Scots shoppers could be over £330 worse off a year because of the SNP's tax break refusal
Hard-pressed families face hikes of around £6 on weekly bills with industry leaders warning a “perfect storm” of rising costs including business rates will be passed on at the tills.
Analysts last night forecast “desperate” shopkeepers would increase prices by up to three per cent amid warnings another 3,000 premises forced off high streets within two years.
Such an increase would see the cost of average shopping baskets soar to almost £221 in another blow to struggling consumers.
Finance Secretary Derek Mackay is under mounting press to axe a business rate revamp, which has sparked fears of company closures and job losses.
The SNP Government has already been hit by a rebellion over the first revaluation of non-domestic property since 2010.
Such an increase would see the cost of average shopping baskets soar to almost £221
We are in a situation where prices are rising anyway because of the depreciation of the pound
Professor Joshua Bamfield
Although carried out by independent assessors Mr Mackay has been urged to step in and throw firms a lifeline.
But he snubbed demands to freeze the current rate until a review of system by former RBS chairman Ken Barclay is published in the summer.
Stores are closing in Scotland at a faster rate than elsewhere in the UK with more than 200 high shutting down in the first six months of last year.
Professor Joshua Bamfield, director of the Centre for Retail Research, last night predicted another 2,000 to 3,000 would be axed by 2020.
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He said retailers would look at increasing by prices by 2 – 3 per cent as they look to recoup the cost of rate hikes.
Professor Bamfield said: “We are in a situation where prices are rising anyway because of the depreciation of the pound.
“If costs are going up the prices have to follow at some time or another.
“Everybody is in a desperate position and it is going to mean some closures.”
Companies are complaining of large increases of up to 260 per cent in their bills and have called for Mr Mackay to introduce a national transitional relief fund.
He has rebuffed this arguing councils have the power to apply local reductions.
But Professor Bamfield said town halls were already “stressed out” with financial problems adding: “The benefit of a national scheme is it is fair for everybody rather than one local authority saying ‘we can do this’ and the one next door paying no attention what so ever.”
Hard-pressed families face hikes of around £6 on weekly bills
Official figures show Scots households currently spend £214.50 a week on food, clothing, and other goods.
A three per cent price increase would take this to £220.93, leaving consumers £6.43 a week or £334.36 worse off.
The Scottish Retail Consortium (SRC) has said some members will be hit by rates rises of more than 30 per cent and is also angry at Mr Mackay’s failure to scrap the large business supplement, which last year doubled from 1.3p in the pound to 2.6p.
Head of policy Ewan MacDonald-Russell said: “Retailers were already facing big rises in their bills before these new revaluations came in.
“Recent years have seen business rates rise, employment costs go up, and the cost of importing goods increase as the value of the pound has crashed.
“This perfect storm of economic and government induced cost increases will make it more and more difficult for retailers to keep reducing prices.
Mr Mackay is under mounting press to axe a business rate revamp
“Official figures show inflation rising, and it is only a matter of time until shops have to pass some of these costs on.
“That could be very hard on consumers who have come to expect their grocery bills will keep falling.”
Earlier this week it emerged NHS chiefs had warned they faced bills of £30 million a year without a national relief scheme.
Scottish Tory finance spokesman Murdo Fraser said: “Now we learn people might need to spend more on the weekly shop.
“This is all the more reason for the SNP to set out exactly what action it’s going to take on this.”
Scottish Lib Dem leader Willie Rennie last night called for a rates “moratorium” until the Barclay review is completed.
Mr Rennie last night called for a rates “moratorium” until the Barclay review is completed
He said: “The SNP have already refused to listen to the concerns of businesses who supported a transitional scheme.
“Let’s hope they haven’t had enough of experts.”
The Scottish Government has been contacted for comment.
Mr Mackay last night said: “Average rates bills for retailers will drop this year following the revaluation and the competitive measures set out in our budget.
“Almost two-thirds of retailers already benefit from rates relief funded by the Scottish Government.
"Next year, across Scotland, more than half of premises will pay no rates, 70 per cent will pay either no or less rates than they do currently and the total package of reliefs we are offering will increase to more than £600 million.”