Around 8,000 jobs could be in jeopardy in Scotland if the country’s government’s proposed levy on retailers is introduced, representatives of the industry have warned.
A draft Budget put forward by John Swinney, the Scottish Finance Secretary, is due to be voted on by Scottish MPs over the next few weeks. The Budget is expected to include a levy on stores with a rateable value of over GBP750,000 (US$1.18bn).
As a result, a new body, the Competitive Scotland Campaign Group, is to be formed among business leaders to fight the tax plans. Members include CBI Scotland, the Scottish Chambers of Commerce, the Scottish Retail Consortium (SRC), the Institute of Directors and the Scottish Property Federation.
The first gathering took place yesterday (12 January) ahead of the Scottish Retail Consortium’s (SRC’s) Annual Parliamentary Reception.
The SRC warned that large retailers already pay around a quarter of all business rates across Scotland, which it said was “the highest proportion of any sector”.
In 2009, the retail sector contributed around GBP24bn to the Scottish economy, accounting for 11% of the nation’s GDP. It employs nearly 250,000 people, equivalent to one in nine of the Scottish workforce, SRC added.
And with the big four supermarkets understood to be opening around twenty new stores in Scotland over the next two years, this could result in around 8,000 new jobs, the SRC claimed.
The consortium’s director, Fiona Moriarty, said: “Opposition politicians are showing they understand the importance of the retail sector to the future success of the Scottish economy. It’s a shame the Scottish Government seems so determined to continue on a path that risks jeopardising jobs growth and investment,” Moriarty said.
At Sainsbury’s results conference yesterday, CEO Justin King yesterday warned Scotland that potential supermarket taxes would cost jobs. He warned that the proposed tax, which will seek an additional GBP30m in business rates from large retailers, may prevent retailers from opening stores in the country.
The three main Opposition parties at Holyrood – Labour, Conservatives and Liberal Democrats – have all said they will vote against the measure on 26 January, according to the Times.
CBI Scotland’s David Lonsdale welcomed the Scottish Conservatives’ commitment.
“Our members are greatly concerned that this new tax will make Scotland a less attractive place for retailers to invest and create jobs, and that other sectors could be similarly targeted in subsequent budgets from the devolved government,” Lonsdale said. “This announcement from the Conservatives is therefore very encouraging and welcome.”
Speaking ahead of a meeting today with the Scottish Retailers’ Forum, Finance Secretary John Swinney said it will be “the largest, most profitable retailers who will pay extra and large stores, overwhelmingly located in out of town parks”.
“In our city centres only a comparatively small number of businesses are affected. For example, just 17 out of 1,200 properties registered in Glasgow’s three main shopping streets would be required to pay. This is all in the context of the Scottish Government’s unparalleled package of business rates relief.”
He added: “The revenue raised is a drop in the ocean when considering the UK Government’s VAT increase, which is expected to cost Scotland around GBP1bn, meaning our retailers have had to decide whether to absorb costs themselves or pass on to customers.”