 Hydiw. Welcome to the 11th meeting of 2022 of the Economy and Fair Work Committee. Our first item of business is a decision to take item 4 in private. Our members are content to do so. Our next item of business continues our evidence gathering for the town centre and retail enquiry. The focus today is on the new realities for the Scottish retail sector. The committee will hear evidence from two panels. I welcome our first panel, Paul, Gerard campaigns and Public Affairs director from the Koch Group, David Laundale director of the Scottish retail consortium, Martyn Newman, a member of KMPG, Ipsos retail think tank and Maxine Smedley, who is head of stores of Scotland for boots. Thank you for attending this morning, as always if members and witnesses could keep their questions and answers as concise as possible. I'll say that not every question will be directed to every panel member, but everyone I will have an opportunity to contribute. If I could maybe start the questions. First of all, if I may direct the first question to Paul and Maxine, I come to Paul first of all. The retail sector has had a difficult time during the pandemic and as we start to emerge from Covid, what do you see has been the main concerns for retail sectors? How has the experience been and how is the recovery? Thank you for the opportunity to give evidence to the committee. The Co-op Group is a UK-wide business but we have a bigger presence in Scotland proportionately. 15 per cent of our stores are in Scotland. I think that we are probably more important in Scotland to many Scottish communities than we are in other parts of the UK. 11 of our 12 lifeline stores are in Scotland. 20 per cent of our stores in Scotland are the only food retail in a community. During the pandemic, the importance of the Co-op Group stores and other Co-op stores such as ScotMid became really clear because we were the only places that people could get food and other places that people could shop. The importance of the Co-op and food stores at the Co-op, like ScotMid, were really important. Three challenges as we come out of the pandemic that I think we are very focused on and they apply in Scotland firstly, online has clearly grown significantly. If I look at our online business across the UK, we had a very small online presence in 2019, about £4 million worth. That is now £200 million worth of business across the UK in 2021. However, online has grown and I think that we will continue to grow. How that is delivered depends, and in Scotland it is a really varied model of delivery, but online I think is important. Secondly, there are burdens on businesses that, if we are not careful, will prevent us from investing in communities, in stores and in colleagues. Rates is the most obvious example of that. The third thing I would say is that, as we think about online and the burdens on businesses, the importance of bricks and mortar shops to communities was never more seen than during Covid. We have to be really careful and tread carefully in how we support both the growth of online but also protect those anchor institutions, which is what retail stores very often are. As I said before, 20 per cent of the group stores in Scotland are the only food retail in the community, if I compare it to the rest of the UK, which is significantly higher. I think that how we balance the ease of online with the importance of physical shops to communities is really important. Maxine, do you want to respond to that question? We have a round table this week in Dumfries, and one of your store managers attended, so she gave us some insight into Boots experience during Covid. Do you want to say a bit about the retail sector and the recovery? Yes, of course. Good morning, everybody. I think I would add to what Paul has described. Similarly, Boots are in every high street in every town centre in Scotland. We have 274 stores across Scotland, ranging from our smallest store to our biggest flagship stores. In relation to the pandemic, we were open throughout, as in the central retailer, because of our pharmacy business. It is clear to see the impact that the pandemic has had. It has definitely accelerated the changes that we saw happening beforehand. Town centres are really important to us. We know that it is a big part of our future. However, we have saw customers diverged away from town centres, particularly during the pandemic, where they sought open spaces and out-of-town retail. That has not all returned to town centres, and we do see the impact, particularly in our largest city centres. Glasgow, Edinburgh, where previously we would have benefited from a lot of office workers and a lot of the work population. However, we continue to bounce back. We have sustained growth in our last quarter. We were up 22 per cent versus quarter two. However, what we are seeing is a need to diversify our business. Where we previously would have had a less experiential model, we have now moved into providing a more experiential beauty model and a more experiential healthcare model. That is definitely fitting the needs of our customers. We are seeing a real extrapolation between value and premium. We have a lot of our core customers who their spending is obviously much diminished. Therefore, the value proposition is really important to them. However, conversely, we see people who have not had opportunities to spend their free income and we see an impact on that. To touch on some of the points, we see that larger retailers