Budget ‘only delays cliff edge’, business group says

Business organisations have been responding to Kate Forbes’ Scottish Budget.

The Budget extended business rates relief (Dominic Lipinski/PA) (PA Wire)

The Scottish Budget only delays the cliff edge businesses will face when the rates relief scheme ends, a group representing tourism companies has said.

Other business organisations said the support set out by Kate Forbes may not be enough to support recovery from coronavirus.

The Finance Secretary announced rates relief for retail, hospitality and leisure businesses would continue at a 50% level for the first three months of the 2022/23 fiscal year.

Ms Forbes said: “This will prevent a cliff edge for businesses in those sectors, saving them a further £56 million in 2022-23.”

Small businesses with a rateable value of less than £15,000 will continue to be exempt from paying business rates for the whole year.

Marc Crothall, chief executive of the Scottish Tourism Alliance, said the support did not go far enough in helping businesses recover from the pandemic.

He said: “Today’s budget announcement sends a clear and stark message to Scotland’s tourism industry that the short-term extension of business rates relief is effectively the one last lifeline of support available.

“The cliff edge the Finance Secretary refers to will only be delayed until June 2022 when the impact will be felt hard by businesses across all sectors within our industry.

He continued: “Many businesses are already expressing disappointment and shock that the future relief doesn’t match what has been announced by the UK Government.”

The SLTA warned of the impact of the Omicron variant on the licensed trade (Yui Mok/PA) (PA Archive)

The Scottish Licensed Trade Association (SLTA) said Scottish businesses had received the highest level of rates relief in the UK over the last two years, but more was needed to give companies a “fighting chance” as they recover from coronavirus.

SLTA managing director Colin Wilkinson said: “Just when hospitality businesses were beginning to get back on their feet, along comes the Omicron variant to throw a spanner in the works so the news in today’s Scottish Budget is a welcome step towards aiding our recovery, but more targeted support will be needed.

“People are understandably nervous about going out and about pre-Christmas and despite the efforts of the sector to provide a controlled and one of the safest environment settings as possible, this has resulted in a raft of cancellations of festive drinks, lunches and nights out.

“So the gains that many were hoping for during this key trading period will not be what businesses were hoping for and indeed needed for their survival.”

Andrew Mcrae, of the Federation of Small Businesses (FSB), welcomed many of the measures in the Budget, but said more support may be needed later.

He said: “On rates, the Scottish Government has done the right thing by retaining their vital Small Business Bonus scheme.

“And retail and hospitality businesses outside the scope of this help will recognise that ongoing, though reduced, support for their sectors is better than a cliff-edge withdrawal.

“However, there’s a compelling case to further extend the duration and level of this relief for independent operators especially if we’re not out of the woods by the spring.”

Tracy Black, director of CBi Scotland, said: “While the Finance Secretary has outlined some helpful interventions for business, firms that have been working tirelessly to get back on their feet after two miserable years will be left with little to get excited about.

“The removal of the business rates cliff edge in April for hospitality, retail and tourism firms will be welcomed, however many will be disappointed that the government hasn’t gone further – particularly as uncertainty around Omicron gathers pace.”