According to the alliance, “the cost of doing business in Scotland is spiralling and the near-term economic outlook is weak.”
With the business rate already at a 23-year high, Scottish businesses are taking a pounding and this is being passed on to consumers.
Help ease the burden
Ahead of the Scottish Government’s Budget, organisations representing a broad section of Scottish industry and commerce have sent a letter to Swinney, asking him to help “firms with the costs crisis [and] help ease the burden at this difficult time.”
The Budget will be unveiled on 15 December and is expected to set the business rate and associated reliefs and thresholds for the 2023-24 financial year.
In the UK Government’s Autumn Statement, Chancellor of the Exchequer Jeremy Hunt confirmed the business rate in England would not increase next April. The coalition hopes that “at the very least, Scottish Ministers follow suit and similarly freeze the headline business rate poundage in the coming financial year.”
It adds, “after two turbulent years of the pandemic, the fact is trading conditions remain challenging.”
Keep prices down for customers
The business bodies concede that “headway has been made in recent years on broader aspects of rates reform, including more frequent revaluations; the retention of the uniform business rate; and the pledge to restore parity on the higher property rate with England, which should benefit 12,000 commercial premises here in Scotland.”
The letter also acknowledges “the Scottish Government – like business – is facing its own costs and inflationary pressures at the present time.”
However, it is imploring the Government to refrain from increasing the poundage rate in the coming financial year, which would “ensure that no more Scottish commercial premises [than those that currently do] pay a higher business rate than applied down south.”
This, ultimately, will help them “keep down prices for customers … would support business investment and retain Scotland’s competitiveness for most ratepayers.”
It adds the alliance has “a range of ideas on how Scotland’s rates system could be improved” beyond the rate freeze.
The joint letter was signed by Scottish Bakers CEO Alasdair Smith and FDF Scotland’s CEO David Thomson, among others.
Dear Deputy First Minister
We are writing jointly ahead of the Scottish Budget to ask that you do not increase the poundage rate in the coming financial year.
We fully recognise that the Scottish Government, like business, is facing its own costs and inflationary pressures at the present time. We note too that headway has been made in recent years on broader aspects of rates reform including more frequent revaluations, the retention of the uniform business rate, and the pledge to restore parity on the higher property rate with England which should benefit 12,000 commercial premises here in Scotland.
Yet, after two turbulent years of the pandemic the fact is trading conditions remain challenging, the cost of doing business is spiralling, and the near-term economic outlook is weak. Given the decision taken in the UK Autumn Statement we ask that at the very least Scottish Ministers follow suit and similarly freeze the headline business rate poundage in the coming financial year. This would aid firms with the costs crisis, help them keep down prices for customers, and ensure that no more Scottish commercial premises than currently do end up paying a higher business rate than applies down south. It would support business investment and retain Scotland’s competitiveness for most ratepayers.
Our organisations have a range of ideas on how Scotland’s rates system could be improved. However, we collectively believe this practical measure to at least freeze the business rate requires to be taken in your upcoming Scottish Budget, which would be a positive step applicable to all commercial premises and help ease the burden at this difficult time.
David Lonsdale, director, Scottish Retail Consortium
Sandy Begbie CBE, CEO, Scottish Financial Enterprise
Tracy Black, director, CBI Scotland
Dr Liz Cameron CBE, CEO, Scottish Chambers of Commerce
Phil Clapp, CEO, UK Cinema Association
Marc Crothall MBE, CEO, Scottish Tourism Alliance
Huw Edwards, CEO, ukactive
Mark Kent, CEO, Scotch Whisky Association
Sarah-Jane Laing, CEO, Scottish Land & Estates
Warrick Malcolm, director, ADS Scotland
Catherine McWilliam, Nations director, IoD Scotland
David Melhuish, director, Scottish Property Federation
Gordon Nelson, Scotland director, Federation of Master Builders
Garry Richmond, director, Print Scotland
Paul Sheerin, CEO, Scottish Engineering
Alasdair Smith, CEO, Scottish Bakers
Colin Smith, CEO, Scottish Wholesale Association
David Thomson, CEO, Food & Drink Federation (FDF) Scotland
Leon Thompson, executive director, UKHospitality Scotland