Murdo Fraser MSP has asked the Scottish Government if they are considering reintroducing a controversial rates ‘health’ tax on the country’s retail sector, which would “punish” it by forcing them to pay more if they sell tobacco and alcohol.
Earlier this week, the Scottish Conservative politician asked the Minister for Employment and Investment, Tom Arthur MSP, if the Scottish Government are considering rolling out the surcharge on larger retail stores if they sell these products.
The surcharge previously raised around £100 million over a three-year period prior to it being scrapped back in 2015. However, the Scottish Government stated they were considering reintroducing it in a written Budget statement at the end of 2023. The document stated that the Scottish Government were ‘committed to exploring the reintroduction of a non-domestic rates public health supplement for large retailers in advance of the next budget, while continuing work over the coming year to explore an infrastructure levy, to be implemented by spring 2026.’
Mr Fraser asked if this surcharge proposal, which has been described as “incoherent policymaking” by the Scottish Retail Consortium, could be set to be reintroduced again by the Scottish Government after he had initially asked the Minister what action was being taken to support the retail sector in the country.
He raised the issue during a Portfolio Question session on the Economy at the Scottish Parliament.
Speaking during the session, Mr Fraser said: “The latest figures for the retail sector in Scotland suggest it is struggling and, of course, it is also struggling from the fact that the Scottish Government won’t pass on the 75% rates relief available elsewhere in the UK to retail hospitality and leisure businesses. In the Scottish Government’s Budget at the end of last year, the Scottish Government raised the possibility of an additional penalty – a rates surcharge on larger grocery stores - something the sector is firmly opposed to as they would find this very damaging.
“Is the Scottish Government intending to proceed with this surcharge?”
Speaking following the question, Mr Fraser commented: “The Minister told me the Scottish Government’s Retail Strategy sets out their plan to work with the retail sector and trade unions in line with their vision for economic transformation, but he also revealed that the Scottish Government has discussed this surcharge with the retail sector - telling me he is acutely aware of the concerns they had expressed about it but said no formal decision had yet been taken.
“However, it is clear that the Scottish Government are seriously considering reintroducing this surcharge. David Lonsdale, director of the Scottish Retail Consortium, has said it could have consequences for the state of our high streets and town centres and suggested it would make economic recovery more arduous and I agree with him. The Scottish Government must look again at this proposal and consign it to the bin where it belongs as it will only punish our retail sector further.”
