Pro-business approach needed in Scottish Budget to ease burden on retail and hospitality sectors

With the Scottish Budget fast approaching, Stuart McCallum, head of consumer markets in Scotland at RSM UK, outlines what’s needed to support the retail, hospitality and tourism sectors:

“Various layers of regulation, ranging from employment rights to sustainability requirements, are adding to the mounting costs faced by Scottish operators. Many of whom are already on tight margins and will struggle to cover the costs, so will inevitably have to pass them onto the consumer. Businesses will also be hit with imminent increases to employers’ National Insurance contributions, announced in the UK Budget, which risks making the cost of employment unsustainable for some.

“When you add in the crippling cost of business rates, there’s an urgent need for reform to avoid tipping Scottish businesses over the edge. A permanent lowering of the rate would not only ease the burden on retailers and hospitality operators, but offer a competitive advantage against counterparts across the rest of the UK.

“Scotland’s retail and hospitality sectors depend on their workforce and being able to attract the right people. With income tax rates already less favourable than those south of the border, the Scottish government ought to avoid any further hikes, to risk losing more talent. They could even go a step further and increase income tax thresholds in line with inflation, particularly to relieve financial pressures on lower and middle income earners. With increased consumer confidence comes an increase in spending, which the industry would hugely welcome.”

David Lonsdale, Director of the Scottish Retail Consortium, comments: “Economic growth is weak, retail sales are flatlining, and shopper footfall has fallen. This reinforces the need for an unambiguously pro-business Scottish Budget which injects much needed confidence into the economy, prioritises competitive taxes, and which avoids piling extra costs onto retailers who are still reeling from the Chancellor’s increase to employers’ National Insurance contributions.”

Marc Crothall MBE, Chief Executive of The Scottish Tourism Alliance, adds: “Tourism and hospitality businesses are telling us loud and clear they need to see measures that will immediately ease the financial burden on them and that will directly support the sector to grow and be more competitive. The tourism and hospitality sector has felt overlooked in recent years as a key economic driver. We must see a Budget that protects, restores and invests to have long-term success.”