Retail Industry experts have made a series of recommendations to the Scottish Government ahead of the budget this year.

The Scottish Retail Consortium (SRC) has sent a budget submission to Finance Secretary Shona Robison, outlining a number of suggestions for Scotland’s finance plans for the coming years.

SRC chiefs say retailers are striving to re-invent themselves in the face of changes in shopping habits, weak demand, and rising costs. They are urging the Scottish Government to demonstrate public spending restraint rather than raising taxes, and have said that tax competitiveness should be at the heart of the upcoming Scottish Budget which is expected to be ‘challenging’.

The submission from the leading sectoral trade body comes ahead of the expected publication this autumn of the devolved administration’s £60 billion tax and spending plans for 2025-26.

The SRC’s 12-page paper contains 23 recommendations ranging from ideas for cutting the cost of running government to supporting consumer spending, helping retailers invest, and easing the regulatory pipeline.

David Lonsdale, Director of the Scottish Retail Consortium, urged Ministers to act on the concerns they have expressed.

He said: “We recognise this will be a challenging Budget for Scottish Ministers as they seek to balance a stark fiscal outlook whilst trying to stimulate greater levels of economic growth.

“These are unsettling times too for retailers, despite the industry having shown tremendous fortitude and resilience to come through the tribulations of the past few years of Covid and the cost crunch. 

“Trading conditions remain tough and the only fixed point in a world of flux for the industry seems to be rising costs, which are near impossible to absorb which means they are likely to be passed on to shoppers.”

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The report entitled ‘Realising the Growth Ambition’ highlights the contribution that retail makes to Scotland each year, despite footfall declining by 2.3%, and sales falling by 1.4% in the last 12 months. Around 228,000 Scots work in retail across 22,500 shops.

The report also shows that £558m is paid in tax by Scottish retail each year while £31.2m was added to stores’ rates bills this year – the largest hike since devolution.

As well as public spending restraint the paper recommends Injecting certainty into fiscal decisions through a 2-year Budget Accord with Opposition MSPs leading up to the next Holyrood election.

It also suggests ruling out increases in income tax rates to bolster consumer spending.

The SRC’s key recommendations to the government to implement in the Scottish Budget include:

  • Injecting certainty into fiscal decisions through a 2-year Budget Accord with Opposition MSPs leading up to the next Holyrood election
  • The bulk of any gap in Scottish Government finances tackled by spending restraint rather than tax rises which could stymie economic recovery
  • Bolstering consumer spending by ruling out increases in income tax rates
  • Shelving the misbegotten mooted business rate surtax on larger grocery stores
  • Restoring the level playing field with England for firms paying the Higher Property Rate
  • Freezing the Basic, Intermediate and Higher Property Rates for 2025-26
  • Ruling out making licenses to trade and eligibility for business rates reliefs conditional on payment of the ‘real’ living wage

Mr Lonsdale said the SRC wants Scotland to be the best place in the UK to grow a retail business.

He added: “To provide greater certainty, a two-year Budget Accord with Opposition MSPs could provide a more strategic and less piecemeal approach to devolved policy making.                                                                        

“Stimulating greater levels of private sector investment is crucial to lifting Scotland’s measly rate of economic growth and living standards and generating the tax revenues to support public services and alleviate poverty. Increasing taxes could exacerbate the problem by further hampering growth. That’s why we are calling for a mixture of spending retrenchment, forestalling rises in taxation, competitive business taxes and regulatory easements, as a means of proving a path to greater prosperity and towards making Scotland the best place in the UK to grow a retail business.”

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

The paper was finished with a list that points out a range of initiatives by the Scottish Government that could negatively affect retailers. The list included the deposit return scheme, the proposed levy on disposable cups, personal licenses for selling fireworks, restrictions on advertising and promoting items like alcohol and vapes, and more.

The full paper can be viewed here