Retail chiefs to demand SNP scrap ‘supermarket tax’

Retail chiefs demand Swinney honours vow to scrap rates levy. Picture: Ian Georgeson

Retail chiefs demand Swinney honours vow to scrap rates levy. Picture: Ian Georgeson

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RETAIL industry leaders will this week demand that the Scottish Government sticks with its promise to scrap a £95 million rates levy on big stores while stepping up investment in struggling town centres.

In a final submission ahead of the publication of the Government’s latest budget plan, the Scottish Retail Consortium (SRC) stresses the importance to the economy of a sector that employs more than 250,000 people. The trade body will outline a string of key dem­ands including ensuring that the business poundage rate rises no faster than elsewhere in the UK while keeping a lid on council tax.

One of the main bones of contention has been the “sup­ermarket tax”, introduced in 2012 to raise some £95m from larger shops selling alcohol and tobacco. Critics claimed it scared off investment and put Scottish retailers at a disadvantage compared to their counterparts south of the Border.

In January, Finance Secretary John Swinney pledged not to renew the levy when it comes to an end in March 2015, and SRC director David Lonsdale said he must stick to that pre-referendum promise.

“We are hoping he is as good as his word,” said Lonsdale. “This week’s Scottish budget provides a valuable opportunity to support the retail industry to further build on its strong record on investment and job creation. We would urge the Scottish Government to prioritise policies in its budget which help keep down the cost of doing business and cost of living, provide for a smarter regulatory environment, and give retailers the tools to grow.”

When the levy was introduced, the SNP said it would help tackle health concerns and stressed that it only affected about 240 stores. But the tax had prompted fears it could lead to higher prices for food and other goods as shops looked to cover costs.

The SRC sent a detailed pre-budget submission earlier this summer laying out 24 policy recommendations across five key areas – business rates, taxation, charges and levies, regulation and infrastructure/skills.

In the document, it des­cribed the large retail levy as a “conspicuous blot on the Scottish Government’s claim to have the most competitive rates regime in the UK”. According to the SRC, the 240 stores affected by the tax will be paying 28 per cent more than equivalent shops in England or Wales over the three-year term.

Publishing its final wish list just days before Thursday’s budget announcement, the SRC said there must be greater levels of investment in town centres and transport infrastructure.

Lonsdale called for a building standards system which “better facilitates retail investment and expansion”. In more specific measures, he urged a review of the “proliferation of government-inspired self-regulation, voluntary agreements and codes of practice”.

The SRC is also working on a submission for the devolution commission chaired by Lord Smith of Kelvin in the wake of the referendum vote. It is due to be presented by the end of this month.

Figures released last month showed Scottish high street sales growing at their quickest pace since January, although the rise came only after continuing price deflation was taken into account.

Total sales increased by 1.3 per cent during August, but without factoring in shop price deflation, they fell by 0.3 per cent compared with a year earlier. Like-for-like sales dec­reased by 1.7 per cent, highlighting the challenges still facing retailers.

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