Five shops a week close as tax fears strangle spending
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