The Scottish Government has been urged to provide rates relief from business rates for retailers as the build-up to next week's Budget gathers pace.
Nine business groups have written to Finance Secretary Shona Robison to call for the support in the next financial year after the UK Government provided temporary and capped relief to the retail, hospitality, and leisure sectors in England in the Westminster Budget last month.
It comes amid mounting concern in the retail sector over the increase in employer national insurance contributions announced by Chancellor Rachel Reeves at the Budget. The industry has warned the increase will cost retailers in Scotland £190 million each year, starting in April, and lead to job cuts, business investment plans being scrapped, and prices rising at the till.
It is hoped Ms Robison will have some leeway to provide support for business as a result of an additional £3.4 billion of funding for Scotland via Barnett consequentials announced at the Budget.
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The Scottish Budget is due to be announced in Holyrood on Wednesday December 4.
The letter states: “We welcome the First Minister’s support for boosting economic growth and the pledge in his Programme for Government to create the right conditions for business investment.
“Given this, we write jointly to encourage you in your Scottish Budget on 4 December to ensure that retailers in Scotland benefit from temporary business rates relief. We understand that Barnett consequential monies have been forthcoming as a result of the decision of the UK Government on retail, hospitality, and leisure relief in England.
“This is a challenging time for retailers in Scotland. Retail sales have flatlined for the past five months, the growth in shopper footfall is meagre at best, yet statutory costs are spiralling.
“The latest example of the latter is the Chancellor’s decision to increase employer’s national insurance contributions. This will disproportionately impact retail as it is the country’s largest private sector employer and because retail employs large numbers of people in entry-level and part-time roles. The sheer scale of the tax hike and short timeframe for implementation has fundamentally changed the outlook, adding £190m in extra costs onto Scotland’s retailers each year.
“Providing rates relief would help smaller stores here in Scotland alleviate the UK Government’s tax hike as well as support our hard-pressed retail destinations. Such a decision would be warmly welcomed. It would also send a positive signal at a time when the UK administration has said it recognises the rates burden on retail is disproportionate and envisages introducing a permanent business rates reduction for the sector from Spring 2026 onwards.”
The letter to the Finance Secretary was signed by David Lonsdale, director of the Scottish Retail Consortium; James Barnes, chairman of The Horticultural Trades Association; Lesley Cameron, chief executive, Scottish Bakers; Pete Cheema, chief executive of the Scottish Grocers’ Federation; Andrew Goodacre, chief executive, British Independent Retailers Association; Meryl Halls, managing director, Booksellers Association of the UK & Ireland; Caroline Larissey, chief executive, National Hair & Beauty Federation; Shahid Razzaq, national president, The Federation of Independent Retailers; and Anthony Short, executive director, Music Industries Association.
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