28 Nov 2016
Policy area: Finance
The Autumn Statement, as always, gives the Chancellor the opportunity to set out his priorities for tax, borrowing and spending. In a time where there is much uncertainty on the impact of Brexit, there were various outcomes of interest that will have surprised, pleased and even shocked some of the country.
Although much of the Autumn Statement will not directly impact the Scottish property industry, the £800m worth of additional money that will be transferred to Scotland through the Barnett formula will lead to many sectors asking Scotland Finance Secretary, Derek Mackay and his Scottish Government colleagues for support.
One area which Scotland’s real estate sector will be following closely is the Chancellor’s announcements on business rates which will leave the sector hoping that the Scottish Government does not follow suit. The UK Government’s plans to introduce a fully self-funded transitional relief scheme will be of major concern to retailers in particular, who stand to lose some £650m through delayed decreases in assessments over the course of the Parliament. We fear this may push some of these companies over the edge.
In terms of Scotland – the message to the Finance Secretary is clear. A competitive rates environment is essential as Scotland looks forward and businesses are crying out for support and for a system that will see them protected from what could be crippling rate rises. A system of transitional rates relief is vital where large rate increases are proposed based on now out of date assessments. But any such relief should not be at the expense of other ratepayers depending on long overdue and much needed decreases in their rating assessments. We will continue to make this case vigorously to the Scottish Government.
The Chancellor’s statement also reiterated a commitment to an Edinburgh City Deal which has long been trailed but detail on how this will work in practice remains thin on the ground. However there was good news for Stirling and the surrounding communities with the announcement of a new City Deal which now leaves all of Scotland’s cities with the potential to attract significant investment and I know Scotland’s real estate sector remains excited about the opportunities this may bring with the development of a long term-strategic approach to investment and infrastructure planning.
There were further announcements of interest in the Chancellor’s remarks such as a new National Productivity Investment Fund which will provide £23bn of support for R&D, digital communications, transport and housing projects and a new £2.3bn Housing Infrastructure Fund which will support infrastructure development aimed at supporting new homes. Whilst we cannot match that scale of investment in Scotland, the direction of travel which seeks to support the development of housing and infrastructure is very welcome and I know Scotland’s real estate sector will be looking towards Derek Mackay on December 15th to match that positive intent.