Retailers are warning of the risks and consequences for
Scotland's high streets from inaction on business rates as other
parts of the UK press ahead with permanent rates reductions for
shops from April.
Both the UK and Welsh governments have recognised retailers pay a
disproportionate amount in business rates and are introducing
permanent rates reductions for shops from April 2026. The
Chancellor of the Exchequer is expected to confirm in her UK
Budget this week the size of reduction in the business rate that
will apply to retailers in England in the coming financial year.
The Welsh Government has also announced it will reduce rates for
shops from April.
The Scottish Retail Consortium is calling on policymakers to
ensure all retailers in Scotland also benefit from a permanent
reduction in business rates. Scotland's shopkeepers contribute
about a fifth of all business rates. The SRC is warning that a
less competitive business rates regime here would be bad for
retailers but also for Scotland's retail destinations.
Despite some welcome decisions in the last Scottish Budget,
including a freeze in the Basic Property Rate and ditching of the
mooted surtax on grocery stores, the business rate remains
onerous and at a 26-year high. Meanwhile, Scotland continues to
levy a higher business rate on medium-sized and larger premises
than is the case in England. Recent data shows 2,400 Scottish
stores stump up £9 million a year more in rates than counterparts
down south, a whopping £93 million over the past decade for shops
alone. In the last three years smaller Scottish stores have
missed out on rates relief available to counterparts in Wales and
England, despite Barnett Consequentials being forthcoming.
David Lonsdale, Director of the Scottish Retail Consortium, said:
“Governments in England and Wales acknowledge the rates burden on
retail is disproportionately high and are bringing in permanent
rates reductions for the industry from April. Unless we see
action to reduce business rates for all retailers in Scotland
then stores here risk being put at a further competitive
disadvantage and potentially materially so. It's not in the
interest of Scotland's economy, nor our high streets and retail
destinations, for retail businesses to be incentivised to invest
in Sheffield or Swansea over Stirling, Selkirk or St Andrews.
“The retail industry and devolved government have a shared goal
of making Scotland ‘the best place in the UK to grow a retail
business'. It's imperative the Finance Secretary sets out in the
Scottish Budget a concrete plan to permanently reduce the
business rate applied to retailers of all sizes. Failure to do so
could see consequences for commercial investment and for the
condition of Scotland's high streets, as destinations elsewhere
in GB become considerably more attractive and cost-effective
locations to trade and invest in.
“Retail trading is tough right now. Continued investment is
essential to keep shops viable and attractive to customers. If it
becomes materially more expensive to run shops north of the
border than elsewhere that's likely to shift investment to other
areas. It's up to Scottish Ministers and MSPs to ensure Scotland
remains competitive.”
ENDS
Note: SRC published its Scottish Budget recommendations paper in
September (scottish-budget-2025_v2.pdf).
The Scottish Government's Retail Industry Leadership Group's
vision is here (Retail Industry Leadership
Group: terms of reference - gov.scot).
