The Scottish Retail Consortium (SRC) is calling for the Scottish
Government to protect businesses from significant tax rises in
tomorrow’s Scottish Budget. With the devolved administration
facing a projected £1bn deficit the leading trade body believes
action to plug the gap should be focused on cutting the cost of
government rather than tax increases.
With retailers facing difficult trading conditions and further
significant statutory cost increases in the New Year, the SRC has
reiterated its demand that action be taken to blunt a possible
surge in non-domestic rates. According to a report published last
week by the Fraser of Allander Institute they calculated the
headline business rate will escalate to 53.1p in the £ if the
Finance Secretary opts to uprate it in line with September’s CPI
(of 6.7%). This would pierce the 50p/50% threshold for the first
time since the advent of devolution in 1999. Indeed, the headline
business rate was just 40.7p in the £ at the start of the
previous decade, in 2010-11, so a rise to 53.1p next Spring would
be a 30% hike since 2010-11.
David Lonsdale, Director of the Scottish Retail
Consortium, said:
“The Scottish Government faces a forecast £1 billion spending gap
in the coming financial year which is projected to widen in
subsequent years. Whilst businesses recognise there are few
palatable options for our politicians most private enterprises
are well versed in cutting their cloth in the face of weak
revenues and spiralling costs, having dealt with a tsunami of
hikes in commodity and supply chain prices over the past couple
of years with various statutory burdens sprinkled on top.
Regrettably the time has come for Government to take the same
pragmatic approach.
“Retail sales have fallen in real terms for each of the past five
months and the economic outlook is uncertain, yet it seems
Scotland’s retailers may be staring down the barrel of a hefty
£43 million hike in their business rates bills next Spring. The
business rate is already at a 24-year high and a fifth higher
than at the start of the previous decade. An uplift of this
magnitude would be wholly at odds with the Scottish Government’s
pledge to use business rates to ‘boost business’ and would
undermine efforts at high street and town centre rejuvenation. We
hope the Finance Secretary will blunt any uplift in the business
rate and give Scotland’s ratepayers a meaningful competitive
advantage over their competitors down south.”
“The First Minister has taken several
positive steps over the last six months to improve the
relationship with Scotland’s business community. This Budget will
give businesses the opportunity to assess exactly how deep that
commitment will run. We hope the Scottish Government will take
the pragmatic decisions needed to protect private sector jobs and
commercial investment and prioritise economic growth.”
Ends
The SRC’s Budget Submission can be read in full here: https://brc.org.uk/news/2023/scottish-budget-src-seeks-action-on-deficit-tax-growth/
