With all eyes on tomorrow's Spring Statement, David Lonsdale of the Scottish Retail Consortium considers whether the intent to avoid tinkering with the financial dials will hold. Mr Lonsdale will be among the expert panellists at The Herald Budget Briefing.

All eyes tomorrow will be on the Chancellor’s Spring Statement, and the Treasury has been at pains to stress this won’t involve major fiscal policy announcements.

Instead, the focus is to be on the Office for Budget Responsibility’s forecasts for economic growth, investment, and public spending. In essence it’s a half-term report on whether the government is beginning to deliver on its pledges to reboot the economy and bring down the deficit, and ultimately the national debt.

This will come as something of a relief to retailers after recent UK Budgets which tightened the fiscal screws on the industry – principally the swingeing increase to employers’ national insurance contributions – and led to higher prices for shoppers.

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However, it will be interesting to see if the intent to avoid tinkering holds given the recent feeble GDP growth figures and the upcoming parliamentary elections across Scotland and Wales and local government elections in England. This is especially so after several prominent policy reversals over winter fuel payments, the timing of English local elections, and on taxes affecting farms and pubs.

If there is to be a twiddling of the fiscal dials it would be good to see measures which lift consumers’ propensity to spend rather than save and which help rather than hinder retailers’ ability to keep down prices. After all, there are few routes to economic growth which don’t involve improved levels of consumer spending.

If the Chancellor remains reluctant to turn on the public spending spigot then there are measures her government could take to pep up private sector confidence and commercial investment, and which involve little or no cost to taxpayers. These include fast-tracking the delivery of infrastructure and planning consents for development and easing the regulatory burden on business.

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Employment costs for example have shot to the very top of the retail industry’s list of concerns, according to our latest survey. This is little surprise for a nationally-significant industry like retail which is the country’s largest private sector employer with 230,000 Scots and almost three million people across the UK employed directly in it.

The aforementioned changes to employers’ national insurance and successive above-inflation uplifts to the national living wage have pushed up the cost of employing people and, the survey reveals, has led to fewer hours and less overtime being offered, as well as a reduction in headcount.

A third of retailers report a freeze on recruitment and a shift in investment towards automation rather than jobs. Separately, ONS data shows that over the past year there has been a reduction of 74,000 jobs in the industry across the UK, so clearly we can’t take the availability of retail jobs for granted.

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The current concern relates to aspects of the Employment Rights Act. The act was passed by Parliament prior to Christmas and includes sweeping changes to industrial relations and employment laws. However, much of the detail is still to be thrashed out and finalised and will ultimately be implemented through secondary legislation.

Retailers are behind much of what is being proposed and have a vested interest in seeing rogue employers dealt with more effectively. However, aspects to do with guaranteed hours and shift-based working have still to be worked through.

Getting the implementation right will raise standards whilst supporting retailers’ ability to continue to offer flexible and local jobs across the country. Get the implementation wrong and it will add complexity and cost, stripping away entry-level and part-time job opportunities at precisely the moment the country needs them most as unemployment, especially for young people, is rising.

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Over and above achieving a mutually satisfactory landing zone on changes to employment rules there is one further move the Chancellor could usefully take at no cost to the public purse.

The last UK Budget was held much later than normal, at the very end of November, slap bang during peak trading for the retail industry in the lead up to Christmas. The long drawn-out process and resulting speculation, coupled with already weak consumer confidence, didn’t help. Scheduling future fiscal events much earlier so they don’t impinge on the key retail trading period would be appreciated on the high street.

David Lonsdale is director of the Scottish Retail Consortium.

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