all. Other businesses are simply at a standstill situation and others are making a loss. We have seen inflation increase. We have interest rates rising. Food and drink costs for our businesses when they are buying in product is up around about 20 per cent. We have been hit with wage increases as well, which is all good because businesses want to pay their workforce more money, but those increases are being driven because of disruption in the labour market, particularly around shortages and particular shortages in skilled roles, particularly chefs. Energy bills have been exorbitant and remain incredibly high for businesses. There is a lot of focus on household energy costs, which are high, but at least there is a cap in place there. There is no cap in place for businesses, so a lot of our members are paying 40, 50, 60 per cent more on their energy bills than previously. Really, there does not seem to be any end in sight to that. Everything is up in terms of the costs, so even venues that are busy are struggling to make ends meet. The other side of that is that we are starting to see consumer confidence, which is already quite fragile. We have seen that continue to soften even further. Members are reporting that when people are out in bars and restaurants, they are not spending quite as much as they were before. People are not staying out for the same length of time going home earlier. It is a very tough environment for businesses at the moment. We are working with a research partner. We are looking at a loss of about 350 hospitality businesses in Scotland in the first three quarters of last year. As members will be aware, there is a lot of media coverage around businesses that post Christmas trading are now sadly closing. There are other businesses that are looking at reducing their hours and laying off staff in order to try to make the balance sheet work for them. Colin, if I come to you and your members, because other businesses are feeling these pressures, it is not just tourism and hospitality. Everybody is increasing energy costs and others. What is unique to the sector that is leading to a fragile picture that Leon has described? Is there a unique factor that is making the environment tougher for hospitality? As Leon has said, one of the biggest disappointments about the budget was that, in our view, the importance of the sector was not recognised by the Scottish Government in comparison to what Westminster sees as an important sector in England. The rates relief would have made a huge difference to many of our members who are small independent operators. It was a bit of a problem, but that did not happen. We are seeing business confidence for our members, dropping about 67 per cent, which is not optimistic for the future. We are currently carrying out one of our six-monthly surveys and we have seen 190 premises, pubs and bars, close since Covid, and they are permanently closed. From the results that we have seen so far in this survey, we could see another 130 closing in Scotland in 2024. Various things are being hit by legislation that is coming in as well. Businesses really need a break to try and recover from the current situation that they find themselves in. Into town centres last year, was it maybe the year before now? One of the solutions that we could see for town centres was needing a mixed economy. Tourism and hospitality were a key player, and that cannot just all be about retail, it needs to be a changed economy. The picture that you have described makes that harder to achieve. At that time, you are looking at how we can change the use of our property so that a hospitality business can move into that. However, now that we have seen those closing, they are in the empty spaces as much as retail is. We have had the sack of lead that the hospitality industry and the licensed hospitality industry could be the saviour of the high streets. We are seeing what is happening when it comes to retail, but there is no incentive to open businesses up. We are seeing so much legislation coming through. We feel that we are not being supported enough by Government. We have also got the issue of, in one thing, the low-emissions zones. We have seen what has happened in Glasgow to the night-time economy. We have got other cities that will be introducing these in the summer. That puts a further burden on a business that is wanting to open and operate in the city centres. I am going to bring Mark in in a sec, but I have some supplementaries to Colin. Brian, do you want to come in? I was actually on that particular point there. It strikes me that the way that it is not so much the LAZ. It is the way in which the LAZ was introduced. What I am hearing is that the night-time economy is not just from clientele inability to get in and out of the city, because the public transport is not available at that time of night and taxis are not available anymore. The workers themselves are struggling to get in and out of the city. I just want to confirmation that that is the case, that workers cannot get in and out of work at that time of night. Of course, we want to make sure that they can get home safely. If they do not have a facility of public transport or the ability to get into the city centre very easily, that has an impact on our staff's security in getting home. Colin, I just wanted to ask you how much of the reduction in usage of pubs is down to societal change, i.e. there is a lot more home consumption. You have also got a situation where cost 11 rises are coming in, so folk are going out less. You have got preloading because youngsters are not drinking as much, but when they do drink, they tend to be drinking at home before they go to the clubs and pubs at night. How much of the change that you are talking about is relating to societal change? There has been a great deal in societal change from Covid. We have all become very insular, but pubs are very adaptable if they have got the help to do that. We have gone through many crises in my 40 years in the industry, and we have managed to get through it. I can honestly say that our members feel that the current situation is worse than Covid, at least with Covid. We had some kind of support, we had the furlough, we had rates relief, etc. We are getting nothing now, and that is really hitting hard on a lot of businesses. Can I just come back to you very quickly and say that in the Scottish Licensed Trade News in January, you had an article that touched on a number of people within the industry. In the Edwinton Groups, the Scottish hospitality industry is robust and strong. Despite challenges, there is a resilient spirit across the sector. Continued collaboration, innovation and commitment to commodity will undoubtedly contribute to the industry's strength and recovery. What was your comeback to what the Edwinton Group has done? That is that they are looking at the overall picture. We are looking at small independent licensed operators that we represent. We carried out those six-monthly surveys. Unfortunately, the one that we are doing just now will not be ready until the end of this week. One of the things that stood out for me was that we asked a more direct question of are you considering closure or are you going to close? Previously, I said that you are looking at cutting operating hours, etc. 3 per cent of respondents have said that they are either closing or seriously considering closing. That is why we could lose another 130 pubs. For our particular sector, it is a serious issue. Colin Smyth talked about being hit by legislation. You have given the example of the low-emission zone in Glasgow. It would be interesting to see the figures from the LEZ, particularly as we move forward in terms of change. What other legislation do you think is having an impact? I think that it is the legislation that is going to have an impact. We have gone through the deposit return scheme, which I am afraid to say was shambolic, and really hit the industry who were doing their best to prepare for this. That is going to be back in the limelight in 2024. You have a tourism tax—I know that it is a visitor levy, but it is basically a tourism tax that is going to put extra burden on industry, not just for the costs, but for operating it. You have alcohol advertising restrictions, and I understand that that is going to be reduced in its scope than what we were expecting last year. Those kinds of things do not help the industry that is fighting for its survival or our sector that is fighting for its survival. In many other parts of the world, tourism levies are there and they work, and they have not had an impact in many of those places. What difference would a tourism levy coming into play here be from tourism levies that exist in other parts of the world, such as Spain, Germany and across Europe? Other parts of the world do not have 20 per cent VAT when it comes to tourist spending in this country. We are also looking at a tourist tax, which is going to be on top of that 20 per cent. There is VAT on top of the tourism tax, so it is a tax on a tax. It is another cost burden, not just for the industry but for consumers themselves. Have you got a spy over my shoulder in terms of my notes, Colin? I will let Mr Stewart in later. He is going to ask me some questions around VAT. We will come to that as a subject. I know that it is something that the sector has raised. To finish the initial line of question, I will come to Mark around the financial status of the hospitality tourism sectors. Last year, the committee in its budget proposal asked for protection of the Visit Scotland budget and recognised its important role in helping to attract visitors and support the sector. There is a proposed cut to that budget in this year. What concerns do you have around that? As I said earlier, we have seen an increase in international passengers to Scotland. We have seen an increase in their spend. The number of