Backing retail is the best way to boost growth

SCOTLAND’S economic recovery is improving, with growth more broadly based and unemployment continuing to fall.

Recent rises in footfall on our high streets havent translated into more sales. Picture: JP

Consumer spending can, however, only be sustained with a recovery in real incomes. As Scottish Retail Consortium (SRC) surveys demonstrate, recent rises in footfall on our high streets haven’t translated into more sales. So what can be done to ensure lasting economic growth takes hold?

At the heart of the Chancellor of the Exchequer’s autumn statement on 3 December should be measures which encourage businesses to hire and invest, and which put money in people’s pockets. He should ensure that employment costs remain reasonable, particularly in the light of recent pension reforms.

The retail industry is already Scotland’s largest private sector employer, providing 257,000 jobs, 14 per cent of the non-government workforce. It is proud of its ability to bring people with limited qualifications into the industry and set them on a career path that can lead to higher pay and responsibility.

The SRC’s surveys show that the overwhelming majority of adults in the sector earn above the National Minimum Wage (NMW). Many retailers provide a reward package of pay, benefits, discounts and progression which are greatly valued by staff.

That said, the industry is sensitive to movements in the NMW. While we support it, decisions on its future levels should take account of economic conditions and be underpinned by the principles of affordability, visibility and certainty. The independence of the Low Pay Commission should be protected.

Retail can contribute more to the economy if the tax system is made more competitive. Overhauling the anachronistic business rates system and making it more responsive to the actual state of the economy would also increase retailers’ confidence about investing in premises, creating jobs and reviving our high streets.

If the autumn statement generates any windfall “consequentials” for the devolved administration, this ought to be spent on infrastructure that benefits business, such as transport, broadband or high streets, or keeping down taxes and charges affecting firms.

• David Lonsdale is director of the Scottish Retail Consortium