By Marcus Leach
The Scottish Government has missed an opportunity to support the country's beleaguered retailers as it has failed to opt for a business rates increase below the 5.6 per cent being imposed in England.
Despite clear evidence that Scottish retailers are suffering more than those in other parts of the UK - Scottish retail sales have been worse than the UK figure since Easter - the Finance Secretary, John Swinney, confirmed this afternoon (Thursday) that Scottish business rates will rise in line with September's Retail Price Index. That was a 20 year high of 5.6 per cent.
It will see the retail sector hit by estimated additional costs of more than £30 million next year, hampering its ability to invest and create jobs.
The increase comes into effect in April 2012, by which time the Bank of England's central forecast expects inflation to be nearer three per cent.
On top of this huge extra business rates burden, the Scottish Government is also pressing ahead with a discriminatory supermarket tax which will add another £30 million to the rates bills of large grocery stores next year, and more in subsequent years.
The Finance Secretary's other announcements, to continue the relief scheme to small retailers and to allow others above the small business threshold to defer their 5.6 per cent increase over a three-year period, are welcome but the Scottish Retail Consortium does not believe these measures do enough to offset the overall cost increase for the retail sector.
"To follow England in imposing the maximum possible increase is disappointing. The Scottish Government has missed an opportunity to tailor its decision for Scotland's particularly tough consumer climate and give an added stimulus to much-needed growth," Scottish Retail Consortium Director, Ian Shearer, said.
"Scottish retail sales are actually going backwards yet retailers, who already pay around a quarter of all business rates, now face another massive increase despite the likelihood that inflation will fall in the New Year.
"The reliefs for small shops and proposed deferment scheme are welcome but retailers large and small want to grow their businesses, boost town centres and create jobs. The Government's unwillingness to limit the overall increase, while also pushing ahead with its discriminatory supermarket tax, makes recovery harder to achieve."
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