visits is slightly lower, but the spend is higher. What impact or concerns do you have around the Visit Scotland budget? Thank you, convener. I would like to pick up on a couple of the other or add to the contributions that my colleagues have made and pick up on some of the questions that have come back. First and foremost, the frustrations that the industry has more so right now is our ability to be able to compete in the future and present a product that is really how they would want to present it. It presents real value for money and where we are seeing right across the globe now, tourism is recovering very strongly across Europe. It is pretty much returned to near pre-pandemic levels. In terms of the conditions around the financial pieces, and I will pick up later on the visitor level impacts, but this ability and frustration of not being able to invest because the profitability of the business is not at the levels that it needs to be. It is not just about investing in the actual asset and the experience, it is about investing in people and how can we retain those staff as well against a backdrop. I got an email from a private independent operator who is very successful or has made a huge commitment to Scotland over recent years. They operate in the highlands and also have businesses of different diversity, so brewing and to hotels and restaurants, etc. It just came through randomly to me on Saturday, but I think it, I would like to read it out because I think it is very typical of many of the views and opinions of a lot of the people who operate in the sector. If that is something that is not very long email, but it will give you a picture, I think, of some of the sentiment and the frustrations that sit around it. I do not think I have ever known a harder time to operate a business in Scotland or seen a government destroying any hope for growth and the ability to come back from the years of Brexit, Covid energy costs, interest rates, huge tax rises, cost of living crisis. In fact, it seems as though we are determined to squeeze any money left within the sector and ensure the final nails in the coffin are truly hammered in. Sadly, I feel as an independent operator, part of a dying breed where the future will see global chains running hospitality in Scotland as they will be the only ones left who can offset the costs of operating. I remain a very positive person with a solution-led approach to life, and I have, as I always have been in my professional life, and I have responsibility for hundreds of staff who all need to see a calm and positive working environment as they themselves are struggling with their own family circumstances and the state of the economy, creating a positive working environment under these conditions is a daily challenge, requiring every bit of leadership and energy I have. For the past four years, I've had to be a social worker, a pastoral leader, a financial advisor, and I've offered more flexible working conditions before than I can ever think about when I've been operating a business. This includes ensuring we're paying all our staff real living wage, supporting those who can only work a few hours a week, as this is not enough to live on, so they require free meals before and after they start their shifts which we provide. With training involving accessible communication, managing difficult conversations, mental health and well-being before training on skills, needs for actual job people are doing. We're literally sorting out the mental health and financial mess which caused by decisions taken which lacks any business understanding, and not because it's part of my role as an employer, but because it has somewhat, it's far too many people are suffering, and the cost I wake up every day pushing down fear and wondering what is coming today. Looking ahead with the tourism levy, DRS, high taxes, all to proper profiling economy, yet we're still seen as a cash cow for government and councils. Not sure they understand or care that this is not the case. We are their answer to funding cuts and infrastructure. For a government that perhaps wants to see change, we seem to be destroying independent operators instead of allowing the Scottish hospitality industry to thrive and flourish. Despite these challenges, I will still address these issues and do everything I can to support my team, my families and the barriers around inclusion and sustainability. Anyway, rant over. Thank you for being our voice. I received that, as I say, and it's not the first. It comes from many, from different people, all different types of businesses, owners, operators, large and small. We have huge ambition in here. We have obviously seen positive growth in international numbers. We're about to get some more results, I think, published today, which shows that. So, as a country, we are a destination of choice and in demand. I guess the other concern we have right now is that you can come, but it's important that we're able to give them something to do. If pubs in restaurants and other businesses are shut, then actually that proposition becomes weakened against a very competitive market that we're up against elsewhere in the world. Gordon MacDonald, do you wish a supplementary? I'll just point out a clarification on the email that you read out there. Sorry, Mark. I was busy taking note of all the points that she raised. Apart from the tourism levy, which is Scottish Government responsibility if it's introduced and if councils decide to take it up, you mentioned energy prices, high interest rates, cost of living, economy, social security, all within the remit of the UK Government. So who was actually, the email pointed at, was it at the UK Government or in general or what was the situation? It's a general piece and I think what we've always, all of us have been saying around the discussions around business is that it's the cumulative impacts of everything that's happening at the moment that is actually put pressure on and actually we need the stimulus to enable that economic growth to happen and actually the conditions for success for business which is a lower level of VAT, it is not having any extra burden of tax put on us or framework that sits around it, that won't, that prevents I guess those businesses from having the confidence to invest and you know again I come back to this competing concern around prices having to be pushed up to combat inflation and actually when you are now commanding a price point for a meal or a hotel stay or otherwise it's perhaps a bit uncomfortable even for the owner and operator to charge that and there is choice out there and as a consumer of course we're all more and more conscious of how much we will have available to spend when we go out and it's not just overnight stays and when you go out and you're asked to pay a bit more you expect the quality to be a bit better and actually the service standard to be better so it's the compound impact and the worry is is that you know looking forward there are levies and obviously there are other there's other legislation under discussion still and whether that is alcohol advertising deposit these are all going to be cost to businesses at the end of the day so you know it's building and building and the industry like this particular owner who have invested millions so far also you know shouldering the responsibility rightly so because they want to about the care of their local of their people but also about the community as well that they support and contribute to. Thank you. Just before I bring in Mardal Fraser the question about Visit Scotland and the budgets and you talked about competition and I think last time we looked at this we looked at the example of Ireland and the investment that they made and they have you know there's a similar there's a relationship there between Scotland and Ireland in terms of what our tourism offer do you know where the Visit Scotland budget where that kind of sits in comparison to how much other countries are putting into. By direct comparison I can't give you 100% affinity on that but I mean to the point around the Visit Scotland budget being obviously sliced I know for a fact that there will need to be some changes to the core activity that they are have been able to do the rural infrastructure fund in particular is one that obviously is a big chunk off where there are investments that are being made to support that infrastructure piece but in terms of core marketing and international competitive and creating that awareness I know there will be a a slide down Irish the Irish government have actually now lifted their levels of VAT slightly but when you look at the the evidence of of what they are doing globally still is very very prolific even though Dublin airport is actually at capacity of 40 million passengers going through it every year and they're still not holding back and they send out huge delegations to the likes of the golf community and golf shows as well so my counterpart there who I keep in close contact with has still got his frustrations as well but they are still very much a competitive destination and it's not just Ireland we should be looking at we should be looking at other European destinations as well. Okay thank you Murdo Fraser to be followed by Colin Smyth. Thank you community good morning good morning gentlemen. I've got some questions around what the Scottish Government is doing in its budget but before I come to that just as a follow-up to the the previous discussion Mark you were mentioning some of the UK wide pressures on the industry that so VAT let interest rates energy costs but what I'm interested in is there is a specific Scottish angle to this that's different so to contextualise this there was a press report I read at the weekend I think it came from the Scottish beer and pub association Colin your your rival your rival lobby lobby group but according to figures they had