are subject to higher property supplement. It is clear to see in some of our locations that we are overspaced. We have tried to take advantage of that, particularly with online growth. During the pandemic, we saw some of our businesses being changed to almost online warehouses. That has really protected jobs and has really helped to diversify the stores that we have. We need to make our customers more confident. Consumer confidence is really important to us at the moment, particularly in our high-state locations. If we could have anything that stimulates consumer confidence, that would really make a difference for us. Thank you very much, Maxine. David, if I could come to you. I will follow on to that question, because Maxine and Paul have both talked about a shared experience. The committee is familiar with the big issues that have arisen from Covid and the struggles of retail. The Government has recently published the strategy for the retail sector. Have you had a chance to look at the strategy? Do you think that they have chosen the right areas to focus on to aid recovery and help to support the sector? First, thank you for the invitation to be here. It is lovely to be in person at a real live meeting as well, which is great. We have had a look at the retail strategy. We have also had a look at some of the other parallel strategies that have been published in recent weeks. There was one on city centre recovery and, obviously, a couple of weeks ago there was the one on town centres, the joint one between the Scottish Government and COSLA. One of our big asks over recent years has been about policy coherence. We think that a lot of the building blocks are now in place. I guess that the one outstanding area that has not been addressed in these different strategies—Paul and Maxine have touched on it—is the whole issue around the cost of doing business. That is obviously very much to the fore at the moment in terms of business costs but also the cost of living and affecting households. A lot of positives. I am happy to go into the detail of the retail strategy. In terms of costs and business rates, ministers were very clear in the process that they would not be addressing the issue of non-domestic rates, for example, in terms of the retail strategy. There was certainly a lot in there that we supported. There was a very prominent and upbeat recognition about the social and economic contribution of the sector in Scotland. There is a strong element to collaboration between Government and industry, which is good. I am conscious that there are former ministers on this committee. We will know some of the discussions that we have had over the piece, so that is positive. The issue is like the journey to net zero. The industry has quite a good story to tell on this. We published a net zero by 2040 roadmap about 18-20 months ago. The retail strategy is really about how we can get more retailers to participate in that. We are up for that. We are already doing a lot in that space to help our members and retailers on that journey. The retail strategy is setting longer-term ambitions. Is enough being done to respond to the immediate pressures that are being faced by the retail sector? We were in Dumfries on Monday and, while there was a positive story there in relation to the mid-deeper quarter, many high streets had large empty vacant units that were struggling to be let again. We heard on the radio this morning about rising costs for businesses, the energy costs going up at such a fast rate. Is enough being done to support businesses with the shorter-term pressures that they are facing? The first thing to say is that, in the last two years, there has been substantial swift support from Government to aid the business community and retail in particular to get through the Covid crisis. One of the points that we have been making is that retailers are more than happy to pay their fair share of taxes and do that. Obviously, business rates have been reinstated, for example, at the beginning of this month. They have been reinstated at a 23-year high, so I think that that is worth pointing out. Obviously, in our written submission, we put forward some suggestions about how that could be addressed. We have also been quite clear about the need for some short-term actions to stimulate the return of commuters and office workers to our city centres to bring in tourists to try to get the footfall back up. We monitor our suite of surveys and data on retail sales, on empty units and retail premises on shopper footfall. While retail sales last month for the first time got back up to pre-pandemic levels, shopper footfall is still well short of that. Obviously, with Easter and tourists coming back, I noticed this morning that the train seemed full coming in from Stirling Snap. It was quite positive, but I still think that there is going to be an issue there. For the reasons to do with the cost of living and other factors, there is a real question mark as to how sustainable that return of demand will be over the months ahead. We took evidence recently from Professor Lee Sparks. One of the quotes that he used was that we have spent at least 50 years damaging our town centres. I wonder whether the panel agreed with that. More importantly, how can that be reversed? I appreciate that you have touched on some of those ideas already, but any other ideas you have and how can we reverse that? Do you agree with Professor Sparks' commentary on what we have done over