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Ministers urged to ease burdens

Higher costs creating more ‘gap toothed’ high streets

Keith Brown, Louise Masson, Andrew Murphy
Keith Brown, Louise Masson (general manager, Harvey Nichols), and Andrew Murphy at the reception (photo by Terry Murden)

A Scottish retail leader has warned of an acceleration in the rate of shop closures and “gap toothed” high streets unless cost burdens on the sector are reduced.

Andrew Murphy, chairman of the Scottish Retail Consortium, said there was a need for ministers to look at a range of issues affecting the future of the country’s biggest private sector employer.

Addressing more than 100 guests at a reception for MSPs and retail leaders at Harvey Nichols in Edinburgh, he said there were many “gap toothed” high streets.

“Step outside the main centres and few retail thoroughfares have a full set of teeth,” he said, adding that digital retail has “irrevocably” affected the way people shop.

“These changes are happening whether we like them or not.”

He said governments needed to recognise they are adding to the sector’s difficulties by introducing added cost burdens, such as the living wage and higher business rates, just as the industry was trying to cope with this shift of shopping online.

“Retailers need government to lighten the cost burden,” he said.


Call for new zero-rate income tax band


He urged the Scottish Government to bring forward proposals from the SNP’s 2016 Holyrood Manifesto to create a new zero-rate income tax band.

It would mean bringing the government’s plans forward, thereby increasing the spending power available to shoppers.

With the Office for Budget Responsibility forecasting household disposable incomes will barely rise this year, the SRC believes the Scottish Government needs to take action to help struggling high streets and protect retail jobs. In the last two years retail employment has fallen by 5,000 and in the last seven 1,600 shops have closed.

In his address, Mr Murphy called for the Scottish Government to develop a Scottish retail industry strategy, and reiterated the SRC’s calls for business rates to be reformed; specifically to bring in three-year revaluations and competitive rate levels.

He said: “Retailers – and the 250,000 Scots who directly work in the industry – need confident consumers who will continue to spend in our stores. That’s why the SRC argued ordinary consumers shouldn’t face an increase in income tax rates in Scotland; and we were cheered the Scottish Budget reflected that view in February when it was passed.

“However, that move may not be enough given the gathering economic clouds. Both the ONS, and our own figures, show consumer spending under pressure from higher overall inflation, higher food prices and other costs.

“Retailers have kept shop prices down in the face of significant input inflation – but that can’t continue forever.


Barclay report due next month


“If this squeeze on household disposable incomes is set to persist, then Scottish Ministers should be prepared to consider bringing forward their existing plans to create a new zero-rate income tax band.

“That would effectively increase the tax free personal allowance over and above existing plans – giving the opportunity to increase the allowance more quickly than in the rest of the UK, which we believe could provide a timely boost to consumers, the economy, and hopefully retail sales and employment.”

Guest speaker Keith Brown, Economy Secretary, said the government was listening to the retail sector’s demands and acknowledged that it was the biggest private sector employer in the country.

“We recognise the points the consortium has made and it is why we have set up the review of business rates under Ken Barclay.”

He said he expected the review by the former RBS banker to conclude next month and said the government would give an early response to his recommendations.

> Interview with Andrew Murphy

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