High street set for rates overhaul
Mackay hints at move to ease burden as Chancellor aims to kick-start growth
SCOTLAND’S high streets could be set for a boost after the Finance Secretary hinted at new rates relief.
Derek Mackay admitted he is ‘sympathetic’ to calls for an overhaul of the business rates system.
Firms across Scotland have warned of staffing cuts and even closures due to the growing pressures – including non-domestic rate rises, tax and competition.
In his Budget today, Chancellor Philip Hammond will announce a series of measures to help kick-start growth on the high street, with £900million for business rates relief and £650million pledged to help retailers and improve transport links.
This would result in extra funding given to Scotland in Barnett consequentials. It is understood billions of pounds will be sent north of the Border with Mr Hammond expected to announce:
A £30billion upgrade for England’s motorways and other major routes paid for by road tax;
Nearly £1billion extra for social care and £500million extra for the Armed Forces;
A £60million pledge to plant more trees to help preserve the country’s environment;
Plans to move people trapped on ‘payday loans’ to zero-interest Government loans.
Scotland is already set to gain £2billion in Barnett consequentials following a £20billion boost for the NHS south of the Border. The Scottish Government said that money will be handed directly to health services.
Mr Mackay is facing calls to follow Westminster’s lead in his Scottish Budget in December in a bid to boost Scotland’s economy – and help struggling firms north of the Border.
Speaking to the BBC yesterday, he said: ‘I am sympathetic around business rates because I want Scotland to be competitive and I want us to have a competitive advantage.
‘We’ve already put in place a number of measures to support businesses on domestic rates, and I will look at further measures following the UK government’s Budget.’
The Scottish Daily Mail’s Save the High Streets campaign has urged ministers to ease pressure on struggling firms.
Last year, the first revaluation of business rates since 2010 led to thousands of firms – including shops, pubs, restaurants, cafes and hotels – facing bill hikes of up to 400 per cent.
Following a massive backlash, the Government was forced to bring in a cap for hospitality businesses and certain other sectors.
However, Mr Mackay has faced continued calls to overhaul the system, with the Scottish Retail Consortium calling for the large business supplement to be brought into line with the rest of the UK.
Scottish Tory finance spokesman Murdo Fraser said: ‘The Scottish Budget should include support for our high streets. Derek Mackay must follow the Chancellor’s lead and announce measures to help retailers compete with the massive rise in online shopping.
‘The Scottish Government also needs to make the overall tax regime more competitive. For too long, SNP policy in this area has acted as a deterrent to jobs and investment.’
Mr Hammond was handed a windfall of around £13billion due to betterthan-expected borrowing figures, easing some of the pressure to put up taxes.
‘Announce measures to help retailers’
THANKS to the usual leaks and advance briefings, it’s clear there will be plenty of giveaways to cheer in today’s Budget.
Indeed, if reports of recent days are anything to go by, Philip Hammond’s reputation as a careful bean counter may need to be re-evaluated.
Nearly a billion more for social care… £29billion over five years for roads… £250million for rural broadband…
The freeze on fuel duty will continue and there will be more cash for council houses. Most welcome of all, in a victory for this newspaper’s campaign, the Chancellor will throw half a million struggling high street retailers a £1.5billion lifeline, in the form of business rates relief.
That’s not to mention the biggest spending commitment by far, a £20billion annual boost for the NHS, including at least £2billion a year for mental health. If this windfall goes hand-in-hand with much-needed reform, it could transform the health service.
Individually, each outlay can be justified on its own merits. Collectively, they may win the Tories a poll boost and Mr Hammond applause from Tory backbenchers, who – to put it mildly – haven’t always been his most enthusiastic cheerleaders.
Yet while the spending side of the ledger is well documented, what is far from clear is exactly how all this will be paid for. Yes, the public finances are in a healthier state than expected. Record employment and higher than expected tax revenues – a tribute to the strength of the economy – might hand him an extra £13billion a year.
But will that be enough? Or will he be giving with one hand, taking with the other and increasing the overall tax burden, which is already at a 30-year high? We hope not.
For all the talk of ending austerity, what Mr Hammond emphatically must not do is lose sight of that core Tory principle: fiscal responsibility. The public finances are still covered in red ink. The national debt, which stands at a terrifying £1.79trillion, costs £48billion a year just to service.
Turning on the spending taps now, paid for by reckless borrowing or higher taxes, would be a deeply imprudent course.
But worse than that, it would hand a huge victory to Labour and John McDonnell as the Shadow Chancellor seeks to justify a monstrous £108billion spending binge which would send Britain to rack and ruin.