HE COULD HAVE DONE SO MUCH MORE FOR BUSINESS

As the scottish Budget loomed, our requests were pretty modest. We wanted to see plans for a local rates levy scrapped, movement towards restoring parity with England on business rates, ordinary workers protected from tax rises, and moves to improve productivity.

It was a package of affordable measures – especially as the combination of business rates changes in England and extra ‘Barnett Consequentials’ money from the UK Government for town centres will have netted Mr Mackay the best part of an extra £50million next year.

Now it is clear that Mr Mackay still has some way to go to deliver on his grand promises of a globally competitive business environment.

The economic backdrop for scottish retail could not have been more stark. All is not well in scotland’s shopping destinations. Tough trading conditions, changing shopping habits, and high taxes and more regulations are making life challenging. Household names have stumbled or tumbled this year, an annus horribilis for the industry.

Retail and the state of high streets has leapt up the political agenda. Recent statistics underscore how big the challenge is; 5,700 scottish retail jobs have disappeared in two years, store numbers are down 4 per cent over three years, steeper than elsewhere in the UK.

shop vacancies tell a similar story. They are at a seven-year high and the sRCKPMG retail sales monitor has barely grown over the past 12 months.

The good news is that there has rarely been a better time to be a shopper in terms of the choice, convenience and prices on offer. The flip side is these are testing times for retailers.

We already had cause to look forward to the Budget after ministers revealed that plans for a new local rates levy on firms operating out of town were to be scrapped.

In fairness to ministers, the plans were originally part of the recommendations of the Barclay Rates Review so they must have felt a duty to bring forward the proposal.

HOWEVER, quite rightly they have looked at the evidence of how harmful such a scheme would be for businesses of all types, and listened to the view of the scottish business community that this plan was a bogey.

The Finance secretary’s confirmation to parliament that this pernicious proposal is now no more will be hugely welcomed by the business community.

And with scottish retailers feeling the pinch after a difficult year, we are glad the Finance secretary has been more Christmas Elf than Mr scrooge.

The decision to set the most competitive headline business rate poundage in the UK is welcome, as the burden of rates remains onerous.

This is particularly the case for retailers, who account for 22 per cent of all rates paid.

since 2010-11 the headline poundage tax rate has jumped from 40.7 per cent to 48 per cent now. For the 22,000 commercial premises (of which 5,128 are retail) subject to the large business rates supplement, the comparable figures are 41.4 per cent and 50.6 per cent.

so it’s right that action is being taken to keep down the headline poundage rate in the coming year, although the minister could have gone further.

Nonetheless, he has acknowledged our concerns by striking a rate which is a touch below that in England. That will save retailers £2million next year.

As important is the commitment in the future not to go above the Consumer Price Index. That will make a big difference to businesses who already had that certainty in England, but can feel confident their rates bills should not skyrocket in the next few years.

similarly, while the headline poundage rate is set to be lower in scotland in the coming year, the 22,000 businesses of all types operating from medium-sized and larger premises will continue to face a higher large firms’ supplement than in England.

The Barclay Rates Review described this scotland-only surcharge as ‘damaging perceptions’ of scotland.

For the 5,128 retail premises affected this equates to another year of forking out an extra £14million in tax compared to counterparts down south. It simply makes it more expensive to operate on our high streets and raises the hurdle for attracting commercial investment.

similarly, moves to protect workers on modest or low earnings from income tax rises will support consumer spending, sensible with further increases in council tax and the legal minimum for employee pension contributions on the horizon.

THIs will hopefully tempt more folk onto scotland’s high streets and retail destinations in the run-up to Christmas. With half of VAT receipts being assigned to Holyrood from next year MsPs have a direct stake in improving consumer sentiment and a flourishing retail industry.

Together with investment in infrastructure, housing, city regions and skills this is encouraging and should aid productivity. The new town centre fund appears to be a welcome initiative and we will await the details with interest.

Nonetheless, the economic growth projections from the scottish Fiscal Commission are sobering, more so as scotland’s economy has underperformed the UK. Continued growth of barely over 1 per cent presents a challenge for retailers let alone Government revenues. If we are to see a step change, then lifting private sector investment becomes even more critical.

This will kick off a robust debate on the Government’s spending plans. Quite rightly the Budget needs to be scrutinised in detail.

However, right now businesses need stability and certainty – something all politicians have a duty to provide.