Five shops a week close as tax fears stran­gle spend­ing

Scottish Daily Mail - - News - By Michael Black­ley Scot­tish Po­lit­i­cal Edi­tor

FIVE shops a week are shut­ting down in Scot­land amid a slump in spend­ing by cus­tomers.

Data pub­lished yes­ter­day re­veals that the num­ber of empty shops on Scot­land’s high streets has soared faster than in any other part of the UK.

Sep­a­rate fig­ures also showed a slump in spend­ing – with re­tail­ers say­ing that con­fi­dence has been shat­tered by Ni­cola Stur­geon un­veil­ing plans to raise tax rates on those earn­ing as lit­tle as £24,000.

The fig­ures sparked re­newed claims that the SNP’s ‘high tax agenda’ is ‘ham­mer­ing busi­nesses’ and dam­ag­ing the econ­omy.

A re­port pub­lished yes­ter­day by the ac­coun­tancy gi­ant PwC showed that 132 stores shut down in the first half of this year, while only 90 opened.

It means that 42 more units were empty than in the pre­vi­ous six months – a higher fig­ure than in any other re­gion of the UK.

Ris­ing food prices and in­fla­tion have hit con­sumers, with the slow­down in spend­ing hit­ting re­tail­ers hard.

Con­cerns were also raised last night that SNP tax rises – cou­pled by in­creases in in­ter­est rates – could cause fur­ther dam­age.

Ewan MacDon­ald-Rus­sell, head of pol­icy and ex­ter­nal af­fairs at the Scot­tish Re­tail Con­sor­tium (SRC), said: ‘There is much which min­is­ters need to pay close at­ten­tion to ahead of the Scot­tish Bud­get next month.

‘It’s clear con­sumers are feel­ing con­cerned about the econ­omy, and mooted in­come tax rises can’t be help­ing con­sumer con­fi­dence. Our mem­bers be­lieve the Scot­tish Gov­ern­ment should put grow­ing the econ­omy at the heart of their Bud­get.’

The PwC re­port, com­piled by the Lo­cal Data Com­pany, showed that across the en­tire UK, 2,342 stores opened and 2,564 closed – giv­ing a ‘net clo­sure’ fig­ure of 222.

The Scot­tish Re­tail Sales mon­i­tor, pub­lished by KPMG and the SRC yes­ter­day, also showed that Scot­tish sales de­creased by 1 per cent on a like-for-like ba­sis in Oc­to­ber com­pared with the same month last year.

Dean Lock­hart, econ­omy spokesman for the Scot­tish Con­ser­va­tives, said: ‘This is an­other wor­ry­ing in­di­ca­tor of how badly our econ­omy is do­ing un­der the SNP. Their high tax agenda is ham­mer­ing busi­nesses and as a re­sult the num­ber of stores shut­ting for good is on the rise.

‘And with eco­nomic growth in Scot­land lag­ging be­hind the rest of the UK, there’s no sign of things im­prov­ing.

‘If we are to see more stores stay­ing open, the SNP Gov­ern­ment needs to drop their anti-busi­ness poli­cies be­fore even greater dam­age is done.’

The PwC re­port showed that Scot­land’s two big­gest ci­ties were hit hard­est by ris­ing num­bers of va­cant premises.

In Ed­in­burgh, there were 37 store clo­sures and only 23 open­ings, while in Glas­gow 44 shops shut down and 28 opened.

Mark Ad­dley, head of re­struc­tur­ing for PwC in Scot­land, said: ‘What we are see­ing here is stores con­sol­i­dat­ing their high street of­fer­ings from two or three shops in a lo­ca­tion to just one larger pres­ence.’

This month, Miss Stur­geon out­lined four pro­pos­als – all of which in­volved in­creas­ing the higher rate of tax, set at 40p, and the top rate, cur­rently 45p.

In ad­di­tion, three of the op­tions pro­pose a new 21p rate of in­come tax charged on earn­ings of £24,001 and above.

The set of pro­pos­als also in­clude op­tions to in­tro­duce a new 42p rate on earn­ings above £75,000, ris­ing to 50p above £150,000.

On Mon­day, the Scot­tish Daily Mail re­vealed Miss Stur­geon had been sent a let­ter signed by a se­ries of prom­i­nent busi­ness lead­ers warn­ing that any plan to raise

‘Feel­ing con­cerned about the econ­omy’ ‘From two or three stores to just one’

taxes would cause huge dam­age to the econ­omy.

Scot­tish En­gi­neer­ing said grad­u­ates from Eng­land are de­mand­ing higher salaries to work north of the Bor­der be­cause they know they will face higher taxes.

De­spite the grow­ing back­lash, tax pol­icy was not on the agenda when the Scot­tish Gov­ern­ment’s Cab­i­net met in Ed­in­burgh yes­ter­day.

Min­is­ters will de­cide in the com­ing weeks which of the se­ries of tax op­tions they will press ahead with – the fi­nal pro­posal be­ing un­veiled in the Scot­tish Bud­get in the mid­dle of next month.

Cut-price con­fi­dence: Re­tail sales have taken a knock amid con­sumer fears over tax rises

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