IT is exactly three years since we had the first hints of the terrible damage and disruption of the pandemic, when stores were plundered in pursuit of toilet rolls and pasta ahead of what became a nationwide lockdown.
It has been a time of extraordinary tumult. After three years of Covid lockdowns and conflict in Ukraine, a costs crunch is afflicting households and businesses.
It’s been a rough time too for political leaders with little by way of a guidebook to help them navigate these travails. First Minister Nicola Sturgeon has been at the pinnacle of Scottish governmental life for more than a decade-and-a-half and I for one don’t underestimate the toll of the past three years on someone in that position.
Her successor will have plenty of challenges to grapple with. The policy choices they make will come at a pivotal moment for Scotland’s economic recovery.
The campaign to replace Ms Sturgeon needs a thorough debate about how the devolved institutions will help lift private sector growth and prosperity, compared with the mediocre growth rates experienced over the past decade. For the next first minister the economy should be the priority of priorities. After all, an expanding economy is good for living standards, job prospects, our pensions, and government revenues.
Every policy should be tested against a simple benchmark – will it make Scotland a better prospect for businesses to invest?
One aspect of this is the need for the devolved administration to crack on with its plans to reform and reduce the cost of government, including cutting the number and size of public bodies and through asset disposals. This will help militate against the need for future tax rises which could stymie economic recovery.
We all have a stake in a flourishing retail sector and the SRC will engage positively with new ministers to support the industry’s ability to continue to provide customers with the choice, quality, and value they deserve. As well as prioritising private sector growth that means building on recent achievements including the government’s retail strategy, retention of the uniform business rate, and freezing the business rate.
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An early priority for new ministers should include injecting more energy and vitality into Scotland’s town and city centres. They should be open to further measures to bring back footfall to our retail destinations, including a Scotland-wide shopper stimulus along the lines of the schemes that Glasgow and Northern Ireland implemented. Other options include discounts for travelling on public transport and reduced car parking charges.
Consumer spending is the mainstay of Scotland’s economy. Together, hikes in council tax and income tax will likely take a £250 million bite out of consumer spending. Ministers should rule out future increases in income tax on workers on modest earnings.
The current First Minister rightly highlighted a “costs emergency” facing firms. While the freeze in the business rate helps, the burden remains onerous. The pledge to restore parity with England on the higher property rate surtax should be accelerated, otherwise this Scotland-only surcharge will cost firms £180m over the next three years.
Getting a grip on regulation will be key. The cumulative burden of regulation has become an acute issue. Despite profoundly changed economic circumstances there is little sense of a stemming of the rush to regulate. Indeed, a government review last July of red tape causing angst came and went with the only tangible outcome thus far being the creation of a taskforce to look at things. Since July yet more proposals for regulatory intervention have come forward which will challenge retailers’ ability to keep down costs for households. A more proportionate regulatory environment would pause less mission critical initiatives until economic recovery is secured. Business should be involved at the inception of new regulatory thinking, something that would have put the consultation on restricting alcohol marketing on a surer footing.
Retail can make an even bigger contribution to Scotland’s economy and society if the right support is in place. The industry stands ready to work with the next first minister to make that happen.
David Lonsdale is director of the Scottish Retail Consortium
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