pubs in Scotland are closing it twice the rate of those in England so I appreciate their issues UK wide we've discussed but are there specific Scottish issues that make the situation more difficult here? Anyone that wants to pick up? Well I'll go back to the the rates relief that we were looking to have it's two years now we've not had that I think that would have made a significant difference for our membership being small independent operators so that's reflected in the fact that you know we are seeing pubs close twice the rate than that of England I would like to add and it's not just about pub closures it's the number of pubs that are not operating to their full operating hours January February this year we see about just over 50 percent of pubs will be operating restricted hours many will be either five or four days a week because there's just not the business and the costs are forcing them to do that so as Mark says if you're having some sort of offering for people coming to Scotland if it's January February you know half the pubs will be will be on restricted hours. Okay thanks so I'll bring Leon in a minute but just follow that up you know some of these issues are not just restricted to Scotland or the UK so I had a meeting with the German consul general just before Christmas and she said you know in Berlin a lot of the restaurants are shut now two or three days a week because they can't get the staff so so there are issues that go beyond but what I'm really trying to focus on is are there specifically Scottish angles here Leon? Yeah I mean I think Collin's touched on the the issue of business rates non-domestic rates and that's certainly where our businesses are at competitive disadvantage to to those operating in England for example our rates are generally higher for businesses here in Scotland versus businesses operating in England a lot of my members are operating right across the UK so obviously they're able to kind of tell me that you know that it is a disparity between the between the costs of of doing business in Scotland versus rest of the rest of the UK. We had the revaluation in 2023 I suppose we went into that process with hopes that we might see businesses starting to get more reasonable rateable values attached to to their businesses in most instances we saw quite the opposite with businesses being charged certainly amongst my membership you know anything up to 25 percent more for their business for their business rates than than before we obviously have another revaluation coming in 2026 now we're on a so three-yearly cycle and you know businesses are really concerned about how that's going to play out particularly with turnover being high rents going up you know they could be in for a really a really big financial hit on the next round of business rates as well this is something that we need to address we need to address the system which is 170 years old is it fit for purpose is it actually delivering the investment opportunities for investment and growth that we need to see so i mean that's a specific that's the specific scotland angle to to this then we've obviously got the 75 percent rate relief which obviously wasn't passed on again in speaking with our members they're looking at being their pubs in scotland being disadvantaged to the tune of about 15 000 pounds a year medium-sized hotels about 30 000 pounds a year and then for larger businesses who would get the cap that's 110 000 pounds that they now don't have to spend on rising costs to you know ensure that the fabric of buildings is up to scratch so that it's absolutely bang on for for people who are coming in as guests and and visiting so the particular scotland angle is the issue around business rates mark yeah and obviously you know we've got that those a lot of these businesses are sitting now um obviously with those in their in their disbursement box and we're hoping those reliefs et cetera would take some of that pressure off but i think leons you know summarised it very well so we we it's that two years on the bounce where it's just not been given that flex and again it comes back to that investment piece competition creating the right um sort of proposition and and to the point you know earlier around has there been a change i can't remember if it was gordon or kevin who'd said who'd said the um has there been a change in behaviour businesses need to respond and they they have been very fleet i think in terms of changing their business models over time particularly through covid most of them did but that all still comes at a cost and and the retention of staff is also a key one here so to treat to not trade seven days a week actually and only trade three actually your appeal to somebody who's looking for work becomes less as well if you can give them assurance that they have a longer guaranteed working number of hours that's fine but one of the other big impacts we're still seeing in towns and city centres in particular is there is still um you know a very different dynamic around people working in city centres there are very very few people um in those offices still which don't then bring the vibrancy on to the um the streets and the pubs and things after close of office or lunchtime can i ask a specific follow-up around the business rates issue because you've all made the plea for the 75 business rates relief that applied south of the border to being replicated in the scottish budget now the Fraser valentine institute have said that actually would be relatively more expensive in scotland because of the different structure of the industry here because there's a cap as i understand it that applies above a certain level in england and because they have more larger businesses in england more people therefore hit that cap and therefore wouldn't get the relief so um i suppose i'd interested to get your reaction to that given that even if you took all the Barnett consequentials from that in the budget it still wouldn't be enough to fund the full 75 relief for everybody in the sector leon well i mean there's there's ways of managing this i think one of the most disappointing things around the uh the 75 rate relief was that there was no discussion uh with with our sector about that i mean we all made representations to the scottish government about if this relief comes then you know we would really like to see it passed on obviously we'd like to see it passed on in full uh if you look at um how it's been managed in wales they've obviously gone for 40 percent that's not enough but you know the point is you know there's a conversation to be had here and i think if we're having a serious dialogue between government and business and we have a new deal for business um relationship if that is a genuine thing then this is a sort of conversation that we should have been having we should have been invited in to have with deputy first minister uh shona robison ahead of the budget to actually look at options and and possibilities rather than just being a flat no and you know it's it's the money as i've outlined its significant amounts of cash which make a diff will make a difference to business you know will make a difference to business some businesses surviving um some businesses being able to trade it something approaching an optimal level and for some businesses to perhaps put in a little bit of investment just to sort of keep their offer their offer fresh um but you know it's the money and it's the um i think the lack of respect you know for not actually coming to us and having the conversation about about this because this is the second year that it hasn't been passed on so i think the scottish government knew what the reaction was going to be um you know based on last time so i feel it would have been a sensible approach to have actually invited us in for a conversation ahead of the budget that didn't happen okay thank you i mean that's quite strong language saying a lack of respect do you think the scottish government is just not listening to your concerns you know we we're all engaged with uh with the scottish government we all we're all on lots of different meetings uh with uh with with tom arthur with richard lockheads uh with neal gray you know there's a you know a lot of good dialogue there but we needed a budget that actually backed up those words and you know we we just didn't get that and the 75 percent rate relief issue is something which really wrinkles uh with with my members um uh disappointment uh anger i mean that is how businesses have viewed this i think just going back you know that sort of chimes with the words of the member i wrote i i read out to some of those frustrations and to leon's point this is the first time we we've never had any any dialogue at all with a finance secretary um pre pre a budget um it was almost well there was no visibility at all very much welcome the the engagement with neal gray and and richard lockhead and we put submission papers in and they were well received but given the significance of this it's huge so to then obviously you know receive what is effectively only four million pounds i say only four million pounds four million pounds a very welcome support for the hospitality businesses in the island communities that's a small sum however uh when you look at the impacts that those businesses have had to take as a result of uh ferry failure it's it's barely due compensation for for loss so and and and the it gets spoken of and or referenced often around the small business bonus scheme which is of course very welcome for many of the small businesses in our sector but there are still 10 000 businesses in our sector that actually receive no benefit or no support at all all right thank you um thank you gordon mcdonald did you wish to comment to that thank you uh cullin smith to be followed by cullin beatie thanks convener and good morning to the panel can i follow on from murdo's