Industry bodies call for business rates discount for retailers

Industry bodies are urging the finance secretary to introduce a business rates discount for all retail premises for the coming financial year as shops struggle in the “shadow” of Covid.

Thirteen organisations, including trade unions and business representative groups, have jointly written to Kate Forbes ahead of next month’s draft Scottish budget calling for a further discount to business rates in 2022-23.

They warn that a return to full 100% business rates from April next year will be “insurmountable” for many shops.

The organisations said that the retail industry in Scotland employs 230,000 people and traditionally accounts for more than a fifth of business rates.

Signatories to the letter include the Scottish Retail Consortium, the Federation of Independent Retailers, The Horticultural Trades Association and the Scottish Grocers Federation.

In the letter, they recognise the support the Scottish Government has provided to the industry during the pandemic, including the business rates waiver.

However they state: “For all the progress in pushing back against Covid, it’s clear the retail industry is still struggling in its shadow.

“We are almost two-thirds of the way through the current financial year and store sales and shopper footfall in Scotland have yet to return to pre-pandemic levels, whilst shop vacancies have climbed to a six year high.

“As Holyrood’s Finance and Public Administration Committee noted this month, many retailers have incurred significant debt through the crisis including Covid loans and tax deferrals.

“As the guardrails of taxpayer support are gradually withdrawn, retailers are ready to contribute their fair share. However, further assistance will be required in the transition.

“A return to full 100% business rates from April, which were at an onerous 21-year high prior to the pandemic, will be insurmountable for many shops.”

Other signatories include Usdaw, the Booksellers Association of the UK & Ireland and the Scottish Property Federation.

David Lonsdale, director of the Scottish Retail Consortium, said: “This is an unequivocal statement from a formidable alliance of Scottish industry and trade unions that urgent action is required to support the health and recovery of the retail sector.

“Hopefully, the finance secretary will take heed and act in her budget next month to reduce business rates for all retail premises.”

Scottish Conservative finance and economy spokeswoman Liz Smith said economic recovery should now be the “number one priority” for the SNP Government.

She said: “Industries such as retail and hospitality have been among the hardest hit during the pandemic – and though there have been some recent signs of recovery, there is still a long way to go.

“A discount to business rates will give physical retailers and businesses the support they need to recover from the effects of the pandemic, while helping to revitalise our high streets and town centres.”

A Scottish Government spokesman said: “We acknowledge the tough trading conditions Scotland’s retail industry has been dealing with, which is why the Scottish Government has provided more than £4.4bn to help businesses cope with the impact of Covid-19.

“The Scottish Government is currently providing a generous non-domestic rates regime that supports a total package of reliefs worth almost £1.5bn, including an extension to the relief for the retail, hospitality, leisure and aviation sectors throughout 2021-22, which will save ratepayers an estimated £752m this financial year.

“Further details on rates for the next financial year will be outlined as part of the draft budget on December 9.”