Growing crisis on the high street as higher tax hits consumer spending

SCOTLAND’S high streets are set for a disappointing year as experts warn soaring council tax bills will see families reduce their spending.

Sales grew slightly last month, but only because of ‘positive distortion’ caused by Easter, figures show.

The increase of only 0.8 per cent was driven by a surge in food shopping, with the sale of non-food items including clothing, footwear and furniture plummeting. The Scottish Retail Sales Monitor, published by the Scottish Retail Consortium (SRC) and KPMG, indicates that there was a 4 per cent drop in the sale of non-food items.

The SRC said while March had been a tough month for retailers, ‘it is unlikely that trading conditions’ will improve much in 018. It said a weak economy, along with fears over rising council tax bills, means families are less likely to spend – with many workers in the retail sector concerned about their futures.

David Lonsdale, director of the SRC, said: ‘The underlying weakness in consumer spending persists and household disposable incomes face a number of headwinds, with higher council tax bills landing on doormats and increased pension contributions trebling for some.’

Council tax bills have risen by 3 per cent, with councils forced to seek additional funds amid fears of cuts following the SNP Budget.

The change comes as new income tax rates and bands come into force north of the Border, with people earning over £ 6,000 paying more than their counterparts in England, and those earning more than £33,000 seeing their pay packets shrink.

Scottish Conservative economy spokesman Dean Lockhart said: ‘These disappointing retail figures should set off serious alarm bells for the SNP, whose mismanagement will continue to harm the economy for some time.’

‘SNP harming the economy’