Five-year plan is needed to help business

Business models which thrived just a few years ago are being re-evaluated. Picture: Getty
Business models which thrived just a few years ago are being re-evaluated. Picture: Getty
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As we approach the Chancellor’s Budget, thoughts obviously turn to what the new political term has in store after the general election in May.

While the Scottish Retail Consortium’s Budget recommendations can be introduced now, our suggestions form the basis of what we believe will deliver the right climate for retail in the next five years.

This is crucial because the industry continues to undergo profound change as a result of structural, economic and regulatory factors. For example, 21 per cent of non-food retail sales are now done online and last year the total value of Scottish retail sales fell.

Business models which thrived just a few years ago are being re-evaluated and refined.

Responding to these changes will require outlays on information and communications technology infrastructure, a more highly skilled labour force and revamped shops and warehouses.

This is having to be done against a backdrop in which shop prices are at record lows, margins are thin and costs (such as business rates) are rising.

So how can the Budget assist the retail industry to prosper? Retailers want to see measures which put money into people’s pockets, keep down the cost of doing business and facilitate retail investment.

Continuing to reduce the deficit in the public finances will militate against the need for future tax rises that could hold back the economy. Any headroom for income tax reductions should be targeted towards low earners.

Labour-related outgoings account for the largest business cost facing most retailers.

Our members want to see greater predictability over the future direction for the minimum wage with economic conditions and affordability firmly taken into account. The independence of the Low Pay Commission should be respected.

If the Autumn Statement generates any windfall “consequentials” for the Scottish Government, this ought to be spent on improving our high streets or keeping down taxes affecting firms.

• David Lonsdale is director of the Scottish Retail Consortium, www.brc.org.uk/src_home.asp