question and i mean the the impact of the budget i know it was hugely deflating for many businesses in the south of scotland hospitality businesses we're looking for that additional rates relief and the concerns over that are obviously well documented what maybe isn't as well documented though is the sort of wider issues around business rates that i know you have strong views only on you touched on this at the beginning when you said that turnover has risen amongst a lot of businesses and that's positive but not to the same scale as cost of risen energy cost staff cost everything else um and so profit margins have fallen um now that obviously has a big impact on business rates given the way that we calculate business rates for hospitality on the basis of turnover so can you say a little bit more about what the sector is looking for in terms of the wider reform of business rates given that these issues around around turnover well i think to put it quite simply we're looking for a lower poundage rate for for hospitality businesses i mean that's the um that's a model that could fix a lot of the issues pretty quickly um i mean i think colin certainly got some you know sort of ideas around that um as well but i mean reducing the poundage for for our businesses would be would be a quick way of actually addressing the um the problems that that they have with the charges on on business rates so the the idea of using turnover is still something that should continue if you are well i suppose i suppose i suppose there's there's there's kind of two approaches to this we need we need something which can help quickly so reducing the poundage is a good way of doing that i think if you know scottish government uh you know believes that our sector tourism and hospitality is a growth sector then you know how do you stimulate that okay you know reduce the poundage rates on the uh on on on business on business rates for hospitality businesses going beyond that you know it is about sort of looking at how the the methodology currently works how that's run you know basing it on turnover is not helpful basing it on rent values again is not helpful because our businesses generally pay more for for rent because of the nature of the businesses they generally generally need larger properties in order to have people come in and be comfortable in in their venues um they're obviously uh you know spend money um on those venues as well which then sort of you know pushes up the rental values again as well so our businesses are are caught with that so if you wanted to look at other options we could look at profitability um we can look at uh reductions if businesses are investing in net zero approaches to to running their businesses fair work if businesses are signing up to the principles of fair work how are they to be you know supported in that how do we use the business rate system to support those businesses um in doing that so there are a number of ways that we we can do this but these things take time so it's a bit like looking at well what could we achieve quite quickly and reducing the poundage that is paid by hospitality is a quick way of actually getting us to a more level playing field with other business types on the high street and also with competitors elsewhere within the the UK certainly very helpful the convener won't let me carry out a full review of business rates at the moment but Colin you've got lots of ideas are currently on about how we can change things do you want to share them some of them well from the long long term point of view um you know we had the Berkeley review what six seven years ago and here we are again that you know rates is still a huge issue um they haven't been fixed and particularly speaking on the licensed hospitality sector um we've had an issue with commercial rates for decades because of the way we are rated we were based on rental evidence we're based on turnover um nobody quite understands how they fully work out what the the rateable values are but it used to work out about eight and a half percent of your turnover was rates payable that has slightly changed between six and ten percent at the current time but that's still a very high percentage of your turnover you're paying in commercial rates compared to other sectors so along with the scottish beyond pub association we had suggested in a fuel that we are quite justified to ask for a specific license hospitality rates poundage and the suggestion was 35 pence in the pound and I say I think we're quite justified to ask for that simply because disproportionately we pay more than many other sectors in commercial rates so that would be a quick fix um but as Leon says you know we have to get the commercial rates sorted out for all businesses because it it's just not working now it's a very interesting point because of the business across from my office who showed me his accounts their turnover was going like that profits were going like that but business rates were going like that as well um sorry for the record that was an up up sign you won't you won't put that in the official record but that was turnover was rising profit was going down but business rates were rising so it's clearly something's wrong with the way we calculate it I don't know mark if there's anything you want to add to that around the sector what I'm also keen to hear from you mentioned earlier about you feel there's a lack of respect from government the one chink of light in the budget may well have been a commitment to review how we calculate business rates for hospitality have you been contacted by the government yet on that review do you know what the timescale is given the urgency of the issue um but you may want to come back on that one but I don't know mark if there's anything you want to add around other yeah I mean other obviously the commitment's very welcome and it's been a you know it's one of the work streams in the new deal for business group as well so you know that is welcome but I guess to Leon's point and Collins as well we need pace um you know before we lose too many more businesses in that adjustment but we also need to create the environment that attracts inward investment and more people to actually want to open up and bring new new product uh a new proposition to the marketplace so I think you've got a meeting tomorrow is that right with um Tom Arthur and Neil Gray and Shona Robison so you know that's a start point but it's 170 year old you know modeling um and um Barclay review six years ago okay we've COVID in between but there has to be transition and there has to be quick and and when you're looking across the rest of Europe you know as an industry this sector stimulates an awful lot of benefit for the local economies and it can be a real economic driver we've got a very sort of I think a backward model here that has to change so uh but welcome the dialogue which I think is important but it's great words it's about action now so okay thank you um Colin Beattie to be followed by chemistry thank you very much I'd like to explore another aspect of the Scottish budget which has been raised the budget proposes that there'll be a further divergence in income tax between Scotland and the rest of the UK now submissions from STA and UK hospitality argue this is making it harder to recruit and to retain talent is there any evidence on the extent to which this is actually impacting in businesses in tourism and hospitality and maybe I can ask mark if you would like to kick off on that thank you for the question and I yes I mean we've said this um because we we do have concern and we do know and Leon's chair of the UK who is chair of UK Hospitality Scotland is the managing director of Crerahotels and you know recruiting senior management we're now having to pay you know more than the average salary that would be offered elsewhere in the UK to compensate for the higher tax bans my own son is is the resident manager of Glen Eagle's townhouse here in Edinburgh at 32 years old he's very proud of him very successful young man but there are a lot of young people of in his age you know his age bracket who are exceptional in what they do emerging talent in Scotland and I think there are also a lot of other opportunities elsewhere in the world for for young people to go and perhaps further their careers elsewhere so the dangle of the carrot of do I pay more tax or do I go and look at other options are people likely to come and tap away that talent from Scotland which we cannot afford to lose is one that gives us concern the hard facts will be in the ability to recruit as well and I think you know certainly speaking to Chris Wayne-Wills when he said to me that you know those are the sort of inflated salaries that he couldn't obviously have to weigh up whether he can afford it or not to attract that talent in because of the tax bans is something that perhaps puts us at a disadvantage but you know the proof will be in the pudding in particular I think over the next few months to come of weighing it up but it's a live conversation within the industry without question in those and with amongst the colleagues who who fall into that new banding I suppose in my own mind I never think of the hospitality business as being particularly highly paid certainly at most levels you've mentioned about senior management in hotels and so on falling into that category that would be picked up by the increased taxes what other areas might be affected well we are attracting I mean we employ people in our businesses now who are not just your perhaps traditional hotel employees we've got marketing experts digital digital experts engineers you know different skillsets are right across the piece who who are all needed to you know support an industry that actually delivers the the rounded tourism and hospitality experience you you look at the Edinburgh International Conference Centre the Royal Britannia