The sheer scale of the UK Government’s legislative agenda unveiled in the Queen’s Speech this month was breathtaking.
Thirty-eight Bills ranging from data protection, to energy, to consumer rights, paperless trading, and access to cash.
Several aspects will be of interest to Scotland’s retailers.
The health of high streets is to the fore in the Levelling Up & Regeneration Bill, which seeks to tackle persistently vacant commercial premises in town and city centres. Councils in England – but not Scotland – will be able to bring these empty premises back into use, offering shorter tenancies.
Action to reduce the number of shuttered properties that blight city centres certainly sounds encouraging, and hopefully will make for more vibrant retail destinations and lift shopper footfall.
However, it remains to be seen whether this will make a meaningful difference, as weak customer demand and low footfall can often be the underlying causes of empty stores in the first place. It’s also unclear whether Scotland will adopt a similar approach.
The proposed Non-Domestic Rating Bill will introduce three-yearly commercial property revaluations from 2023, again in England. Thankfully more frequently revaluations are already on the statute book here in Scotland. This should allow the rates system to better reflect trading and structural changes in the economy, and provide a more effective shock absorber against future economic bumps in the road.
However, viewed through the prism of twin concerns over rises in the cost of living and cost of doing business, there was little by way of immediate relief. That fell to the Chancellor’s mini-Budget on household energy bills last week. This prism is likely to be how the Scottish Government’s own programme for government is considered when it is unveiled in September.
The backdrop is inauspicious. Soaring energy costs have created a cost-of-living crunch for many Scots. Retailers are working hard to mitigate the impact of rising cost pressures in the supply chain which are compounded by government-imposed tax hikes. These pressures are outweighing the impact of strong competition between retailers who have little margin to work with and who are regrettably being forced to pass on these costs.
So what is to be done?
The devolved administration has a substantial £40 billion annual budget. Further taxpayer support may be needed to help households struggling to cope with soaring energy costs, which are reducing discretionary income, dragging down consumer demand and holding back recovery.
Rises in employees’ national insurance contributions and council tax and even the recent statutory requirement to install interlinked domestic smoke alarms have taken a bite out of household budgets.
Further public policy increases in the cost of living are already in the pipeline, including the deposit return scheme on drinks bottles and a levy on disposable cups.
Given this backdrop the least that should be done is a temporary moratorium on the introduction of workplace parking levies, and ideally a wider and more realistic appreciation of the need to continue to allow private vehicles into our city centres.
Given the multitude of increasing tax and supply chain costs, the Scottish Government’s Budget Bill should include a timetabled plan for lowering the onerous business rate over the lifetime of this parliament. Last month the business rate reached a 23-year high, up a fifth since the start of the previous decade.
An ambitious Bill would also speed up the promised level playing field with England on the Higher Property Rate. This surtax applies to 12,000 commercial premises in Scotland, a quarter of which are shops. It sees each of these properties pay a higher tax rate than competitors or counterparts in England.
Over and above this planned legislation on the environment, food promotions and obesity needs to be proportionate and evidence based.
What retailers need most of all is breathing space to recover from the pandemic, after two years of constant chopping and changing in public health regulations and with trading conditions incredibly tough. With the retail recovery in its infancy the onus for Holyrood’s version of the Queen’s Speech should be on supporting consumers and nurturing economic growth.
David Lonsdale is director of the Scottish Retail Consortium
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