Tag: catch-22

Latest short-term let policy debacle hits Scotland’s self-catering sector, says ASCC

The Association of Scotland’s Self-Caterers (ASSC) is calling for urgent action to rectify yet another blunder afflicting Scotland’s tourism industry, this time stemming from a deeply flawed implementation of the new Non-Domestic Rates (NDR) process for self-catering holiday accommodation.

The ASSC has been made aware of thousands of self-catering operators being unjustly removed from NDR – and in some cases taken to Tribunal for allegedly failing to provide evidence of the 70 nights’ occupancy rule for the 2023–24 period.

Critically, operators failed to receive formal requests for evidence from Scottish Assessors which were sent out by untracked mail, despite easily being able to evidence the required occupancy. This is once again penalising legitimate small businesses – who do so much to boost local economies across Scotland – and was clearly not the policy intention.

Many long-standing and compliant businesses have not only been unlawfully removed from the valuation roll and commercial water and waste provision, but also hit with double council tax bills and are facing severe emotional and financial distress – all without ever receiving the legally required Assessor correspondence.

Recent ASSC survey work highlighted 63% of operators never received the formal evidence request letters; 95% of delisted businesses were able to prove compliance with letting requirements; and 81% have been billed for second home council tax, some facing eyewatering charges of up to £120,000.

To compound matters, in a response to a recent parliamentary question from Alexander Stewart MSP, Cabinet Secretary Shona Robison suggested that operators could benefit from relief schemes – however, this completely misses the point: if a business has been removed from the NDR system altogether, it cannot access any such support. This fundamental misunderstanding highlights just how disconnected the Scottish Government is from the realities facing the self-catering sector.

Recent figures from the Scottish Government [1] showed an anomaly in the number of properties removed from the valuation roll in 2023–2024 — more than double any previous year, with 3,810 removals compared to 1,540 in 2022–2023.

This latest development comes in the wake of the ongoing STL licensing and planning shambles, which has squeezed the supply of available accommodation while pushing up costs – especially in Edinburgh, the most expensive major city break destination in western Europe according to a recent Post Office Travel Money analysis.

The industry is now increasingly alarmed by the current impasse on the treatment of self-catering accommodation within the NDR framework despite pleas to relevant stakeholders. While Assessors assert that they are merely applying existing legislation and cannot act without further instruction or legislative change, Scottish Ministers maintain that Assessors are independent and therefore beyond intervention. 

The self-catering sector therefore finds itself in a troubling Catch-22 scenario which it hopes can be resolved through urgent and pragmatic leadership to ensure self-catering operators receive the fair treatment they deserve.

Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, commented: “This policy was introduced to remove economically inactive second homes from benefiting from NDR relief, which we support.

“It was never meant to target legitimate small businesses. The system has failed and it is now punishing the very operators who support our tourism economy and rural communities. We urge the Scottish Government and Assessors to act swiftly and lawfully to correct this injustice.

“As we approach the busy summer season, the last thing the Scottish self-catering needs is yet another debacle hitting our sector, hot on the heels of the accumulated regulatory burden from short-term let licensing and planning regulations, and before local tourist taxes are imposed. 

“This relentless uncertainty is not only damaging livelihoods – it is placing a significant strain on the mental health and wellbeing of small business owners who are already under immense pressure.

“Operators want to get back to what they do best but can’t do this with both hands tied behind their back. We need urgent leadership to restore consistency, fairness, and confidence in the system before it is too late.”

Mobile customers stuck in Catch-22 between mid-contract price hikes and exit fees of over £400, Which? warns

Which? is calling on telecoms firms to act on mid-contract price rises, as new research shows millions of mobile customers are trapped in a Catch-22 where they either have to accept exorbitant mid-contract price increases or pay exit fees of over £400 to end their contract. 

The Big Four mobile firms – EE, O2, Three and Vodafone – raise prices every April in line with the Consumer Price Index (CPI) or Retail Price Index (RPI) plus an additional 3.9 per cent.

EE, Three and Vodafone use CPI – leading to price increases of over 14 per cent in 2023 – while O2 uses the higher RPI measure, meaning some customers will face hikes of more than 17 per cent this year.

As these price rises are often applied mid-contract, people either have to accept these hard to justify increases or pay costly exit fees to leave their contract early. Shockingly, these inflationary price hikes also mean some providers will arguably overcharge customers for handsets that are part of bundled contracts.

The consumer champion has calculated how much an average EE, O2, Three and Vodafone customer affected by the latest price increases could see their payments rise in 2023 for both SIM-only and bundled contracts.

These price hikes are highest for bundled contracts – where the customer pays monthly for both the handset and airtime. Based on figures from Which?’s latest mobile survey, the average EE customer would see an annual increase of £66.36 while the typical Three customer would see a hike of £56.40 to their bundled contract due to mid-contract price rises.

The same EE customer would face eye-watering exit fees of £424.67 to leave a year early and Three’s customer would need to fork out £379.46 to leave their contract.

For EE and Three bundled customers – plus legacy Vodafone customers – these price hikes are applied to the whole bundled deal. As these bundled contracts are not broken into handset and airtime costs, Which? used an equivalent SIM-only plan to to estimate how much bundled customers will pay for their handset due to these inflationary price rises.

Using the example of an EE customer who took out a 36-month contract for an iPhone Pro Max with unlimited data, Which? estimates the customer would pay an additional £105 for the handset over the next year. A Three customer with the same contract would pay an estimated £86 extra for the handset over the next year. Prices for both providers will rise again the next year, meaning that customers will pay even more just for their handset.

For O2 and most Vodafone contracts, only the airtime part of a contract is subject to inflation – so the level of mid-contract price hikes and exit fees will vary according to the individual contract.

Which? has also analysed pricing data to calculate how much an average SIM-only customer with EE, O2, Three and Vodafone affected by the latest price increases could see their payments rise in 2023.

The average EE customer would see the biggest potential annual increase of £46.20. This is closely followed by O2 and Vodafone customers who would see annual price hikes of £42.72 and £42.36 respectively. The average customer with Three would see the lowest annual increase of £25.20.

EE SIM-only customers would face the highest exit fees of £295.36 if they wanted to leave a year early. This is closely followed by Vodafone and O2 customers who face exit fees of £287.88 and £237.08. Three customers face the lowest exit fees of £169.59 for leaving their contract a year early.

With Ofcom currently investigating mid-contract price hikes and their fairness for consumers, telecoms firms are facing a reckoning on these practices.

Which? is calling on all providers to do the right thing and reconsider any price rises they impose. Providers should allow customers to leave their contract without penalty if prices are hiked mid-contract – regardless of whether or not these increases can be said to be ‘transparent’ – and cancel 2023 inflationary hikes for financially vulnerable consumers.

Currently, Sky Mobile does not use inflationary mid-contract rises – and where prices rise, customers can leave penalty-free. Tesco Mobile used to operate on this model but has now introduced inflationary price hikes for some customers in 2023.

On smaller networks – like Giffgaff, VOXI or Smarty – these types of typical inflation-based rises will not apply, and customers are able to switch without penalty.

Rocio Concha, Which? Director of Policy and Advocacy, said: “It’s hugely concerning that many mobile customers could find themselves trapped in a Catch-22 situation where they either have to accept exorbitant – and difficult to justify – mid-contract price hikes this Spring or pay costly exit fees to leave their contract early and find a better deal.

“With many households struggling to make ends meet, it is completely unfair that people are trapped in this situation. Which? is calling on providers to act quickly and reconsider any price rises. Firms should cancel 2023 hikes for financially vulnerable consumers and allow all customers to leave without penalty if they face mid-contract price rises.”