No big bombshells but nothing much to cheer for retailers

After the nightmare of the UK Government’s 2024 Budget retailers have needed a strong constitution before listening to fiscal statements.

Thankfully there wasn’t any bad news on that scale when Shona Robison delivered her final Budget as Finance Secretary, but there wasn’t a lot to cheer either.

Retailers key interest was on how Ms Robison would respond to the UK Government’s new permanent reduction in business rates in England.

Shoppers out and about on Buchanan Street in Glasgow.

After hearing the statement they were probably unsure. To be honest after studying the detail in the Budget papers it’s still a little opaque.

The short version is that rather than simply reduce rates for retailers, the Scottish Government has opted for a mixture of reliefs which are capped in such a way that medium and larger stores will be paying more in rates than the equivalent store in England.

There was even a little sleight of hand when the Finance Secretary proudly announced there would be a reduction in the Higher, Intermediate, and Basic rates for all ratepayers.

Whilst that’s accurate, it’s standard practice following a revaluation to keep rates revenue neutral, not the giveaway which was implied.

Unfortunately the consequences are much clearer. For retailers of scale it will now be materially less attractive to operate and invest in Scottish retail destinations than in England. That is deeply worrying for already struggling high streets.

It also raises questions around how deep the Scottish Government’s commitment is to the shared ambition with industry to make Scotland the best place in the UK to grow a retail business.

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There was a similar story across the Budget. Once again Scottish ministers have demurred from taking action to fix the mess of the Apprenticeship Levy, which is nothing more than a tax on employment for Scottish businesses rather than driving productivity improvements. There were some positive moves on transport infrastructure, but more could have been done to improve trunk road connectivity.

Furthermore there wasn’t much to help bolster consumer spending. 2025 was a disappointing year for retailers with sales and footfall in the doldrums. Yet the small changes announced on income tax thresholds will have to outpace potential rises in council tax.

With no cap on council tax rises there will be some households hoping the next Scottish Government listens to our call for rises of above five per cent to be put to local referendums.

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It would be uncharitable not to note the one true bright spot. The single biggest operational issue for retailers at the moment is crime – with both shop theft and abuse at horrendous levels. The commitment to continue funding the Retail Crime Taskforce is therefore very welcome. Police Scotland have made a positive start in going after the criminal gangs responsible for so much crime, it’s therefore to the Government’s credit they are keeping them resourced to continue.

There is no doubt these are difficult times for government and businesses. It’s welcome to see the publication of a public sector workforce policy as a first step for Government to cut its cloth a little better rather than simply squeezing the private sector further. The lack of new increased costs is welcome.

There’s just a nagging feeling the Scottish Government needs to tinker less and deliver more if it truly wants to reinvigorate Scotland’s economy.

Ewan MacDonald-Russell is Deputy Head of the Scottish Retail Consortium