Chamber and committees

I will continue the discussion about ROS’s finances. You highlighted that you expect this year’s income to cover all costs, and this year’s quarterly update shows that your income will be about £95 million. If we look at the four years prior to the pandemic, your income ranged from £72 million to £78 million. During the first year of the pandemic, that collapsed to £65 million. That figure of £95 million is a substantial increase—it is 45 per cent up on the first year of the pandemic and 20 per cent up on 2019-20, which is the last full year for which there are figures. Is that substantial increase in revenue purely down to an increase in housing market activity?

Yes, it is. You quite rightly touched on the fact that your fees had not increased since 2011. The current inflationary pressures—the consumer prices index is at 5.5 per cent and is expected to be above 7 per cent before the end of the year—will no doubt put pressure on wages and other costs. Do you anticipate any increase in your fees in the next few years?

My last question is to do with the large increase in provisions in your 2020-2021 accounts. The “Movement in work in progress” budget line has increased from £190,000 to about £13.1 million.

That is really helpful to understand. I would also like to understand your view on that income figure of £95 million. Do you expect that to grow in the next few years? I see in your corporate plan that you expect to get another £7 million of income up to 2025-26, but how much built-up demand is there, given the problems that there have been in the housing market, and do you see that plateauing in future years?

I move on to the labour issues. We all hope that hotels return to their pre-Covid and pre-Brexit occupancy levels, and that restaurants start taking up the opportunities when people start travelling again, whether they be staycationers, business travellers or international tourists. However, we need the staff for that to happen.

Leon Thompson’s briefing paper says that there were 340,000 vacancies in the UK and around 40,000 in Scotland, and that 40 per cent of businesses were not confident in their ability to recruit staff during 2022. What do we need to do to take up those challenges and take advantage of the opportunities? How do we close that labour shortage gap?

We have highlighted the need to attract new talent into the hospitality industry. Given that we have full employment, that many EU nationals left the country pre-pandemic and that there is no hospitality visa, Edinburgh Chamber of Commerce suggested on Friday that there should be a devolved immigration policy. Would the Scottish Hospitality Group support that, Stephen?

Leon Thompson talked about the need for a new immigration system to attract workers, including, for example, the visas for which the hospitality industry called last year but which the UK Government rejected. Unemployment in Scotland is at a record low of 3.6 per cent, which is below the level at which there is considered to be full employment. At a briefing of Edinburgh Chamber of Commerce on Friday, it was said that 90 per cent of the employees in the hospitality trade, particularly in Edinburgh, were EU nationals. Many of them went home because of the pandemic, but because of the end of free movement, they are having difficulty returning. How do we close the gap?

Given the demographic challenges that you have highlighted, would you be supportive of the calls for either a hospitality visa or devolving the immigration system?

Obviously, we need the tourism industry to bounce back as quickly as possible, given its importance to the Scottish economy. To continue the discussion about labour shortages, hotel occupancy levels are low partly because many hotels do not have the staff to service all their rooms. Many restaurants are closed at lunch time or a couple of days a week because of staff shortages. To paraphrase Rob Dickson’s comment, we cannot grow tourism in Scotland if there is a labour shortage. How do we address the 40,000 vacancies that we have in hospitality when we are at full employment in Scotland?

I want to continue the discussion about transport in relation to our supply chain inquiry. The strategic transport projects review that you touched on a moment ago, minister, recommends that there should be a modal shift from road freight to rail. What steps are the Scottish Government taking to support and encourage that modal shift?