Budget demands

Retailers call on Mackay to strike two-year accord with opposition

David Lonsdale

David Lonsdale: ‘unsettling times’ (pic: Terry Murden)

Retailers are calling for a cross-party ‘two year Budget accord’ to bring some stability in policy making to the current political uncertainty.

The Scottish Retail Consortium, representing the country’s biggest private sector employer, wants Finance Secretary to help shops and stores cope with rising costs and changing shopping habits by capping tax rates and cutting business rates.

In a 12-page submission Certainty, Competitiveness, Confidence  sent this week ahead of the Budget this autumn, the SRC calls for him to set out a deal with opposition parties over two years to give business more certainty and boost consumer spending.

It wants restoration of the level playing field with England on the large business rates supplement which has cost retailers millions in additional payments, a timetabled plan to reduce the headline business rate and no increases in income tax rates. It also wants a retail strategy co-produced with the industry to tackle issues such as the workplace parking levy, new environmental charges, council tax, skills, town centres, and regulation.

The SRC says retailers are re-inventing themselves for the future “in the face of profound changes in shopping habits, weak demand and spiralling costs.” Recent data shows flatlining retail sales, declining footfall, fewer shops, and a 9% drop in retail jobs.

The business rates recommendations come on the second anniversary of publication of the Barclay Rates Review report. Barclay said the higher large business rates supplement was ‘damaging perceptions’ of Scotland and that parity with England ought to be restored by April 2020.

David Lonsdale, director of the SRC, said:“Retail is in the midst of an unprecedented period of transition. These are unsettling times with conditions now the toughest in a decade. The only fixed point in a world of flux for retail seems to be rising costs, which are increasingly difficult to absorb without passing on to shoppers.

“However, with the right support in place the industry could do better at re-inventing itself for the future. We are therefore keen to progress a retail strategy with Ministers, which will become even more important with further devolution on the cards following Brexit.

“It is abundantly clear that there is more than enough political and economic uncertainty around at the moment. A multi-year Budget Accord with Opposition MSPs could provide a more strategic and less piecemeal approach to devolved policy making. 

“Positive headway is being made towards Scotland having the most competitive business rates regime in the UK, however that goal has yet to be achieved and rates are now at a 20-year high. That means finally scrapping the Scotland-only rates surcharge on medium-sized and larger premises, as advocated by Barclay, and which increasingly sticks out like a sore thumb.

“With retail under pressure, the Budget is an opportunity for Ministers and MSPs to take tangible steps to help retailers as they seek to reinvent themselves for the future. We hope they seize the moment.”

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