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Another day, another tale of woe from Scotland’s hospitality sector.
The intense cost pressures under which the industry is creaking under were laid bare in new figures that brought yet more headlines of pub closures and job losses.
The Scottish Beer & Pub Association (SBPA) revealed that 62 pubs closed in Scotland in the first nine months of 2026, taking nearly 600 jobs with them. More than half of those jobs, 330 in total, were held by people under the age of 25, making an already challenging jobs market for young people even tougher.
The SBPA, which represents major brewers and pub companies, said the figures should “serve as a wake-up call” and stepped up its campaign for the UK and Scottish governments to support the sector as their respective budgets approach. Chancellor John Healey will present the UK Government’s Autumn Budget on October 28, which will be followed by the Scottish Budget on December 3.
“When a local pub closes, the impact is felt far beyond its front door,” warned Emma McClarkin, chief executive of the SBPA. “Communities lose a valued gathering place, workers lose jobs and governments lose tax revenue. In Scotland alone, 62 pubs have closed in just nine months, costing 585 jobs and more than £6 million in tax receipts.
“These figures should serve as a wake-up call. Pubs want to invest, grow and continue supporting their communities, but many are being pushed to the limit by rising costs and an unsustainable tax burden.
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“As we approach both the UK Budget and the Scottish Budget, governments have an opportunity to back one of Scotland’s most important community assets. The UK Government should build on its support for the sector by freezing beer duty, increasing draught relief, reviewing employment costs for under-25s, and reducing VAT (value-added tax) while the Scottish Government should increase business rates relief for pubs and remove the £110,000 per business cap on that support.
“Without meaningful action, we risk seeing more pubs close, more jobs lost and more communities deprived of the economic and social value that pubs provide.”
The SBPA’s call for a VAT reduction has widespread support across the industry. The petition in support of the sector’s VATsTheProblem campaign, which calls on the UK Government to halve VAT for the sector to 10%, has now been signed by more than 405,000 people. It also puts Prime Minister Andy Burnham in a potentially difficult spot, given that he said he would argue for a hospitality VAT rate that was more in line with mainland Europe in February this year, when he was serving as Mayor of Greater Manchester. Recent cuts to VAT rates in Germany and the Republic of Ireland, to 7% and 9% respectively are credited with providing a major boost to businesses.
The trouble with Budget, of course, is that so many industries and stakeholders are also clamouring for better deals from the Government. Not only that, but the Chancellor’s capacity for “giveaways” looks to be severely constrained, given the rising cost of government borrowing.
In the case of the Scotch whisky industry, it argues that by reducing spirits duty it will actually boost government coffers in the long run. According to its analysis, the amount of money raised by the Treasury has fallen in the last three years as duty has been increased by around 17%. Mark Kent, chief executive of the Scotch Whisky Association, told me there is “no logic” to taxing whisky more heavily than beer, wine and cider, arguing that UK spirits duty is the highest in the Group of Seven (G7) leading industrialised nations and among the highest in Europe.
“When you look at how people consume alcohol, why should someone choosing to have a dram pay significantly more tax than someone drinking a pint? We want the Treasury to address that issue,” he said.
Away from the Budget, the will-he-won’t-he saga over whether Mr Burnham will approve the development of the Rosebank oil field and other projects in the North Sea returned to the agenda this week.
A report commissioned by Adura, the company created through the merger of Shell’s and Equinor’s UK North Sea assets, concluded that a decision not to approve drilling on Rosebank, Jackdaw and other planned oil developments would result in 3,330 fewer jobs being supported every year. It would also result in £10.8 billion less economic value for the UK over the next decade, the report found.
However, the report was strongly criticised by Oxfam Scotland. “It's hardly surprising that a report commissioned by an oil company concludes that more drilling is a good idea,” said Katherine May, head of Oxfam Scotland. “Asking it to assess Jackdaw and Rosebank is like asking a seagull whether chips should be left unguarded.”