Scottish Budget offers much to encourage businesses - Ewan MacDonald-Russell

Action on costs can make a real difference to hard-pressed high streets and shops, says MacDonald-Russell. Picture: ContributedAction on costs can make a real difference to hard-pressed high streets and shops, says MacDonald-Russell. Picture: Contributed
Action on costs can make a real difference to hard-pressed high streets and shops, says MacDonald-Russell. Picture: Contributed
Even before this week’s astonishing revelations, this was always going to be an unusual Scottish Budget. Held in early February due to the UK General Election, ahead of the Chancellor’s Budget, with only a few weeks to secure agreement from MSPs, it was always going to be difficult to be truly radical.

Yet there was much for business to welcome in the Budget. Confidently presented by finance minister Kate Forbes, who had already successfully saved the uniform business rate earlier in the week, the Budget made tangible progress in reducing the business rates burden for medium-sized and larger firms. The introduction of the intermediate property rate will remove a substantial number of businesses from paying the large business supplement, including 2,000 shops who will save about £5 million annually. While we would have liked ministers to have gone further and are disappointed some larger firms will still pay a higher rate than in England, it would be churlish not to acknowledge this is a very positive step.

When combined with a below-inflation headline poundage increase for the second consecutive year, it’s fair to say the key issues retailers have raised with ministers have been heard and acted on, at least in part. Action on costs can make a real difference to hard-pressed high streets and shops across Scotland – and it’s fair to say Scotland is leading the way right now on lowering this burden. Hopefully legislatures in London, Cardiff, and Stormont will pick up the gauntlet thrown down.

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It was also good to see ordinary workers protected from income tax rises, and indeed to see Scottish income tax rates remain frozen. Retailers are dependent on consumer spending, and consequently any moves to restrict the disposable income of the average Scottish worker would have been problematic. That said, inflation-busting council tax rises seem to be in the pipeline. Further measures to help the transition to a zero-carbon economy are welcome, as are continued investments in infrastructure.

Poor growth remains a concern

While these announcements are encouraging, there is no doubting their necessity. The Scottish Fiscal Commission projections are rarely confused with a ray of sunshine. This year was no exception, the continued prediction that Scottish growth will trundle along below 2 per cent is a reminder of the difficult economic prospects.

That poor growth remains a major concern. Despite endless discussions around increasing productivity, we only see a minor uplift resulting from that discourse. With employment levels high, and wages continuing to rise, it’s concerning we’re not seeing greater economic activity as a result. Brexit, the continued global trade disputes resulting from the US, and a general lack of confidence in the wider economy are all putting dampeners on economic prospects. There are steps Scottish ministers could take to boost this – reforming the Scottish approach to the Apprenticeship Levy and business skills training could pay dividends.

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The onus now moves onto MSPs. The Budget must be passed in the next four weeks, which requires opposition MSPs to work with the Government make a deal. Crucially, business will not want any nasty surprises in the manner of last year’s workplace parking levy. Whatever the merits of the policy, having that measure dropped in without any impact assessment or costings provides a level of uncertainty which makes businesses very nervous. We hope the final Budget won’t have any similarly unpleasant surprises.

Retailers were hoping for certainty, competitiveness, and competitiveness in this year’s Scottish Budget. We were looking for Government to take action to reduce and keep down the burden on our members and their customers at a time of economic volatility. By and large the Government has presented such a Budget. We hope MSPs will move forwards with alacrity to secure a settlement which supports businesses and delivers economic growth.

- Ewan MacDonald-Russell, SRC head of policy