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Call to help high street as retailers fight for life

SCOTLAND'S shopkeepers have pleaded with ministers to throw them a lifeline amid dis-appointing sales and increased online com-petition as Scots join an estimated 7.1 million UK bargain hunters in the Christmas sales.

Experts predict nearly 140 retailers face going to the wall as they are unable to pay their rates this month despite Britons spending £5 billion in high streets in the weekend before Christmas Day.

Shoppers across the UK are expected to spend a total of £2.9bn in the post-Christmas sales. About four million are planning to go shopping today, but more than five million are looking online for bargains.

The British Retail Consortium said the pre-Christmas sales figures have been merely "acceptable" and many stores will be forced to discount heavily, cutting their profit margins further.

With the recent loss of Comet and JJB Sports, and HMV facing an uncertain future, the Scottish Retail Consortium (SRC) has now urged Finance Secretary John Swinney to introduce a rates freeze for retailers.

Shops suffered a 5.6% rates increase last year – more than double the current rate of inflation.

The Scottish Government is currently involved in a wrangle with Westminster over greater devolved powers for corporation tax, but David Martin, the SRC's policy adviser, said holding business rates at their current level could provide a bigger boost to the economy.

He said: "We would like to see something the Scottish Government could be doing to try to support us. The cost of doing business on the high street needs to be brought under control. One way they could do that would be by freezing business rates.

Such a move would have a "huge impact" on a sector which employs 240,000 people, or 9% of Scotland's workforce, as the biggest expenses retailers face are wages and tax.

Mr Martin added that holding rates "would be a significant gesture which I think would have a big impact for a lot of retailers up and down the country".

He said: "We're not looking for handouts but we are looking for Government to step in and support us to invest in jobs and high streets in Scotland.

"We have written to Mr Swinney about a freeze, we have met Scottish Government officials and we have pressed that point to them."

He accepts that, as Mr Swinney already pledged to match business rates poundage in England, a freeze is unlikely.

Mr Martin added: "The Scottish Government has been arguing for corporation tax to be devolved, saying it would use this to stimulate growth in the economy.

"But a freeze in business rates would stimulate more growth in Scotland than a cut in corporation tax, so we will be pressing the case with the Cabinet Secretary on that."

The past year has been "one of the most challenging trading environments for retail for a very long time", he said.

He added: "Sales growth (in Scotland) has been lagging behind the rest of the UK for about 18 months now. I think it's fair to say 2012 was one of the most difficult trading environments."

Since mid-2011, retail sales north of the Border have lagged behind the rest of the UK.

In contrast, Amazon's UK website said Christmas Day sales have increased by 263% over the last five years. But stores are fighting back with, for example, Braehead shopping centre throwing open its doors at 6am.

A Scottish Government spokeswoman said: "We have confirmed we will not set a higher poundage rate [on business rates] in Scotland but will continue to give Scottish business a competitive edge and will maintain parity with the business rate poundage in England. We will hold the next Scottish rates revaluation in 2017 and by then this Government is confident we will have a range of economic powers through independence that can help us create further competitive advantages for business in Scotland."

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