In a kick in the teeth for convenience stores, the Scottish Budget has failed to extend the business rates support of 40% offered to hospitality venues to retail outlets.
Finance Secretary Shona Robison announced that the Basic Property Rate would remain at 49.8p. In addition to the Small Business Bonus Scheme, which will be protected in 2025, the Scottish Government claimed that the freeze to the Basic Property Rate would protect over 200,000 small properties.
The government also announced an extra £3m in funding for Police Scotland to tackle retail crime.
Meanwhile, larger food stores could breathe a sigh of relief as the Budget ditched the mooted business rate surtax on grocery retailers.
While the Scottish Grocers’ Federation (SGF) welcomed the rates freeze, it described the lack of rate relief for retailers as “another damaging blow” and urged the Scottish Government to replicate the 40% relief announced for retail, hospitality & leisure businesses south of the border in the UK Budget.
Chief Exec, Dr Pete Cheema said: “We are very disappointed that the Scottish Government has failed to recognise the need to support local retail and small businesses across Scotland. Convenience stores provide an essential local service for their communities, and they have a great potential to drive growth across the Scottish Economy. For those reasons, while we welcome the freeze on the basic rate, we are calling on the Finance Secretary to extend the same support on business rates to include retail. To match what is being delivered to both retail and hospitality in England but only hospitality in Scotland.”
He added that the Police Scotland funding did not go far enough. “While we welcome the additional direct support for Police Scotland, to get to grips with the devastating impact of retail crime, £3 million will only go so far,” he said. “Crime is the biggest issue facing our sector. Many stores are facing endemic levels of crime. Not just theft, but violence and abuse on a regular basis. Much more will be needed if we hope to reverse that trend before matters get even worse for staff and businesses. The announcement today may be too little too late and will only go so far to alleviate the pressure on businesses and the Scottish justice system.”
The Federation of Small Businesses (FSB) in Scotland raised similar concerns.
FSB Scotland Policy Chair, Andrew McRae said: “We are pleased the lifeline Small Business Bonus Scheme has been protected and will continue to offer vital support to tens of thousands of small businesses up and down the country. The freezing of the basic property rate, or ‘poundage’, is also welcome.
“However, the refusal to extend the same rates relief to our small retailers and leisure providers [as Scottish hospitality venues] is a bitter pill to swallow.
“The pressures they are facing are exactly the same as those in England and Wales, where relief has continued to be available since July 2022 – the last time such relief was offered in Scotland.
“As a result, many retailers will face yet more difficult decisions in the months ahead as they look to protect the future of their businesses and employees.”
McRae added: “The extra investment in tackling retail crime through a new pilot initiative is a positive step. However, given the scale of the issue, and that the hoped-for cushion in the form of rates relief has failed to be extended yet again, it will offer little comfort to small Scottish retailers this December.”
The Scottish Retail Consortium expressed its relief at the Scottish Government’s decision to drop the grocery surtax.
David Lonsdale, Director of the Scottish Retail Consortium, said: “Removing this surtax lifts a damaging cloud from the investment horizon and allows grocers to more favourably assess Scotland as a nation with investment potential. Scottish Ministers promised to consult widely and fairly and deserve praise for clearly listening to our representations and ditching this grocery surtax.”
He added: “Retail crime has become a scourge of communities across Scotland and we know that soaring levels of shoplifting is the main factor behind abuse and threats towards shop workers. The vital funding promised by the Finance Secretary is positive and must be used effectively to tackle persistent offenders and organised crime. Retailers are already taking action to make shops safer for customers and colleagues; they’ll warmly welcome this further support from the Scottish Government.”
