Chamber and committees

Please do.

I take your point about the public sector, but a significant number of people—if not most people—who have been on furlough are employed by the private sector. What policy interventions would you like to see? Would they involve skills and retraining or perhaps job guarantee schemes? What interventions would the STUC like to take place to preserve private sector employment?

I wonder whether you can identify any particular consequences. Are there areas of provision that you think are particularly exposed or that have suffered because of the funding shortfall?

Surely not.

Kevin Robertson alluded to the need to examine the non-domestic rates situation. I completely agree with that view. Do you agree with the assessment that the fundamental problem is that non-domestic rates do not reflect the balance of trade—specifically retail trade—in the economy, and that non-store retailers are simply paying rates for having a warehouse rather than rates that reflect the fact that they are selling directly to consumers? Further, fundamentally, those rates are only notionally connected to rent—essentially, the assessors come up with a rateable value, but there is no direct correlation to what people are paying in rent. That means that we have a system that is broken and is a potential impediment to recovery in the sector. Do you think that I am overegging the situation, or do you agree with that position?

We agree that there needs to be an alternative. We need to think about what that looks like in the longer term, but are there also steps that should be taken in the shorter term? In the longer term, what should we be using as the basis for taxation? Should there be some sort of generalised sales tax? Should rent be taxed directly? Should it be landlords who are taxed rather than tenants? I know that your response to that question will be no, but I thought that I would put it out there nonetheless.

Finally, is there something that we can do in the short term to address the issues around online retailers? For instance, could we create a new category of retail or warehouse premises that would enable us to use the existing, albeit imperfect, regime to tax the massive increase in sales that the non-store retailers have experienced over the past 18 months?

I will resist the temptation to have a rant about the revaluation process—I will leave that for another day.

Finally, I ask Joanne Walker whether she has any thoughts or observations on the need for reform of non-domestic rates or any views about what should replace them.

I will take a step back. Covid has been, to use an overused word, unprecedented. We have seen all sorts of situations that we have never seen before. We have also seen a creative use of resource, and indeed policy. For example, we saw the eradication of rough sleeping through the direct action of using hotel rooms. I spoke to the chief executive of a charity that works in that field, and their key observation was that direct action had taken place that was not hidebound by rules and regulations and which considered individual need. We have seen positive outcomes in many cases because of that approach.

Building on such a lesson, how do we need to do policy differently? Can we learn other lessons from what has happened over the past 18 months now that we are, hopefully, on the other side of the pandemic?

I intend to focus mainly on high streets and the comments that have been made about retail but, before I do so, I will get my declaration of interests out of the way. I refer members to my entry in the register of members’ interests: I am a director of a company with retail interests and a member of the Union of Shop, Distributive and Allied Workers.

Before I ask about high streets and retail, I want to pitch in a different way a question that I asked the previous panel. Last week, the committee looked at the impact of taxation decisions that had been taken in Scotland. An additional £500 million should have been provided as a result of the changes that were made by the Cabinet Secretary for Finance and the Economy, but we have seen an uplift of only £150 million. The reason for that is the fiscal framework and the way that it works. Fundamentally, income tax receipts per capita have increased more slowly in Scotland than they have in the rest of the UK. What does that say about the way in which we have been applying taxation policy?

That elicits a fundamental question, which I put to the previous panel. Has the Scottish Government focused sufficiently on increasing the number of taxpayers in Scotland by getting people into work and ensuring that, when they are in work, they are sufficiently well paid? That is surely the best way of ensuring that we have money for public services in Scotland.

That question is probably more for Joanne Walker in the first instance, but I would be interested to hear Kevin Robertson’s response, as well.

I will pitch the same question to Laura Mahon, mainly because, when you were talking about tax, Laura, you were considering the wider external benefits of levies in some ways. Are we examining our tax powers sufficiently in the round and sufficiently in relation to the outcomes that they produce?