The retail industry has been bedevilled by ad hoc supplements to the rates, shoppers’ finances are under strain and too often staff face violence and abuse. And these are just some of the issues affecting the sector that the Scottish Government must address, writes David Lonsdale of the Scottish Retail Consortium.
As MSPs reconvene at Holyrood following summer recess, their attention is quickly turning to the unveiling of the Scottish Government’s legislative programme for the coming year.
So what do retailers want to see from our Government and MSPs in the months ahead?
In these challenging times, our industry seeks measures which support consumers and retail workers, improve competitiveness, and incentivise retail investment.
The industry has faced a year which could best be described as underwhelming, at least as far as any growth in the value of Scottish retail sales is concerned. Indeed, sales growth has been pretty much flat over the past 12 months, at a time when public policy continues to push up the cost of employing people and the cost of operating stores.
That’s why we want to see a far greater emphasis on keeping down the cost of doing business in the First Minister’s new Programme for Government. Tangible headway is being made on recasting the business rates system for the future, especially on more regular property revaluations as envisaged in the Non-Domestic Rates Bill.
However, the rates burden remains onerous and continues to escalate, with the tax rate now at a 20-year high. Scots retailers faced an extra £13.2 million uplift in their rates bills in April.
Returning to a substantially lower poundage rate is unlikely to happen overnight. As a first step, the Budget Bill should restore the level playing field with England on the large firms’ supplement.
This Scotland-only surcharge costs firms’ £65 million extra each year, of which retail accounts for £14.1 million. It raises the hurdle for commercial investment in physical premises and increases the attractiveness of investment in digital routes to market instead. The surcharge ought to be eradicated by next April, as advocated by the Barclay Review.
Scotland’s rates system has been bedevilled by ad hoc supplements over recent years, including the large retailer levy, the doubling of the large business supplement, and the recently rejected proposal for a levy on out-of-town premises.
A moratorium on new or additional rates levies or supplements would increase certainty, as would scrapping plans in the Transport Bill which will see firms taxed twice for any parking spaces provided for staff.
Workplace-parking levies will simply add extra cost and complexity, and would come on top of the business rates already paid on those spaces. If Parliament is determined to legislate and give councils the ability to bring in such levies, then safeguards ought to be introduced.
There should be a cap on the amount that can be charged, a sunset provision on the duration of any levy, consistency amongst councils over how it is implemented, and a focus on assisting compliance rather than enforcement. The resulting receipts should be transparently used for additional transport services.
Household finances continue to be under strain, following an inflation-busting rise in council tax and an increase in the statutory minimum employees must contribute to their pensions. Other rises in the cost of living are in the pipeline, with consumers facing the introduction of up-front charges on drinks bottles and disposable drinks cups, as well as higher statutory charges for single-use carrier bags.
MSPs should be wary about heaping further pressure onto family finances over and above those already planned. Indeed, the emphasis now should be on bolstering household incomes and consumer confidence, with the Budget Bill ruling out increases in income tax rates.
It’s not just businesses that can benefit from Government action. In particular, we think there is a role for legislation to protect retail workers, and for Scotland to take a lead on this. Too often we read about violent or abusive behaviour towards shop staff.
This is utterly unacceptable, and retail workers should be able to work free from fear of violence, intimidation or abuse. It’s a growing problem, despite retailers investing considerable resources in protecting colleagues. Many of these crimes are thought to be linked to purchases of government-licenced and age-restricted products.
Recent years have seen more of these duties placed on shop workers. Our parliamentarians should get behind Daniel Johnson MSP’s proposals to change the law, so that the sentences available to the courts are stiff enough and offer a sufficient deterrent.
There is also an opportunity to do more to improve the nation’s diet. Retailers have led the way on providing healthy options, reformulating products, and improving the food and calorie information available to consumers.
The Government has a chance to take that good practice, along with restricting multi-buy promotions of crisps and chocolate, and bring forward legislation which ensures the whole food industry (including the likes of caterers, restaurants, hotels, and take-aways) plays its part in creating a healthier food environment.
While the coming political year will be dominated by Brexit and perhaps a possible UK General Election, our MSPs should channel their collective energies into ensuring that the retail industry, Scotland’s largest private sector employer, is even better placed to be able to invest, expand and create jobs.
David Lonsdale is director of the Scottish Retail Consortium