Overhaul of rates system called for

THE SCOTTISH Retail Consortium yesterday called for a “fundamental overhaul” of the rates system as the tax take from business swells further.

SRC director David Lonsdale said levies placed on firms generated £2.4 billion in Scotland per annum, and he said the figure would increase by a further £400m by 2015/16.

A further 2% rise in rates is due to come into force at the start of the new financial year on Tuesday and, of that overall sum coming from retailers, Mr Lonsdale said it was time for a major rethink.

“The Scottish Government’s decision to cap this year’s increase in business rates at 2%, and their commitment — unveiled at the SRC’s recent annual reception — not to renew the £95m large retailer levy after March 2015, suggests a welcome recognition of the challenge business rates pose to the retail industry,” Mr Lonsdale said.

“These two decisions are encouraging, however they are but a sticking plaster to a rates system which requires a more fundamental overhaul.

“This will be crucial to increasing retailers’ confidence about investing in property and to creating more jobs and reviving high streets.”

Mr Lonsdale’s comments came as the Office for National Statistics revealed a bigger-than-expected bounce-back in retail sales last month as shoppers returned to the high street after a weather-hit January.

The data shows sales volumes rose 1.7% month-on-month in February, smashing forecasts for sales to edge 0.5% higher.

The figures show that sales across food stores and supermarkets rose 2.1% between January and February, and by 1.6% on a year earlier.

The result is at odds with recent figures from the “big four” players, with Sainsbury’s the latest to blame tough conditions after it broke a nine-year record for rising underlying sales.

Chris Williamson, chief economist at Markit, said: “With 2014 set to be the year in which real incomes start rising again, after having been driven down continually since late 2009, the consumer should therefore play an important role in sustaining the economic recovery.”

The figures also showed average weekly spending online rose by 12.4% year-onyear to £678.8m in February.