and I'm delighted to say that many people who are working in the hospitality sector now are earning levels of in that in that banding now because obviously costs from the bottom up from the real living wages you know escalated right the way through the through the the the group of people that are employed in a business but the skillsets accountants you know these are all individuals who are essential to our industry as well it's not just the the front line service staff that we're looking at here perhaps Leon might like to come in of course yeah I mean if you look at you know the the wage rises the salad rises have been taking place and within hospitality I mean there are now sort of you know many sort of mid-ranking and certainly senior chefs who are now sort of in those upper upper brackets for paying income tax and this is where a lot of hospitality businesses are really struggling to to get those those key those key workers coming in so you know anecdotally members are saying that you know this is this is something which is cropping up in the sort of interview process and when people are actually looking for roles to take on roles move into Scotland from elsewhere in the UK this is something that they're asking about so there's very much a sort of sentiment and perception piece in there the the facts are that businesses like the like creter hotels as as mark has highlighted are having to pay more in order to offset the the income tax increases as well I mean it will take time to see sort of how this how this works out we'll obviously be able to assess that against our members Scottish Government will be able to look at migration into Scotland from from other parts of the UK to see how that's been impacted by divergence and income tax as well but it's also plays into the narrative of Scotland being a more expensive place to do business you know we're looking at large hotel groups who are looking to invest you know Scotland's on their list you know the you know Scotland's a great place you know people want to come here but questions are asked about is it a good place to do business with all these costs and you know will there be any change to that in in the future so so it's it's an important point because it's something that we need to actually understand more on in terms of you know what the what the impact of that of that is marks also talked about professional services that our businesses use as well and we know that other parts of the economy are saying that you know it's proving difficult to get those professional people to to move to Scotland because of the the higher rates of income tax so it will be one that we'll have to watch and see how it plays out over over time but it's being raised by members fairly consistently at the moment I guess the difficulty is that most of the evidence we're receiving is anecdotal rather than you know hard facts that we can say right this is what happened then and so on are you going to be gathering that sort of information pull that in from from our members so that can be played into the into the mix but I think it would also be helpful to actually see figures from Scottish Government I'm not sure if they're available or not on you know how it has assessed the the impact of of this policy possibly the Scottish Government would benefit from getting input from business on this absolutely which means there has to be hard facts examples which would help support that narrative is that what you're aiming for yeah absolutely um i mean that's that's something that we can we can add into the survey work that we do with our members and if you know have those with our conversations with our board in our council as well Kevin Stewart we follow by it thank you thank you and thanks to the panel for joining us this morning we've spent a lot of time on business rates this morning and I have to say that I obviously get folk at me about business rates but not as many folk and you could probably name the folk actually but in terms of your members but not as many folk on about that is certain other things you mentioned high energy prices in terms of the conversations that I've had over the last year 18 months energy prices has been way up there in terms of the additional business costs and you know you may want to make comment on that but the other thing which comes up again and again and again is VAT and obviously there were some changes during the course of the pandemic which were beneficial but again there are some structural things that have remained the same for a long while for example the FSB the other week called in the UK government to uplift the VAT threshold by inflation which hasn't happened since 2017 there have been calls from others in the industry around about different VAT rates for hospitality for pubs and hotels what on that front would you do do you back the FSB's call around about the threshold what else would you do to change the VAT regime to make it easier for your members we've been very clear I think unanimously in terms of calling for a lowering of VAT for the hospitality sector largely both to compete against other destinations and we've touched on the visitor levy earlier and hopefully we'll have a bit more conversation about that as well I referenced our colleagues in Ireland you know nine percent was the VAT level in Ireland and they were trading at that level and it you know there's evidence to show that it actually delivered more for returns allowing that lower level of VAT and the stimulus that it brought into the economy so our UK budget submission and will come as no surprise as it has been is to call for a lowering of VAT again and we also think a lowering of VAT at a national level good for the consumer too so that VAT campaign campaign at the moment is calling for VAT at 10% which again by comparison to other UK compete or our European competing destinations is more favourable as far as the the VAT threshold as well I mean 85 000 pounds is a is a low level at the moment and we're certainly concerned or what we see across Scotland in many of particularly in rural parts is a lot of the the businesses obviously electing not to trade above that level and that then removes the the product offer with a levy obviously should it be introduced by a local authority that some of money would then be treated as revenue and obviously then lift the that business quicker to that that level and potentially reduce the capacity so we would expect and hope that we would see a calling for a rise in that threshold to create more year-round offering and more year-round opportunity so very much a strong ask and will continue to be so and I think we have a collective voice across all parts of the industry it's not just a coming from a select few across Scotland or otherwise absolutely I mean the issue of VAT is key point which is continually raised with with the Treasury with the Chancellor with the Prime Minister this is something that we we need to get down we're trading at a huge disadvantage having 20% VAT on on hospitality when we had the reductions during during Covid I mean they were incredibly welcome they helped our businesses a lot while they were able to while they were open and able to trade about 70% of hospitality businesses actually passed that fat saving on to their customers as well so stimulated more demand more spend and obviously helped helped customers at what was quite a difficult time as well so there I think there are sort of clear parallels with the situation that our businesses find themselves in now and a VAT reduction would help businesses get over the many hurdles which are in front of them at the moment but in the medium term it's also a key to unlocking growth and investment opportunities it's the thing that's holding holding many businesses back as well and obviously if we had VAT reduced as a destination as Mark has said we would become much more competitive which would you know increase the appeal we'd be able to bring more visitors here to stay in our accommodation use our our pubs bars restaurants and and so on so that that that is a critical point and that's an ask within the UK hospitality budget manifesto for the 6th of March to have that that reduction in put in place for for our businesses on the point about threshold marks really answered that I mean we've got a situation at the moment where the threshold is certainly holding back growth and businesses could be could be trading more and that's that's not helping certainly certainly our destinations nothing much more to add to what's already being said but you mentioned here about other issues that you've heard businesses businesses have since just before Covid if you look at all the costs of running a business in our sector so we're talking about you know drink food wages utilities it by the end of this year we reckon it's going to be a 43 percent increase in running costs so anything that would help of that reduction would certainly you know help to combat these increases that we've seen and we can't pass them on so it would help businesses if we got something resolved very quickly when it comes to VAT in terms of that threshold and folk you know choosing not to trade up beyond the 85k if you any idea amongst you how many businesses that you represent are falling into that bracket don't have a definitive number but many would be in the sort of bend breakfast guesthouse sector as you as you probably appreciate and I think the other thing is that we need to also what we're told to to lift yourself above as well to actually deliver and grow your revenue according you then start to get into the realms of employing people too so it needs to be a meaningful adjustment because you can obviously stimulate and create jobs but actually that balance is there so um and I guess the monitor is to when you you just look across the highlands and islands and see how many people choose to shut their