Coming on the back of the national living wage (NLW) announcement in the Budget, George Osborne’s decisions to introduce the apprenticeship levy without consultation whilst making only minor changes to business rates down south left a bitter taste in the mouth for retailers.
Retailers share the government’s ambitions on improving pay and productivity. Both are priorities for an industry going through transformational change. However, announcing policies which will have enormous impact on businesses without prior warning or consultation is not the right approach.
The consequences were predictable. With only six months to go the government is still issuing guidance to firms on the apprenticeship levy. The devolved administration is yet to even confirm whether levy-payers in Scotland will be able to directly benefit from the cash, as is planned in England; although in their defence Scottish ministers have faced the same challenge as businesses having had no prior warning about this levy.
This comes when retailers face significant uncertainty following the Brexit vote. In particular, the depreciation in the value of sterling could lead to cost pressures for retailers importing products. Absorbing rising import costs and avoiding higher prices on shop shelves will be tricky at a time when government-imposed costs are escalating faster than consumer spending.
Much of the frustration from retailers is that we don’t disagree with UK ministers on many of their goals. There is a drive within retail for more productive and skilled workers. Retail work is evolving; moving to more skilled roles with greater responsibilities and higher pay. Investing in our workforce is absolutely essential. What we need is public policy which enables, rather than deters, investment.
The upcoming Autumn Statement provides an opportunity for the new Chancellor to change course. The role of the Low Pay Commission should be strengthened with future increases to the NLW taking account of economic circumstances not just political factors. The apprenticeship levy should be paused and the Chancellor should revisit the reform of business rates.
• David Lonsdale is director of the Scottish Retail Consortium