Scottish budget omits retail sector for rates relief

Scottish finance secretary Shona Robison announced business rates relief for pubs and restaurants in the budget presented on Wednesday, passing over the retail sector.

Terming this a ‘damaging blow’, the Scottish Grocers Federation (SGF) has urged the government to extend the business rates support to retail as well, replicating the 40 per cent relief announced for retail, hospitality, and leisure businesses south of the border, in the UK Budget.

SGF also welcomed a direct, although minor, uplift in police resource to target retail crime.

Robison told members in the Scottish Parliament that support available through the Small Business Bonus Scheme would be protected in 2025. Poundage will also be frozen for another year and 40 per cent rates relief announced in the UK budget will be passed on to the Scottish hospitality only, leaving key local retailers without the same level of additional support this year.

On retail crime, announcements in the budget were only a partial win for Scottish retailers, SGF noted, while welcoming the direct additional funding of £3 million for Police Scotland to tackle the growing issue of retail crime. The trade body said much more will be needed to have a meaningful long-term impact.

“We are very disappointed that the Scottish government has failed to recognise the need to support local retail and small businesses across Scotland,” SGF chief executive Pete Cheema said.

“Convenience stores provide an essential local service for their communities, and they have a great potential to drive growth across the Scottish economy. For those reasons, while we welcome the freeze on the basic rate, we are calling on the finance secretary to extend the same support on business rates to include retail. To match what is being delivered to both retail and hospitality in England but only hospitality in Scotland.

“While we welcome the additional direct support for Police Scotland, to get to grips with the devastating impact of retail crime, £3 million will only go so far. Crime is the biggest issue facing our sector. Many stores are facing endemic levels of crime. Not just theft, but violence and abuse on a regular basis. Much more will be needed if we hope to reverse that trend before matters get even worse for staff and businesses. The announcement today may be too little too late and will only go so far to alleviate the pressure on businesses and the Scottish justice system.”

‘Headline-grabbing’

Meanwhile, the SLTA (Scottish Licensed Trade Association), has slammed the rates relief proposal as ‘headline-grabbing’, saying it will do little to stop closures and significant job losses in the sector.

Paul Waterson, SLTA press spokesperson, said he was extremely disappointed with Robinson’s announcement of very limited support for the licensed hospitality sector.

“Wide-ranging support on business rates was our big ask from the Scottish government, especially after Westminster’s budget which raised the level of employer National Insurance rates, cut the payment threshold from £9,000 to £5,000, and an above-inflation rise of 6.7 per cent to the minimum wage. Together this means, on average, operators’ outgoings will increase by between £2,000 and £2,500 per employee,” Waterson said.

“Quite simply the whole trade needed help to offset these costs. They have not listened to us and this announcement will only help those paying the basic property rate, which is those with a rateable value up to and including £51,000.”

Waterson, describing this level of support as “unfair and discriminatory”, added: “Yes, we are delighted for those getting the relief but because we are rated on turnover and profit is not taken into account, many relatively small businesses in our trade are above the £51,000 threshold. This means many licensed premises above the cut-off point are now wondering if they will survive.”

Waterson said the SLTA continues to call for a review of the commercial rating system, where in Scotland “licensed hospitality businesses are disproportionately burdened with commercial rates charges in comparison with other business sectors in Scotland and, in comparison, with licensed hospitality businesses in other parts of the UK”.

In partnership with the Scottish Beer and Pub Association, the Scottish Licensed Trade Association has already called for the introduction of a permanent non-domestic rates licensed hospitality-specific multiplier of 35p to support pubs and bars, encourage investment, help revitalise high streets, and rebalance the disproportionate business rates burden.

Waterson added: “This would end the sticking-plaster policies that only provide temporary relief for some businesses that bring life to our communities and our city and town centres, where we are seen as the saviour of the high street, and provide one of the largest ‘tourist attractions’ for both domestic and foreign visitors to Scotland with over 75 per cent of foreign visitors and 68 per cent of domestic visitors visiting our pubs, bars and restaurants during their stay.”