door at the 31st of October or immediately after that half term window and there are a lot and yet um we genuinely think that there is there is demand and there we can create demand for year-round or certainly 10 months if not longer periods of trade because for a whole heap of reasons people will choose to you know see different opportunities in different levels of price point as well so and actually blended travel now is another area where people are choosing to go and perhaps stay away from their normal place of domicile in the country in rural parts and work and enjoy leisure at the same time so opportunities exist but in terms of numbers the FSB have probably got a handle on it it goes back to the the question around surveying and inviting these key questions from our members collectively we do that one of the new deal for business group work streams is about harvesting insights and data and actually making sure we are asking the right questions that are able to provide you know the intelligence we need to react positively thank you thank you thank you and I have three members left who wish to ask questions so we'll make some progress so Evelyn Tweed followed by Maggie Chapman. Good morning panel it's good to see you here today the committee is obviously aware of the labour market and skills challenges facing the sector can you provide the committee with an update on where you see things at the present time and what needs to be done in the medium and long term and maybe to Leon first sure thanks labour market is still incredibly tight we just do not have enough people in Scotland to do the jobs which are which are out there linked to that their skills shortages as well so even where people are available to work they don't necessarily have the the full skillset that that our businesses are looking at we've still got about 55 percent of our members in Scotland saying that staff shortages are an issue for them and within that there's the skills issue as well overall we're still looking at somewhere between 25,000 and 30,000 vacancies shortages in the sector what I would say is that many businesses have just had to adapt and just accepting the fact that they won't get the the workforce that they need to be able to trade in the way that they'd like to and to provide the the the business that that they would that they would like to but you know businesses are working incredibly hard to recruit talent and to hold on to talent as well many businesses as we've talked about are are offering much more flexibility we've seen pay rise when s estimates that pay across the sector as an average is up by seven percent many positions we attracting much higher rates of of increased pay than than that as well so businesses are working hard to do what they what they can we at UK hospitality and other trade bodies a bit are involved with something called hospitality rising which is a an industry led initiative to encourage more young people to come into the industry and to consider careers in the industry and that has been running for 18 months couple of years now you know good results and it's you know it's been brought in as a has began as a direct response to the the shortages that we were seeing in our businesses post post pandemic and and obviously with the loss of access to EU workers as well through through brexit so that's that's obviously had an impact and continues to to have an impact as well so so businesses are doing everything that they can they're sort of you know reaching out to you know very much more diverse range of of population as well to bring people in and get people thinking about jobs and careers in the sector pay is up conditions have improved businesses are working hard to to plug those gaps that that they have but it remains particularly tough and challenging bringing in skilled workers from overseas is something which is becoming has been difficult for for most businesses but the changes which are coming in place from from april this this year with the new immigration salary list and the increase in the the salary from 26 200 to 38 700 is going to put that root beyond the vast majority of of businesses so this then is also another reason why it's important that we can attract in talent from the rest of the UK as well into into our businesses here so businesses are spending a lot of time on the on the HR side of things and working hard to to retain the good workers that they've got. I think as obviously Leon talked about the sort of 25,000 figure at the moment I think what we need to be mindful of is that by 2036 sorry 2026 we need 40 000 you know how because you'll have to accommodate churn and you know changing the perception of the industry is something that the industry has been working very hard both in terms of its obviously pay and reward which is great I think we are the sector that's got the biggest accelerant towards the the real living wage payers and any other sector at the moment okay we're still a bit behind but you know changes recent royal assent around gratuities and all of these other things means that the actual industry is actually an attractive one to come and work in because it is actually pay and reward is not bad but also it's more not just the young people it's more the wider ranging sort of age population people choosing perhaps to have a second career creating those variable or varying opportunities that exist if you look in the attraction sector historic houses where a lot of volunteers and those types of opportunities that come about and it goes back to being able to trade and be open but importantly in you know what I hope everybody and I know you know many of you have have met colleagues in the industry who work hard with the likes of hospitality industries trust Scotland springboard the industry are very committed to doing and helping young people and people of all age groups into work and you know we have a lot of other good initiatives to raise money to support the investment in upskilling and hit Scotland this year it's its 30th anniversary and the amount of money that you know is contributed by industry to them put the emerging talent through and accelerated skills development across a whole wide range of of skillsets is is is something that we're certainly committed to but when you know going back to you know the availability of offer and you hear the inbound travel operators tour operators frustrated because actually the property that they want to go to is actually closed for two days a week because they are protecting the staff level that they've got and therefore don't trade on a Monday or Tuesday and that the knock on impact of that is that stopping that travel trade business placing business in Scotland when they know they've got demand and many of them are now telling us it is difficult more and more difficult to do business in Scotland because of the breaks in the supply chain and that's in the broader sense of the supply chain as well so ongoing investment into apprenticeship model apprenticeship skills and all of these things we are you know very much hope that the the recognition that that investment is forthcoming into into the sector as well to grow it and stabilise it and adapt you know but our industry is a people industry and we need people in the front line to have a conversation and we can be very good with technology but people want to engage with people whether that's a chef over a counter or a receptionist or or otherwise. I would just like to add that staff availability has been a serious issue and continues to be for our sector look at the results we've had recently we're seeing about two thirds of premises have had issues about staff and a third of the respondents this survey we've carried out have actually had to reduce their operating hours solely because they don't have the staff to actually open their full operating hours just an example jumping back to pre christmas I had never heard of pubs and bars and restaurants that normally open on christmas day taking the decision that again because they couldn't guarantee if they would have staff that actually open on christmas day something i've never heard before so it is a huge issue and I think as a sector you know people are looking at their work-life balance because of the shift patterns we can offer you know that helps people that are looking at perhaps working only so many hours a week and as mark says you know we've improved the pay offer terms and conditions and it is a good industry to work in but we continue to have continue to have problems with with getting staff housing transport obviously another big challenge for for the sector of how do we create those where people can stay and we know the housing challenges as well documented but to the point around attraction and Leon touched on the hospitality rising campaign and changing perceptions of our industry there was a 23 increase of people looking to wanting to work in the industry for reasons of sociability and it wasn't an issue around pay they wanted to actually have that sociable interaction so which is a positive I think maybe just one one final point just to kind of bring it back to the budget I mean we saw the skills budgets cut within the in december for this for this for this coming year which again doesn't help our businesses so I think of you know big concern is the fact that the flexible workforce development fund is being removed and a lot of hospitality businesses were able to make good use of that engage with local education providers and schools and so on with the help of this fund bring people you know young people particularly into into hospitality and there were certainly a lot of businesses that were really banking on that continuing to actually assist them bringing more people into into the sector so it's disappointing that we've seen that cut so you know we think what we've talked about is actually businesses