UK Budget Increases Pressure on Scotland's Retailers

In a preliminary response to the UK Chancellor’s Autumn Budget, David Lonsdale, Director of the Scottish Retail Consortium, said:

“Scotland’s retailers will face a £190 million increase in their tax bill following the Chancellor’s announcement that employer national insurance contributions are to rise. Combined with increases in the statutory wage rates it’s clear retail businesses will see big rises in the cost of employment, whilst there was little sign of any significant reform to non-domestic rates. Such stark increases will increase the cost of operating a retail business and are unlikely to be absorbed by businesses, at a time when Scottish retail sales are flatlining, making it likely those costs will be passed along to consumers. 

“The update on the economy brought little sunshine. Economic growth is only predicted to rise to two percent at best before easing back, whilst it will be 2029 before inflation returns to beneath the two percent target. That implies little rise in household disposable incomes, further increasing the challenge for retailers looking to grow their businesses.

“Retailers’ will now turn their attention to the Scottish Budget, with the devolved government due to receive substantial sums in Barnett Consequentials. With little fiscal headroom of their own retailers will hope to see action to blunt any rise in non-domestic rates and an end to the mooted introduction of a business rate surtax on grocers. After being thwacked by additional employment costs in the Chancellor’s Budget retailers deserve to be spared any further tax rises by Scotland’s Finance Secretary in December.”