Retail groups in Scotland are raising alarms over potential investment losses if the government fails to match business rate discounts offered in England. Twelve industry bodies have sent a joint letter to Finance Secretary Shona Robison, urging a permanent discount for all retail sites ahead of the Scottish Budget on January 13, 2026.
Groups Demand Action on Business Rates
The push comes as retailers face rising costs and competition. The letter highlights how England’s new permanent discount, announced in the UK Budget by Chancellor Rachel Reeves, gives stores south of the border a clear edge. Without similar relief in Scotland, businesses worry about reduced investment and job cuts.
Industry leaders point to recent data showing Scotland’s retail sector supports over 250,000 jobs and contributes billions to the economy. They argue that high business rates are already straining high streets, with closures up 15 percent in the past year according to economic reports.
The groups signing the letter include major players like the Scottish Retail Consortium and the Booksellers Association. Their message is clear: action now could prevent long term damage.
How England’s Discount Changes the Game
In England, the UK Government rolled out a 40 percent business rates relief for retail, hospitality, and leisure sectors starting in 2025, made permanent to boost growth. This move aims to save businesses millions and encourage expansion.
Scotland, however, has not matched this in past budgets. For instance, in 2024, the Scottish Government passed on only partial relief for hospitality but skipped retail, leading to criticism from opposition parties.
Experts note that business rates in Scotland are calculated differently, often resulting in higher bills for larger stores. A study from the Institute for Fiscal Studies shows Scottish retailers pay up to 10 percent more on average than their English counterparts.
This disparity could shift investment flows, with companies eyeing England for new openings instead.
| Aspect | Scotland Current Rates | England with Discount |
|---|---|---|
| Relief Level | No permanent discount for retail | 40% permanent relief |
| Impact on Small Stores | Full rates apply above £15,000 value | Reduced bills for properties up to £110,000 |
| Annual Savings Estimate | Minimal without changes | Up to £10,000 per store |
| Sector Coverage | Limited to some industries | Retail, hospitality, leisure |
Fears for High Streets and Jobs
Retailers warn that without relief, Scotland’s high streets could suffer irreversible harm. Town centers are already seeing empty shops, with footfall down 8 percent in major cities like Glasgow and Edinburgh compared to pre pandemic levels.
The letter stresses the need for vitality in communities. One executive noted that investment decisions hinge on cost predictability, and higher rates make Scotland less attractive.
Recent events add urgency. In November 2025, several chains announced store closures in Scotland, citing rates as a key factor. This follows a trend where retail employment dropped by 5 percent over the last two years.
- Key concerns from retailers include rising operational costs amid inflation.
- Potential loss of foreign investment, as global brands prefer lower tax environments.
- Impact on local suppliers and related jobs in logistics and manufacturing.
Economic analysts predict that matching the discount could add 10,000 jobs over five years by spurring growth.
Industry Voices and Broader Calls
Leaders from various sectors have echoed the demand. The National Hair and Beauty Federation joined the call, pointing out how small businesses are hit hardest.
Trade unions have also weighed in, urging the government to prioritize retail as Scotland’s largest private sector employer. They reference successful relief programs in Wales, where similar discounts led to a 7 percent rise in new business openings.
Public sentiment on social media shows support, with posts highlighting the need for fair treatment across the UK. Opposition figures like Douglas Ross have criticized the SNP for past failures to pass on full funding.
What Happens Next in the Scottish Budget
The Scottish Budget in January will be pivotal. Finance Secretary Shona Robison faces pressure to balance fiscal needs with economic support. While the government has promised focus on growth, details remain unclear.
If no discount is introduced, retailers predict a tougher 2026, with possible relocations or reduced expansions. On the flip side, alignment with England could signal Scotland as open for business.
Experts suggest monitoring inflation trends, as rates are tied to property values that rose 4 percent in 2025.
Looking Ahead: Risks and Opportunities
Without change, Scotland risks falling behind in the UK retail landscape. Investment data from 2025 shows a 20 year high in business funding, but retail lags due to policy gaps.
Matching the discount could unlock potential, drawing in tech integrated stores and sustainable retail models. Retailers hope for a positive response to sustain vibrant communities.
Share your thoughts on how business rates affect local shops, and spread this article to spark discussion on Scotland’s economic future.
