Barnett Consequentials (Retail Sector)

– in the Scottish Parliament on 15th November 2018.

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Photo of Bill Bowman Bill Bowman Conservative

1. To ask the Scottish Government how much will arise in Barnett consequentials from the reduction in business rates that was announced in the United Kingdom budget, and whether it will allocate all of this to support Scotland’s retail sector. (S5O-02559)

Photo of Derek Mackay Derek Mackay Scottish National Party

We received £42.9 million consequentials from the United Kingdom retail discount scheme. This is in the context of real-terms cuts to the Scottish resource block grant of £2 billion since 2010.

As Mr Bowman will be aware, Barnett consequentials accrue to the Scottish Ministers and decisions on the full package of non-domestic rates measures for 2019-20 will be made as part of our Scottish budget process. We have a competitive NDR package, and do not actively hypothecate Barnett consequentials, other than those for health.

Photo of Bill Bowman Bill Bowman Conservative

As reported in the press this week, according to the Scottish Retail Consortium, 11.1 per cent of Scotland’s shop units were vacant last month, compared with the UK rate of 9.6 per cent. In October, footfall plummeted by 7.5 per cent on high streets.

While the UK plans to give £900 million towards business rates relief, cutting a third of expenses for small retailers, the Scottish National Party has doubled the large business supplement, costing businesses hundreds of millions of pounds. With Scottish retail facing real difficulty, why can the Scottish Government not commit now to halving the large business supplement and matching the UK’s rate support for retail, and give some good news for firms in Dundee’s High Street, Reform Street and elsewhere?

Photo of Derek Mackay Derek Mackay Scottish National Party

The UK Government is working wonders for the British economy right now, is it not? No wonder the UK has the lowest forecast GDP performance of any European Union nation at the moment. I will take no lectures from the Tories on how to run an economy or any parts of the economy.

It is interesting that Bill Bowman mentioned Dundee High Street. Like most other high streets, Dundee High Street would have benefited from the small business bonus that has protected so many of our retail properties across the country. It was opposed by the Conservatives in their failure to support the Government’s successive budgets.

The bonus has ensured that Scotland has the most competitive package of business rates anywhere in the United Kingdom. I will keep that reputation as we go towards the Scottish budget. If I replicate all the decisions that the Tories make in terms of Barnett consequentials, that would mean replicating the cuts as well. This Government makes different choices on our public services. We will make the right decisions by the people of Scotland and support our economy in a far more credible way.

Photo of Maureen Watt Maureen Watt Scottish National Party

Would the Government set out how many recipients of the small business bonus scheme there are in 2018-19 and how much is being provided in relief over that period? How does that measure up to the SNP’s manifesto commitment to lift 100,000 properties out of business rates altogether?

Photo of Derek Mackay Derek Mackay Scottish National Party

I take great pleasure in updating the chamber on those numbers. The small business bonus scheme has provided a record £254 million in relief to 119,400 properties in 2018-19. Therefore, we have met our manifesto commitment, lifting 104,500 recipients out of business rates altogether.

Photo of James Kelly James Kelly Labour

Support for the retail sector will not be helped by the fact that there are 470,000 people in Scotland not being paid the living wage. That is an unacceptably high figure and means that a large portion of those people do not have the money to spend in and support those shops.

Will the cabinet secretary support Labour’s plan for a £10 per hour living wage? What consideration will the cabinet secretary give in his draft budget to addressing the unacceptably high number of people who are not being paid the living wage?

Photo of Derek Mackay Derek Mackay Scottish National Party

It would be better if real devolutionists ensured that the power to set the living wage rested with this Parliament, rather than with Westminster.

I am looking at the decisions that we can take around the living wage. It is the Living Wage Foundation that sets the rate that we have pledged to follow. We will continue to do that. I am looking at those other matters. I am looking at retail and specific sectors as well, recognising that some sectors have more challenges than others in the delivery of the principle.

However, this Government has delivered more than any other Government in the UK and more than any previous Scottish Administration in taking forward the fair work and living wage agendas.