24 Nov 2021
By Stuart Patrick, Chief Executive of Glasgow Chamber of Commerce
Kate Forbes, Cabinet Secretary for Finance and the Economy, has the opportunity to offer some help to consumer businesses in our beleaguered city centres in her budget announcement in December.
She might have hoped that the Scottish Government’s decision to give full rates relief to the retail, hospitality and leisure sectors for this financial year would have been enough to see them through to recovery, but another disrupted winter is on the cards.
In Glasgow, the city centre continues to struggle and COP26 has sadly made the situation worse. Continuing rates relief into the 2022/23 financial year would be at least one welcome move.
The Centre for Cities statistics have now been updated reaching the end of October and on the centre’s mobile phone footfall measure, Glasgow has dropped back to second worst in a list of 63 cities and large towns across the UK. Only London now has a worse performance and the gap with Glasgow is closing.
The very gradual summer recovery had helped Scotland’s largest city centre reach just over 70 per cent of the pre-Covid levels of February 2020 but the warnings of disruption and traffic congestion during COP26 knocked that back to 64% even before the conference began.
Some of the reports from shops, bars and restaurants suggest the position deteriorated a great deal further in what is traditionally known as the Golden Quarter.
It is true that Glasgow’s hotels did better but while COP lifted occupancy rates to 72% for November the current figures for December have collapsed back to 30% and the early months of 2022 are currently just over 10%. Operating a hotel involves very high fixed costs and for some the financial pressure may be too severe to cope with a return to full business rates in April.
Chancellor of the Exchequer Rishi Sunak has already committed next year to a £1.7 billion rates relief measure for English retail, hospitality and leisure business.
That comes in the form of a 50% relief on rates bills up to £110,000 for each business. Ms Forbes might argue that the Chancellor’s rates support in the current year was less generous than her own but as the Centre for Cities data shows, the recovery in English cities has also been on average faster.
That is largely down to the greater emphasis the Scottish Government has placed on working from home as a virus suppression measure. The Centre for Cities includes a weekday index in its data which tells us how much daytime footfall has returned to city centres during the working week. Glasgow’s weekday index at the end of October stood at 54 against February 2020, while comparably large English cities like Birmingham and Leeds were 69 and 74 respectively.
Arguing for a swift end to the Scottish Government’s guidance on home working may appear counterintuitive in the early winter weeks but Scottish Chambers of Commerce Chief Executive Liz Cameron said on Monday that ‘the modelling being put forward by the Scottish Government fails to demonstrate that workplace transmission is taking place in office settings’.
She argued that further government pressure on employers to increase home working “would be a considerable step backwards” especially for our town and city centres.
Much as one might wish it however, the Scottish Government appears unlikely to lift that guidance any time soon.
But the damage being done to Glasgow city centre shows it is not a costless measure and we will continue to argue that it should be kept under very regular review. Failing that, the argument for Ms Forbes to consider a further round of business rates relief gathers even greater importance.
This article was first published in The Herald on Wednesday 24 November 2021