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As I See It

Holyrood has power to save our crumbling high streets

Terry smiling headHouse of Fraser’s decision to close half its stores, including its towering institution in Edinburgh, ought to be a wake-up call for politicians who are in danger of fiddling while Rome burns.

Brexit and the constitution predictably dominated debate at the SNP conference in Aberdeen but I didn’t come across any discussion on the growing crisis tearing our town and city centres apart.

That’s a pity as this is an immediate and alarming issue that is threatening a lot of livelihoods and a whole way of life. It is also one issue on which the ‘gives-us-more-powers’ Scottish government has the ability to take action.

It can reduce business rates, particularly the punitive additional rate levy. It can vary land and buildings transaction tax. It can apply the apprenticeship levy in a way it chooses (it already applies it differently to the UK government). It can invest in our urban centres to help improve the retail environment. It can offer funds to local authorities to repair crumbling roads and pavements.

What is lacking is a bit of imagination, couage and a willingness to take action.

When the parliament was established we were promised a new consensual style of politics. It never happened. Too much time is already spent hurling abuse around the Holyrood chamber on a narrow agenda: independence, Brexit, austerity. Opposition MSPs needlessly fight to defend services that no one asked for in the first place, such as free prescriptions and baby boxes.

While they scrap over so-called austerity (real austerity was about ration books and children having no shoes) we are seeing what is arguably Scotland’s biggest industry crumble before our eyes.

House of Fraser will put 6,000 people out of work across the UK with a huge knock on effect across the supply chain. It is not the first and it won’t be the last. PC World and HMV have vacated their stores further along Princes Street. Bhs closed last year as did USC.

There is more of this to come. The plague of shop closures will decimate other retailers: a report today notes a big shift of online home buying. Around 7% of homes listed for sale on Rightmove’s website are with online agents, an almost three times as many as in 2015 when it was 2.4%. Bookmakers say outlets may close partly because of tightening up of rules on gaming machines.

As we reported last week, Scotland has the biggest number of empty shops across Britain. There must be a reason why it holds that dubious distinction.

The move by consumers online is an obvious contributor to shop closures, and there is plenty of evidence of varying abilities by retail managers to embrace it. Some retailers – Ted Baker and the Glasgow-based Quiz Clothing – seem to be almost immune to the impact of online shopping. Indeed, it complements their outlets which they continue to expand.

However, there are deeper forces at work which are beyond the control of retailers and which are undoubtedly forcing many to downsize their operations or out of business altogether.

David Lonsdale, director of the Scottish Retail Consortium, has repeatedly blamed what he calls the growth in government-imposed costs, such as business rates, the national living wage, rising employer pension contributions and the apprenticeship levy. All of these are outstripping shopper spending and all are avoidable added costs.

On top of these costs, the Holyrood administration’s rates surcharge on medium sized and larger commercial premises affects 5,000 stores, and costs retailers £14 million a year, making it even more expensive to operate shops in town centres.There is probably evidence that the gain to the country’s balance sheet is outweighed by the loss in trade and jobs. With the click of a mouse this could be eradicated.

As David Lonsdale states, it is little wonder that one in nine retail premises is empty leaving gap-toothed high streets with vacant units. He secured an agreement from the Scottish Government to review its policy on the retail sector. If there have been any changes they have been minimal. And they’re not working.

 

 



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