David Lonsdale (SRC Director) has written an opinion column for the Herald.

The content of the article is copied below.

The announcement of the General Election was a strange combination of the surprising and the inevitable. It was definitely coming, and allegedly prompted by better economic indicators, but at least now there is some certainty.

Business will welcome that. The end of any Parliament creates a degree of uncertainty over which measures will pass and whether there will be a change of government. Once the ballot boxes are counted industry can look forward with more confidence to what the likely policy agenda will be.

The hope is that delivering a more buoyant economy will be front and centre for whoever wins; and of course ensuring the right conditions are in place to support retail.

Retail is a vital part of Scotland’s socio-economic fabric. Shops can be found at the heart of most communities, providing quality products for shoppers, jobs, and support for good causes.

The last few years have been a period of upheaval. Covid, the costs crunch, and a flat economy aren’t fertile conditions for trading. Consumer spending has been in a funk and retail insolvencies are at a ten year high.

However, there are grounds for cautious optimism. Unemployment is low. Shop price inflation is now a third of overall CPI inflation. Average wages are growing in real terms. Recent reductions in national insurance contributions and the council tax freeze should support demand. This summer’s European football championships and Olympics should provide a welcome fillip to retail, more so if Scotland’s footballers and Team GB give us something to celebrate.

Yet whilst there may be the chance of a fair breeze behind a consumer-led recovery, the flip side is that retailers’ costs continue to spiral.

This is particularly true when it comes to statutory costs such as the hikes in business rates and national living wage, and welter of regulatory measures. This comes as retailers shell out more to combat thefts, whilst incurring higher transportation costs for importing goods which would normally be routed via the Red Sea. All this makes trading profitably difficult.

The unveiling of the political parties’ manifestos and formation of a new UK government provides an opportunity to think anew about the approach being taken. This equally applies to the new First Minister’s upcoming Programme for Government and refreshed Tax Strategy.

Through its scale and reach, retail can make a big contribution to delivering public policy goals on the economy and decarbonisation. So what do retailers want to see from the next UK administration and the Scottish Government’s new leadership?

Firstly, a coherent approach which recognises the cumulative impact of decisions and relentlessly focuses on growth.

In terms of a focus on growth the omens seem favourable, most of the main parties now subscribe to this. Lifting private sector investment will be key to achieving sustained growth and improvements in productivity. One out of every ten pounds spent on commercial investment is by retail. The more retailers expend effort on grappling with red tape and extra costs means less resource is available to grow their business. A clear roadmap setting out the intended tax and regulatory reforms is needed.

Secondly, public spending restraint should be the order of the day, not new taxes like Holyrood’s mooted business rate surtax on grocers. Election promises of extra spending have been coming thick and fast. Yet the deficit in the public finances – at both a UK and Scottish level – remains and the national debt has swollen to record highs. Bearing down on the deficit will militate against the need for tax rises which hold back growth.

Thirdly, reform the apprenticeship levy. Retail is proud of its ability to bring in people with few qualifications and set them on a career path. It’s also creating new jobs which didn’t exist a few years ago, in areas such as online merchandising and logistics. That’s all made harder when forking out for a levy which here in Scotland is nothing more than an employment tax.

As political parties finalise their manifestos, they should spare a thought for local shops, the 250,000 Scots they employ, and for the millions of people those shops serve. Supporting everyday economy sectors like retail is not just good policy, it’s good politics.

By David Lonsdale, Director, Scottish Retail Consortium