This is after a year that saw the sector hit with the scrapping of tax-free shopping for international visitors and with rises in employers’ national insurance contributions and corporation tax in the pipeline.
This is unfortunate as many retailers are left with a legacy of extra debts and loans from the pandemic, which will take time to pay down, and at a time when many are affected by significant cost spikes and bottlenecks in their supply chains.
As such, Scottish retailers will be keeping a close eye on the increased block grant funding for Holyrood. Hopefully, the Scottish Finance Secretary can be more ambitious on business rates than Mr Sunak.
The economic picture remains mixed. Strong growth this year and next will be very welcome, albeit that’s compared to awful figures over the first 18 months of the pandemic. Of concern is the likelihood of inflation rising to 4 per cent. That will hit consumers and businesses alike.
Beyond that, retailers will want to see the impact of the myriad of tax and welfare benefit changes on consumers. After all, consumer spending is the mainstay of our economy and Scottish retail sales remain a tenth below pre-pandemic levels.
Unannounced by Mr Sunak but contained in the Budget detail is a pledge to consult on a new digital tax. The full implications of this for both shoppers and businesses remains unclear. A cautious approach is therefore required.
The Chancellor missed an opportunity to reform the apprenticeship levy, which isn’t working for levy-payers in Scotland. He also missed the chance to exempt the new charge being introduced next July on drinks bottles and cans in the form of a deposit return scheme (DRS).
Exempting DRS deposits from VAT would keep down shop prices, reduce administrative and cash flow problems for retailers.
The economic legacy of Covid will be felt for years to come. UK and Scottish ministers need to be mindful of the fragile condition of many businesses right now, and reflect on whether further fiscal and regulatory measures are sensible whilst firms recover.
David Lonsdale, director, Scottish Retail Consortium