In his New Year message, SRC director David Lonsdale pointed to the vote to end the uniform business rate and the introduction of workplace parking levies as high-profile examples of a “worrying ad-hoc and piecemeal localism” which he claimed is edging into devolved policy making.
He said: “Both decisions arrived out of the blue and without any economic or business impact assessment.”
Lonsdale highlighted concerns over future policy decisions, such as cross-party talks currently underway at Holyrood over reforming council tax.
He said: “SRC is open to reform or replacement of the tax. However, our concern about the dearth of wider stakeholder involvement in this has been heightened greatly by the vote to end the uniform business rate.
“After all, replacing council tax could have significant implications for household disposable incomes and consumer spend, for employers, and for other parts of local government finance.”
Lonsdale predicted that retailers would continue to face “a more interventionist and less permissive” policy making process from the governments at Holyrood and Westminster.
“With politicians seemingly unable to wean themselves off the rush to regulate and tax, this will challenge retailers’ ability to keep costs down for households at a time when profit margins will remain thin,” he added.
Business rates are currently at a two-decade high, adding to the cost management burden for the Scottish retail industry.
Grounds for 'cautious optimism'
Lonsdale also flagged reasons for “cautious optimism” regarding consumer spending, which could bring a temporary boost to online sales.
“Employment levels remain high and real wage and population growth bode well and hold out the prospect of a better year ahead, especially if the fog of uncertainty and political gridlock which has surrounded Brexit lifts.
“There will be opportunities, too, whether on better legal protections for shop workers, finally securing a level playing field with England on the large business rates supplement, or the creation of a retail strategy for Scotland.
“Eyes will be firmly fixed on the Scottish Budget early in the new year, which hopefully will finally deliver on the Barclay Review’s recommendation and scrap the large firms’ rates surcharge.”
It is estimated that this surcharge sees 22,000 commercial premises – of which 5,000 are shops – charged an extra £65 million compared to counterparts in England.
Lonsdale said: “The retail revolution will continue apace and no matter what is thrown its way the industry will adapt and overcome and play its role in driving forward Scotland’s economy.”