Scottish business groups call for shop rates discount

More than a dozen business organisations have called on the Scottish government to provide a business rate discount for all shops in the next financial year.

The call from retailers and a trade union comes ahead of the Scottish Budget, due to be unveiled next month.

They argue the retail industry is still "struggling in the shadow" of Covid.

The Scottish government said it acknowledged the "tough trading conditions" the sector was facing.

Last February, Finance Secretary Kate Forbes announced that Scottish retail, hospitality, leisure and aviation businesses would not have to pay non-domestic rates throughout the current financial year.

The retail industry in Scotland employs 230,000 people and normally accounts for more than a fifth of business rates.

David Lonsdale, director of the Scottish Retail Consortium, said it his members had not fully recovered from the pandemic.

He told BBC Radio's Good Morning Scotland programme: "Retail sales/ shopper footfall is not back up to where it was, in fact we are hovering around 80/85% on both those indicators.

"We think, and we believe, that if we want to maintain jobs in the coming financial year, if we want to maintain the health and vitality of our retail stores and destinations then we need another discount of some degree in the coming financial year."

A total of 13 organisations have collectively written to Ms Forbes with their appeal. They include the Scottish Retail Consortium, Scottish Grocers Federation, Music Industries Association, Federation of Independent Retailers and the trade union, Usdaw.

In the letter, the organisations said they wished to reduce the "burden" on all retail premises.

'Tangible headway'

It read: "We fully recognise the support your government has provided to the industry during the pandemic, including the business rates waiver.

"It came against a backdrop in which tangible headway has been made in recent years on broader aspects of rates reform - more regular revaluations, the retention of the uniform business rate, and the pledge to restore parity on the higher property rate with England - along with a consistent commitment to keep the headline poundage below the rest of the UK.

"Yet 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."

It continued: "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."

The letter added that a further discount to business rates in 2022-23 would "reflect the market reality and provide a bridge to the next revaluation in 2023".

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 9 December."