Tax cuts for Scots workers needed to fire up economy, say retail chiefs

Tax cuts for Scots workers and the abolition of town centre parking charges should be among the measures considered to get Scotland's beleaguered economy restarted, retail chiefs have said.

It is feared many Scots stores will not re-open after lockdown
It is feared many Scots stores will not re-open after lockdown

The Government should also look at making direct cash payments to poorer Scots to get people spending, according to the Scottish Retail Consortium (SRC).

The past two months of lockdown have largely brought the country's economy to a standstill and resulted in sales plummeting by over 40% in shops. The economy is now facing the most acute recession of the post-war period.

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The retail sector is Scotland's largest private sector employer, with about 240,000 workers.

The SRC says the Government must now focus on a plan to breathe new life into city centres and get people spending again as the country slowly emerges from lockdown.

“The Scottish economy is already facing unprecedented turmoil," Scottish Retail Consortium Head of Policy Ewan MacDonald-Russell said.

"Our retail sales figures saw a 40% drop in April and there is a slew of evidence which indicates retailers will face the toughest trading conditions this century once the country emerges from lockdown.

"The Scottish Government must take bold and imaginative steps to deliver an economic stimulus package which will drive the economy on the road to recovery."

A temporary income tax cut for workers, as well as a reduction or threshold change in Land and Business Transactions Tax to stimulate house sales are among the measures being called for by the SRC in a submission to the the Scottish Government's Advisory Group on economic recovery.

A temporary scrappage scheme for white goods like washing machines and older less energy efficient items, should also be looked at which would allow Scots to trade these in for new replacements.

Parking charges could be removed in town centres in the short-term to encourage consumers to return to the high street without recourse to public transport.

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Ministers should also consider direct cash payments, perhaps means tested for less affluent households, to encourage spending, the SRC adds.

And a "realistic model" for how town and city centres can operate within the context of physical distancing measures should also be considered.

Shops in Scotland will be given the green light to reopen in phase 2 of the Government’s route map out of lockdown. A decision on whether to move to this stage will taken in two-and-a-half weeks.

But as the furlough scheme begins to unwind, it is feared that many firms will not return.

"Not every store which closed in March will reopen," the submission states.

"For some businesses the impact of this crisis will exacerbate the existing pressures to a point which is no longer sustainable."

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