Urgent reforms to the UK’s Business Rates system and Apprenticeship Levy are essential to support a retail and wholesale industry.
This is according to CBI Economics, whose new report suggests that retail and wholesale activity is now worth £352bn a year to the UK economy. It supports one in five of the nation’s jobs, with 5.7 million people employed within the sector or its suppliers.
In Scotland alone, the sector is worth £24.72bn to the economy and sustains 417,993 jobs. That includes:
- City of Edinburgh - £3.53bn and 51,130 jobs (17% of area’s total).
- City of Glasgow - £3.42bn and 63,434 jobs (17% of area’s total).
- Angus and Dundee city - £948m and 17,605 jobs (18% of area’s total).
- Aberdeen city and Aberdeenshire - £2.96bn and 44,818 jobs (18% of area’s total).
Yet the fallout from Covid and war in Ukraine continues to weigh heavily on the sector, and an inflation-linked 10% Business Rates hike due in the spring risks plunging many firms into a fight for survival, argued the CBI, adding that a slow revaluations system also means retailers and wholesalers are already overpaying.
That is why the CBI, supported by the Scottish Retail Consortium (SRC), is urging the Scottish Government to both rethink any rise in rates and implement longer term reforms which reward investment.
The report also stated that the government could take steps now by bringing forward their commitment to ensure the Large Business Supplement is brought into line with rates in England.
The CBI is also keen to see greater flexibility in the Apprenticeship Levy, a move which could have an enormous impact on a sector which already spends £4bn a year on training.
CBI Scotland director Tracy Black said: “Retail and wholesale businesses have remained at the epicentre of every economic ecosystem in Scotland throughout the crises of the pandemic, war in Ukraine, supply chain disruption and surging costs.
“Amid unprecedented levels of inflation and a cost-of-living crisis, it has never been more important to have retail and wholesale firing on all cylinders.
“That is why we are asking the Scottish Government to smooth the looming Business Rates cliff edge; without intervention to freeze business rates in 2023, firms face the possibility of eye-watering rises which present an existential threat for many businesses that communities depend on.”
SRC director David Lonsdale said: “Retailers have shown tremendous fortitude and resilience to come through the tribulations of the past few years, continually adapting their business models at pace to meet evolving customer expectations.
“If the industry and the broader ecosystem it supports is to flourish and fulfil its potential over the decade ahead then change is required from policy-makers - it’s crucial we see a more strategic and collaborative approach from government towards nurturing the growth of the industry, coupled with concerted action to reduce the burgeoning cost of doing business.”
Don't miss the latest headlines with our twice-daily newsletter - sign up here for free.
