A POPULAR, family-run Lanarkshire business employing nearly 100 people has warned its bars and nightclub face closure unless there is immediate government support for the hospitality and night-time industry.
The Eden Group is just one of the many independent hospitality businesses struggling to cope with rocketing energy and supply costs, VAT and rates bills.
If no support is given in new Chancellor Jeremy Hunt’s forthcoming Budget, the hospitality and night-time industry is predicting that “thousands” of businesses and jobs will be lost over the next few months.
“The Eden Group, comprising 96 staff not including sub-contractors, will close without immediate action on soaring energy costs, VAT, alcohol duty and interest rates,” said Michelle Armstrong of the Eden Group, which runs Merlins Bar in Motherwell, and the Avenue, Envy Gin and Cocktail Bar and Eden nightclub in Coatbridge.
“With bills rising by up to 400%, the industry will be decimated without a pandemic-style response as the cost of living crisis is here and assistance is needed to protect business and jobs. We are already witnessing the scale of closure across Lanarkshire with Hamilton possibly being the worst hit so far.
“The situation is of course UK-wide but as usual countries like Scotland and areas like Lanarkshire are hit harder and fall quicker. Footfall in most pubs and clubs is already down 50% since lockdown, so every possible cut-back on operating costs has been made.”
The Eden Group had plans for expansion and has already invested almost £750,000 in the business but co-owner John McMillan said he was now “really worried” about losing it.
“We have grown to five units in the space of five years, including during the pandemic, and we are very good at what we do, but we need serious help here,” he said.
“We need an immediate VAT cut, rates assistance and Covid-style recovery funding – we are going to have to get some sort of grant to allow us to keep trading to April and we need assistance on energy bills.”
He said the business was facing a “frightening” energy bill of more than £140,000 for just three premises for the year.
“If there is no assistance whatsoever, I can see masses of small businesses going to the wall in the New Year,” warned McMillan. “We need help to rekindle this industry after being called ‘high risk’ during Covid as it pays billions of pounds into the government purse.”
Paul Smith, owner of the CLG group, which runs a number of bars, restaurants, hotels and nightclubs across the Central Belt and employs almost 600 people, said this was the most difficult operating period in his 40 year career.
“It’s worse than the pandemic because then there was government assistance, however meagre that was,” he said.
“The situation is dire. If businesses make it to Christmas, just watch the amount of venues that close in January if there is no support.”
He said the current political “tumult” and changes of leadership at Westminster – with mini-Budgets scrapped and new ones postponed – were only adding to the economic uncertainties faced.
“We just don’t know where we stand, but the energy costs particularly – with sometimes eightfold increases – are just not sustainable,” said Smith. “Businesses cannot afford to pay that. It is not a matter of will they close down – it is inevitable that businesses are going to close down and fold and go to the wall.”
He pointed out that the industry as a whole was very valuable in terms of the number of people it employs and its contribution to the economy.
Smith continued: “All of that will be lost because although the Government recognised our value when they introduced the furlough scheme, they are not quite so quick to support it in a meaningful way when it comes to the cost of living crisis.
“We need a VAT cut, we need a freeze on the rates in Scotland as there is in England, and we need more substantial support with the cost of living and energy crisis.”
Joe Keenan, who owns the Downtown nightclub and Exchange Bar in East Kilbride and employs 34 people, said he was currently “just going from month to month”.
“We have still not come back strong from the pandemic and the industry is pretty much on its knees now,” he said. “To be honest, it is doom and gloom at the moment and we are surviving by the skin of our teeth.
“We have seen five pubs close in Hamilton this month and that is scary. When you look at that you think it is maybe just a matter of time. Urgent help is needed without a doubt. We need a decrease in VAT and some sort of grant support.”
The Department of Business, Trade and Energy has been approached for comment.
