SHOP bosses have called on the Scottish Government to boost consumer spending by ruling out an income tax rise. The Scottish Retail Consortium (SRC) also wants the rates supplement to be brought into line with England in order to reduce the burden on high street businesses.
It says support for consumers and measures to lift private-sector investment should be at the heart of the Scottish Government’s Budget this autumn.
In its 14-page Budget submission, Shaping the Future of Scottish Retail, the SRC highlights the profound changes affecting retail and makes recommendations in key areas affecting consumers and retailers, such as Scottish income tax, council tax, business rates, the apprenticeship levy, and newly devolved taxes.
The submission comes ahead of the expected publication later this autumn of the Scottish Government’s spending and taxation plans for next year.
The retail industry is Scotland’s largest private-sector employer, providing 250,000 jobs. However, official data shows a net decline of 1700 shops and 10,000 retail jobs over the last seven years. SRC director David Lonsdale said: “With consumers and retailers under pressure from higher inflation, rising costs, and anaemic growth, the Scottish Government has to put growing the economy at the very heart of its next Budget.
“First and foremost, consumer spending, a mainstay of our economy, needs supported. Disposable incomes are flat, and there is evidence customers are choosing to spend less on discretionary items as household bills rise and wages moderate.
“The Scottish Government should keep income tax rates down, boosting customer confidence and keeping consumer spending buoyant to support the economy as well as government revenue.
“Retailers, too, will look for support to help them keep down prices and stimulate investment plans. The Barclay Review rightly pointed out that our current business rates regime is inadequate for the task ahead.
“We want to see progress on Barclay’s call for an end to the self-defeating Scotland-only rates surcharge on medium-sized and larger commercial premises, and a moratorium on new or additional rates levies. This would keep down the cost of doing business on our high streets and aid more economically fragile communities. Working with firms to ensure they benefit directly from the Apprenticeship Levy monies and more investment in GDP-enhancing infrastructure are also essential to allow retailers to compete better in the digital economy. Last year’s Budget contained some positive steps forward, with modest changes to the Apprenticeship Levy and Large Business Supplement thresholds.
“The SRC hopes the Finance Secretary will be bolder this year, resisting siren calls to raise income tax and taking a further decisive step towards bringing the rates supplement into line with England.
“With half of VAT receipts being assigned to Holyrood, our politicians have a direct stake in facilitating a flourishing retail industry.”
The SRC says the Scottish Government should consider accelerating implementation of a zero-rate income tax band and recast business rates for the decade ahead to ensure rates better flex with economic conditions.
“It also calls for a moratorium on new or additional rates levies during the remainder of the current parliamentary term.
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