Scottish Chambers of Commerce spells out hopes for Draft Scottish Budget 2018/19

12th December 2017

The Scottish Chambers of Commerce is calling on Finance Secretary Derek Mackay MSP to match rates benefits for businesses introduced in the Chancellor Philip Hammond’s November Budget.

Setting out its ‘wish list’ for Thursday’s Draft Scottish Budget, SCC’s Chief Executive Liz Cameron called upon The Scottish Government to limit rises in the Uniform Business Rate (UBR) to percentage rises in the consumer price index (CPI) rather than the higher retail price index (RPI) in line with the UK Budget.

The measure is expected to save businesses in England and Wales £2.3bn over the next five years, introducing a potential competitive disadvantage to businesses in Scotland and serving as a deterrent to investment.

SCC also looks to Mr Mackay to follow the Chancellor in legislating against the effects of the so-called “staircase tax”, providing help for companies with non-contiguous accommodation in the same building.

Such a move would protect businesses in Scotland against the effects of a Supreme Court decision earlier this year, which ruled that businesses that are located in multi-occupancy buildings but not adjacent or on contiguous floors, should be taxed on more than one business “property”. The higher charges directed by the Court were backdated, imposing large retrospective bills on hard-pressed businesses.

On the eve of the Budget, The Scottish Chambers is also repeating the request to the Scottish Government, made last week by SCC President Tim Allan in his Annual Address, not to raise income tax for medium and higher earners. SCC maintains that a potentially uncompetitive Scottish tax regime, in the context of the UK as a whole, could serve as a disincentive to investment in Scotland, and create negative perceptions amongst potential investors that would be hard to reverse in future.

On the Land and Business Transaction Tax (LBTT), SCC asks the Scottish Government to rethink the banding and level of the tax on the basis of industry evidence that the current LBTT regime is deterring sales at the upper end of the Scottish housing market, with negative secondary consequences throughout the economy, while not achieving projected revenue targets.

SCC is also calling on Mr Mackay to provide more information on the budget, scope, remit and timetable of the previously announced Scottish Investment Bank in his Budget speech, following the completion of a public consultation process on the proposed body.

On broadband infrastructure, the Scottish Chamber of Commerce is looking to the Budget for more detail on the timing of the procurement process for the R100 programme, following the Public Information Notice that launched R100 in September 2016. The Chambers applauds the Scottish Government’s aggressive target of providing 100% superfast broadband to every premises in Scotland by 2021, and asks that the Scottish Government provide a timetable for milestones for delivery and consider boosting investor confidence in accomplishment of the target by making it legally binding.

On Monday, SCC welcomed the Scottish Government’s announcement of a £65m National Manufacturing Institute of Scotland based at Inchinnan in Renfrewshire on the basis that it would “further strength Scotland’s reputation as a hotbed of cutting-edge manufacturing knowledge”.

On the 2017 Draft Budget, SCC hopes for an announcement of increased revenue for local authorities and enterprise agencies which will have the potential, like NMIS, to directly benefit the R&D, skills and export capacity that Scotland’s economy needs.

For further information please contact Charandeep Singh on 07984 495871 or Colin Donald on 07793 606901.

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