AGCC: Scottish Budget falls short of business expectations

THE SCOTTISH Government’s Finance Secretary Kate Forbes has detailed her tax and spending proposals for 2022 to 2023. This Scottish Budget was announced against the continuing backdrop of the Covid-19 pandemic, the SNP government’s partnership agreement with the Greens, and the election pledges set out earlier this year.

Amongst the key points of relevance to business and the economy were the continuation of rates relief for the retail, hospitality, leisure and aviation sectors, at 50% for the first three months of 2022-23. This is being capped at £27,500 per ratepayer to prevent a “cliff edge”, while the Non-Domestic Rates poundage will be 49.8p, a below inflation rise.

Of specific interest to the North East was the announcement of the first funding allocation of £20 million for the 10 year £500 million Just Transition Fund for the North East and Moray.

Responding to this Scottish Budget, Ryan Crighton, Policy Director at Aberdeen & Grampian Chamber of Commerce, has commented:

“What we wanted today was action on a couple of key issues – business rates and our transition to net zero. On both these fronts, the announcements were underwhelming.

“The Scottish Fiscal Commission report suggests that businesses will pay around £720million more in business rates next year.

“The majority of this is coming from our hardest hit businesses in retail and hospitality – just as ambiguous messaging around working from home is hitting footfall on our high streets and dampening Christmas demand.

“The minimum businesses in the affected sectors expected was 50% rates relief across the full year, in line with what Rishi Sunak announced for England in his budget.”

He added:

“The first £20m of the £500m Just Transition Fund being allocated is welcome, but this is just 4% of the total. We have been hearing a huge amount about accelerating our path to net zero, something which businesses in the north-east are fully committed to, therefore 4% doesn’t feel like stepping on the accelerator.

“It is really important that this coming year is used to rapidly identify projects for the fund to be deployed on, that the remainder of it is distributed at breakneck pace, and that government ensures that a substantial share of this funding is geared to supporting businesses, particularly SMEs, and workers in the oil and gas sector to retrain and deliver our shared net-zero ambitions.”