Measures to stimulate economic growth, help retailers keep down
shop prices for consumers, and eliminate the £1 billion projected
deficit in government finances, should be at the heart of the
upcoming Scottish Government Budget according to a leading
industry group.
In its Scottish Budget submission – entitled Eliminating the
deficit, competitive tax, boosting growth (src-scottish-budget-recommendations-paper-sep-2023-1.pdf
(brc.org.uk)) – sent earlier this week to Deputy
First Minister and Finance Secretary, , the Scottish Retail
Consortium (SRC) says retailers are working hard to keep down the
cost of living for customers whilst themselves battling rising
outlays in the face of stuttering demand.
Retail is Scotland’s largest private sector employer providing a
quarter of a million jobs. However, recent data shows retail
sales have fallen back in real terms, shopper footfall is still
shy of pre-pandemic levels, and store vacancies remain elevated.
The twelve-page submission contains 21 recommendations from the
leading sectoral trade body and comes ahead of the expected
unveiling later this year of the devolved administration’s £50
billion tax and spending plans for 2024-25.
The SRC wants Scotland to be the best place in the UK to grow a
retail business. They argue it matters profoundly that Ministers
succeed in their plans – outlined in the Medium Term Financial
Strategy – to restrain spending and reduce the cost of
government, otherwise taxes might rise which would impair and
hold back economic recovery. The recommendations call for support
for consumers and help for retailers to keep down prices and
allow retail destinations to rebound.
Specifically, the SRC is suggesting government should:
- Eliminate the £1bn gap in devolved government finances; with
spending restraint rather than tax rises forming the bulk of the
budgetary action
- Bolster consumer spending power by ruling out increases in
income tax for less affluent workers
- Freeze the headline business rate next Spring which is
already at a 24-year high
- Accelerate the timetable for restoring the level playing
field with England on the Higher Property Business Rate, which
costs retail £9 million annually
- Rule out making business rates reliefs and licensing
permissions conditional on payment of the ‘real’ living wage
David Lonsdale, Director of the Scottish Retail Consortium, said:
“This will be a challenging Budget for Scottish Ministers. Meagre
economic growth, elevated levels of inflation and spending have
left the administration facing a billion-pound deficit in the
coming year which is projected to widen in subsequent years.
Increasing taxes could exacerbate the problem by further
restricting growth. A mixture of spending retrenchment and
forestalling any rises in taxation provides a viable path to
sustainable finances.
“Retail itself is going through a period of transformation,
driven by changing consumer habits against a backdrop of measly
economic growth. The last few years have undoubtedly been
turbulent, with weak demand and shopper footfall leading to
higher levels of empty stores in retail destinations. Cost
pressures continue to bear on retailers and households and we
encourage the Scottish Government to use the fullest range of its
powers to alleviate those costs whilst ensuring the regulatory
landscape is more conducive.
“This is a pivotal moment for Scotland’s economy and recovery
after three years of fallout from the pandemic and costs crunch.
The Scottish Retail Consortium’s recommendations aim to support
the government in taking tough decisions to get on top of the
deficit and to pep up economic growth by keeping down the cost of
doing business and by shoring up consumer confidence.”
ENDS
Notes: The SRC’s Scottish Budget submission is at: src-scottish-budget-recommendations-paper-sep-2023-1.pdf
(brc.org.uk)