you know taking a lot of this activity on themselves and perhaps what we're seeing is just not the kind of support there in the public realm that that businesses need one thing that I did want to touch on in my constituency I've got fourth valley college it's got a great offering on hospitality and tourism courses I had a good look at all the courses last night I didn't actually know there was quite as good an offering is that how important is that to your industry that we have ready made courses maybe not as one of you touched on just for young people but for anyone that wants to come back into the sector it's likely important and it needs to respond to the needs of industry though so keeping those courses relevant and fresh is important so our national tourism skills group which many of us are represented on is there to inform we work with the academic sector we've got you know professors from Napier University and representation from the college network on there so responding to the needs of industry in the future is going to be key and making it accessible I guess also though when you go back into high school education actually it's how you present those opportunities in through the careers options and again there's an awareness and understanding that's needed to be better presented around what hospitality actually is and what those career paths are and the opportunities so the pathways there I'm not sure that we've had as strong a take-up or certainly we've seen slippage in some of the draw into those hospitality and tourism career options through the next further education and I think you know that's potentially because people see this industry as being is it going to stay open is it going to be shut is there you know a number of other factors that could influence decisions but business is obviously sitting there is a a lot of the university sector I think of drawn businesses as a sort of the staple and then they bolt the other sort of specialist areas on top of it. Maggie Chapman's coming in with a question about the workforce and maybe some of the points you want to make can be addressed to Maggie Maggie and then Brian Bottle. Thanks very much Cairn good morning to the panel thank you for being with us this morning just following on actually from Evelyn's line of questioning I'm interested you know we've talked already this morning about lots of issues that do affect the workforce do affect the attractiveness of the sectors that we're talking about payment of the living wage skills training immigration issues housing transport all all of these things I'm wondering mark mark you said and in your submission to committee there's you've spoken about you know making the sector more attractive and you say either highest you've got the highest acceleration towards payment of the living of the real living wage I guess given that both set both hospitality and tourism are some of the lowest paid in fact they are the lowest paid sectors in our economy I'm just wondering whether there needs to be a greater emphasis on on pay and whether that that is something that would help with the the shortages that that you described I suppose that they've the question within that are the shortages you described across across the board across the different types of jobs or are they focused in in specific areas within the sector so question around the real living wage because I think from my point of view that should be that shouldn't be something we aspire to that should be taken for granted I don't think anybody any good operator an aspirational operator in our industry would have any issue about wanting to pay their employees more but as you've heard from us all this morning the balance of trying to maintain high levels of business rate energy cost food inflation from being an operator myself many years ago and seeing what is now paid as a percentage of total turnover it's a big big shift and let's not forget in addition to the pay there are a number of other benefits that the individuals are getting and that doesn't a lot nine times out ten doesn't get picked up the the gratuity model is quite you know a significant sum of money the the meals the accommodation and all of this other stuff factors in is a very attractive package to an employee so but there is a limit to how much people can pay and to pay more and actually offset the other input costs means pushing the price point to the customer up and we are already a very very expensive destination we rank 140 out of 140 in the world in terms of taxation on on a tourism and leisure experience so applying yet more cost and passing that cost on to the to the visitor or the customer there's a tipping point and so it's positive and I think when you the cohort of hospitality industry trust people out there I think if you ask many many people in our industry do they think they get a good wage and have they got the opportunity to earn a good wage in this industry I think you will find most of them say yes and I speak again as I say from having a young man in the industry who's chosen to stay in this industry of his own back who is with his peers you know happy to be in this industry because he sees the opportunity in the potential in the broader sense and I'm sorry I asked too many questions in one but the bit about shortages um are they across you know are they from the specifics all the way up there is there I think there are specific skillset skills areas Leon touched on chefs it's not a scotland specific thing it's a global issue I guess we also have real concerns around the loss of language skills so when you look at guided guiding and you know other areas in the tourism economy where we would like people who have set skillsets who aren't with us anymore and we're not obviously haven't got language being taught in schools as well up to the level that we would like um housekeepers don't seem to be too much of a problem anymore because I think that's the flexibility that that particular job offers and as Leon said earlier you know how businesses have chosen to set up their their rostering very few of them have a split shift where you come in at seven and you go home at 12 and you come back at six they're much more balanced and across the rural parts of Scotland though where we've seen obviously depopulation happened of course that's where it becomes more um I suppose intense and challenging and having spoken at a number of conferences over the um the autumn period when you see you know those that generation leaving to go to university and then perhaps not returning um to their local communities as well to to take up work in the industry is concerning since geographically it's rural areas geographically it's probably more of a stretch but it's it's not limited to the uh gesture the rural parts it's a broad spread Leon did you want to come in um yeah I mean you know businesses are paying more they're having to pay more anyway um you know good businesses have been um you know very much on board with fair work principles uh both Mark and I are on the hospitality inquiry which is being run by the the fair work convention at the moment and it's been very positive um conversation I mean the the the key will be to get to you know a point where we find the levers to actually um assist businesses to pay real living wage and we've probably talked you know we've talked about those those what those I think we've talked about what those levers are um here here today um you know businesses are having to be much more um flexible in their approach um with with the workforce in terms of hours and flexibility um there I mean although all the uh the the points would covered in fair work effective voice opportunity security fulfillment respect I mean the operators that I'm talking to if you're in within membership within UKH they're all adhering to these um to these principles um some are accredited real living wage businesses um obviously everybody will have to pay more um from from april in terms of the national living wage as well um Mark's talked about tips we've had it we now have a tipping act which it takes effect from july this year which will ensure that all tips gratuities are passed on to um on to workers um tips are a strategic advantage for hospitality because you know it is another um way that we can promote jobs and careers uh it within the sector as well and uh I think with the tipping act that actually helps us um to sort of you know ensuring that we've got that level playing field uh on tips right across across the across the sector so there's a lot of very positive um developments um in this space within within the sector and I'm pretty certain that that is something which you know will continue and we will of course have the report from the hospitality inquiry I think some point later later this spring early summer um which you know will hopefully sort of identify um those levers that can help business get to where they where they want to go um but will also kind of point the way for um for our Government particularly Scottish Government to to assist in achieving those ambitions yeah um I think it's a very good industry working I think it's a career progression can be very quick in our sector if you're good at the job um there's as long as there's businesses left that people can to buy into um the one thing I would add about the the living wage yes of course we want to pay our staff you know as much as we can I think we have to reflect on the fact that it's an increase in cost for businesses but you then have other staff who have perhaps a longer service record or um have more qualifications um they're looking for their differential to be increased as well so it's uh it is an issue for business but yes we do want to pay as much as we can but you know please don't forget there's also increases for other staff that have been in the business longer okay no thanks for that I I