The Scottish Retail Consortium (SRC) has written to Scottish
Ministers calling on them to ditch the mooted surtax on grocery
stores and deliver competitive business rates. The call comes in
the wake of the UK Government's colossal increase in employer's
national insurance contributions which is set to cost retailers
in Scotland £190 million each year.
SRC submitted its detailed Scottish Budget recommendations paper
to the Finance Secretary in September.
In an extract from a new letter sent this week to the Scottish
Government's Finance Secretary, the SRC's Director David Lonsdale
wrote:
Dear Finance Secretary,
Scottish Budget
The decisions taken in the UK Government's Budget on
employer's national insurance contributions (NICs) have
fundamentally altered the outlook. This was reinforced in a
letter yesterday to the Chancellor of the Exchequer initiated by
our colleagues in the BRC and signed by 79 retailers
(attached).
The colossal cost of what has been announced in terms of
employers NICs will have a significant and disproportionate
impact on the retail industry, which is Scotland's largest
private sector employer. We estimate this will add £190 million
annually to retailers' employment costs, starting from April. It
will come on top of other UK Government measures which will also
require further significant outlays, including the
above-expectations uplift in the statutory living wage and the
soon to be introduced extended producer responsibility levy for
packaging.
The sheer scale of the cost increase announced by UK
Ministers is alarming, more so given Scottish retail sales have
been flatlining for the past five months. This will be incredibly
difficult to absorb and will have consequences for retailers'
investment plans, staffing and employment, and potentially shop
prices. It will also affect suppliers.
Against this backdrop, it is unconscionable that Scottish
Ministers could compound the costs crisis facing the retail
industry by introducing a business rate surtax on grocery stores.
To this end, we implore you to ditch the mooted business rate
surtax. Furthermore, as set out in our Scottish Budget
recommendations paper and Tax Strategy submission, we ask for a
focus on competitiveness: restoration of the level playing field
with England for firms paying the Higher Property Rate; a
blunting of any inflationary uplift on Scotland's three business
rates; and use of Barnett Consequentials from reductions in
English rates to reduce rates here.
Yours sincerely,
David Lonsdale
Director
Scottish Retail Consortium
