SRC ON STAGE ONE APPROVAL OF THE SCOTTISH BUDGET
31 January 2019
Commenting after the Finance Secretary’s fiscal statement today in Parliament and ahead of the expected approval later at Stage 1 of the Scottish Government’s Budget, David Lonsdale, Director of the Scottish Retail Consortium, said:
“Firms will breathe a sigh of relief that MSPs are set to pass a Budget in a timely fashion, during a period when there is already more than enough political uncertainty. Whilst far from perfect, the previously announced moves on business rates, protecting ordinary workers from tax rises, and rejuvenating town centres all should help support retailers and the wider economy.
“Nonetheless, the new announcements of further tax raising powers for local authorities means there is a risk that costs to consumers and businesses will rise. Higher council tax can eat into customers disposable incomes, reducing spending and ultimately growth. Household finances already face headwinds in the months ahead with a rise in the legal minimum employees must put into their pensions. Similarly, introducing extra costs on businesses through further levies is unlikely to lead to sustainable revenue in the long term – especially for retailers grappling with an industry going through fundamental transformation. We will be very interested in how these powers are actually used by town halls across Scotland to support local economies.
“There is plenty more which Ministers can do to support the economy, and we hope the next Budget will finally restore parity with England on the large business rates supplement and properly address the devolved problems encountered with the apprenticeship levy.”
On the workplace parking levy Mr Lonsdale added:
“We would be concerned if this opened the door to levies being applied to parking spaces provided for customers of retailers, in retail parks and shopping malls. Restrictive and costly parking is already seen as a deterrent to shopper footfall. A levy like this could well be seen as yet another tax on firms which they can ill afford, and we understand business rates are already paid on workplace parking spaces anyway.”
On the proposed devolution of empty property rates relief to councils:
“We oppose repatriating control over the poundage rate to local authorities and hope this is not a step in that direction.”
On plans to increase the carrier bag charge to 10p and allow councils to spend a portion of the revenue:
“There has been a massive reduction in the use of single-use carrier bags since the levy was introduced. Allowing councils to siphon off some of the levy revenue is disconcerting and is at odds with the approach taken thus far of allowing retailers to determine how the receipts are spent which our research shows are invariably given to environmental charities and good causes.”
Note: The SRC’s post-Scottish Budget submission was published earlier this month and is available on our website here: https://brc.org.uk/media/378105/post-budget-submission-dec-2018.pdf