suppose following on from that and Leon you talked about the the fair work convention work that that's going on that that you're all contributing to in in different ways how would you uh what what's the sense what's your sense of how industrial relations are across your your sectors and your members so people there's a key pillar of of the national tourism strategy scotland outlook 2030 I co-chair the tourism and hospitality industry leadership group with with Richard Lockhead and the makeup of that group includes um the union representation um and we have um Brian um is on the fair work group and I think um even quoting Brian not so long ago actually he's very encouraged by um the dialogue and the conversations that we've been having as a as an industry and this strategy again was was developed by the industry in recognition that some of the work streams that we needed to address are addressed we know that there are still challenges out there in one or two parts but overall I think our relationship um we're all as I say in the church together rather than um you know fighting against one another it's important that that is but we've never been a particularly um unionised industry at all um but recognising that fair work's important and how can we reposition the sector as the right industry to choose to work in as opposed to going to another industry is what we're all about okay and my final question if I can I suppose it's joining the circle because we I think we're all guilty of this in in some ways we focus on one issue and don't necessarily see the connections when you're talking about the the geographical variations of of skills or labour shortages the the challenges around languages being taught in schools the challenges around rural housing transport all of those things I suppose all of that requires public money and public investment too and that comes from taxation and and so there's there's a balance you know that a lot of what we've heard this morning is about how taxes are too high if we don't have those taxes we don't have any of that that public investment in in education in schools in in transport in in um the kinds of things that actually support people to live where you need them to live to work where you need them to work I'm just wondering are you involved in any conversations that do actually take that broader picture around our nation's economy rather than rather than sector specific and and what the levers are that will would affect specific sectors thinking about how pulling those levers here actually affect the other things over here that would have indirect consequences sometimes pretty far down the line yeah so I mean I think we've all been involved with NSET the government's economic strategy and that tends to be the the kind of starting point for a lot of conversations with with ministers as well so we're we're kind of well plugged into that I think a lot of the the issues that we've highlighted today and the challenges that we've highlighted today today are not exclusive to tourism or hospitality if you think about housing and transport I mean any trade association in Scotland would would highlight that similarly around the skills piece as well that's not something which is unique to us every every trade association I speak to is you know looking at those things we need investment we need taxation yeah I think there's other there are the things Maggie that are barriers in the way our planning system is awful you know we have a shortage of planners and you know the the accelerant to to get planning through systems to you know to attract private investors to who might be quite happy to build accommodation for staff etc there are a number of other areas that actually get in the way and they walk away perhaps from putting you know private money on the table to do that but as Leon said you know um as a as a collective business community whether it's you know homes of Scotland the chains of commerce ffsp we're all very very joined at the hip when it comes to understanding some of the the challenges and the balancing act that needs to be found and nobody is is is you know aligned to the fact that the public purse is challenged however um the levers and going back to what could really drive economic growth into some of the communities as well through perhaps some changes in how moneys are spent could obviously you know provide the stimulus and returns what you want yeah and I was just going to come in just to answer that question and say I mean if we can you know our our sector is all about growth and investment that's where our businesses want to be so if we can give them the kind of financial fiscal breaks that they need then they can invest they can grow which you know can then sort of ensure that there's you know more tax take coming in to to to government to coffers to spend on the services that we need and that we that we all want to we see there but you know it's always about getting that balance right and at the moment I think our our well I know that our businesses you know feel that they've got a lot of tax burdens on them and a lot of cost pressures on them from you know broader economic issues but also from regulation and legislation as well okay thank you thanks very much thank you just a couple of quick ones I think it was yourself leader mentioned to the Scottish Conference new deal for business just how would you assess progress against those commitments at the moment well look mean we're we're engaging in good faith you know we have very positive dialogue with with ministers I mean you know you know they listen to what we say but you know we're just not seeing the kind of actions that that we need to see I mean that you know that you know we need to see that that real delivery for for our sector and we just haven't had that and the budget was really the sort of the first moment to see that coming through now we have the opportunity to reform business rates we need to see you know where we where we can go with that but you know as well as dialogue there needs there needs to be action and that that's been the frustration the lack of action to anybody else I think there's a couple of things obviously at the core group I mean there are other work streams that are happening as a result of actions from the from the new deal group one of one of which is around looking at you know how breers are brought together the regulatory review group changing culture within the civil service itself in terms of understanding business and you know recent meetings which we've only been you know it well not only been but we've been involved in in the last week or so um there is clear demonstration from within the civil service that there is you know work in progress to make some changes here and I think inviting that commentary in and to create that better landscape is good but it it goes back to to Leon's point it is about pace it's about delivery um and you know there's an awful lot of time being invested by a lot of people in the business community um I'm not saying that a voluntary basis many of us are paid to be part of that there's part of our job but we need to see that sort of you know it's a two-way thing and I think the other concern um or the other balancing act is actually you know the verity house agreement of course is one thing and then the new deal for business agreements another and actually uh there's possibly collisions at times of where um what a business might feel is the right way to go actually doesn't necessarily slide with what the commitments have been made to the verity house agreement it's for bringing the call just just just on that I was actually going to ask around that the the what the contradictions might be between the verity house agreement and your business deal I wonder if you can maybe explain well I mean there's obviously you know the the transient visitor levy discussion is a big one of course it's a it's an it's an open up opportunity to hand over um decisions to local authorities to make make a choice on on how they might choose to introduce a visitor levy if it's done we we from as you'll be aware from our conversations as the organised STA in the group we really would like to see a lot more conditionality put around um a bill if if it is going to happen then so it's not just given as an open book to to allow an authority to do what they want with the money if it's there for a purpose to be raised for a purpose to reinvest in the tourism proposition and the experience then actually stick to that and don't just accept that okay we'll let the the local authority collect more tax and do or collect another levy and do what they want with it so you know there's a there's a balancing act here and at times we feel there's a there's a risk that it could just be on you go it's not our problem call it I just want to say that you know the new deal for business was very much welcomed I think there was a you know certainly an issue that from the business community that the Scottish government was out of touch with the businesses so we are very pleased to see the new deal for business being announced how far have we got from it in our view the test was i don't wish to go on about it is a 75 percent rate relief that was really the first test so i think the Scottish government's got a huge mountain to climb again referring to this survey 97 percent of hospitality businesses say that the government is out of touch with business so that's a huge mountain to climb the quicker we get back on track the better but yes all the trade bodies will continue to participate but I have heard of people saying well why are we actually part of this if nothing's really going to be achieved that'll help us in the short term thank you that brings us to the end of today's evidence session thank you very much for the panel for giving us our time this morning we now move into private session