the past 50 years? We can kick off with bringing in Matt Newman to start the discussion. First of all, thank you very much for giving me the opportunity to contribute to the conversation this morning. We have a number of factors at play and a number of things that we need to look at addressing in order to create an environment that consumers want to spend time in. If we think back to what retail and what the high streets used to be about shops, there is a very transactional relationship. First of all, retail has to up its game. I think that the experience in retail environments has to become a bit more experiential than it has been previously. One of the positives that I would say is that if you look at what is happening with housing, whereby historically we have moved out to the suburbs with the increase in single dwellings, more and more people want to live in and around our town centres. We are going to see population moving back in to near where our retail stores are. The experience has to be better, but then we also need a better mix. We look at all those empty spaces on our high streets at the moment. Those should not just be retail stores, we need to have entertainment, we need to have the right mix of food and beverage, we need to make parking accessible or give consumers the ability to get into those town centres in a more cost effective way. The environment has to be better, the mix of experience has to be better. Given what is happening with the population trend, we should be quite confident about what the future looks like. If you want to have a look at just one brand and think about what might be changing, you look at Ikea. Ikea has announced recently that it is closing its big out-of-town centre in Edmonton and Tottenham in London. It has taken the old top shop store in Oxford Circus, so Ikea is saying that we want to be closer to where our customers are and we see that being in town centres. I think that there is a real opportunity to encourage some bigger retailers that, possibly even previously, did not use to take up spaces on our high streets to be where our customers are, but we need to create better environments. Can I just follow that point up with yourself, David? Martin is saying that bigger retailers—many of your members, I suppose—are now more interested in the high street. Is that something that you are seeing? We have spent a lot of time allowing out-of-town developments to take place, which have had arguably a devastating impact on the town centre. Are you seeing members taking an interest again in the town centre, wanting to reverse that, or do we have to take further action as opposed to stop these out-of-town developments again? We have a large number of members and they tend to be larger retailers, although we have a number of smaller retailers in membership. If you like, there are subsexual trade associations that represent smaller retailers in our membership. The diverse nature of the industry is that they often have a foot follower stake in different retail destinations, whether that is in town centres, city centres, online, out-of-town retail parks, shopping centres and all the rest of it. What they want to see is retail destinations that are healthy, vibrant and have a sort of successful ecosystem of different types of businesses and lots of reasons for people to visit. Quite often, on my travels going out to see members, I will ask them what type of destinations they are and what are the best destinations. They often reel off the obvious places in Scotland where there are reasons for people to go and visit, whether that is in the merchant city in Glasgow because of high-end fashion in the Italian centre or places such as Edinburgh, St Andrews or or Nairn or Peebles or Robin or Fort William, where they have obvious particular niches covered, whether that is outdoor activity or tourist destinations and things like that. Most of our retailers have a stake in those areas. They want them to be successful. Those areas that have, if you like, a little bit more money, they might be more affluent. Their tourist destinations at market towns tend to be the areas that are particularly good for retailers. In terms of your question about damaging town centres and Professor Sparks' comments, I think that there is a whole range of issues that predate Covid for some of the challenges that town centres face. That can be the rise of car ownership. We saw supermarkets move from food into non-food many years ago. Out-of-town developments have been consented by councils for very understandable reasons as well. There is a whole range of factors in that. Obviously, the rise of online. Professor Sparks mentioned that. He chaired the review of the town centre's action plan that I reported early last year. That is what coslin ministers responded to a couple of weeks ago. I had a reacquaint in myself with Professor Sparks' review before coming along today. It was quite interesting because it is explicit in saying that the cost of doing business in town centres is too high and too expensive and that restricted economic activity. That is one for the committee to bear in mind. I think that I remember coming and talking about business rates quite soon, which I know that you have strong views on. Can I bring Maxine in? Maxine, you made a point earlier—and obviously feel free to comment on what Lisa Sparks says—but you made a point earlier about how we need action that is supposed to stimulate consumers back into the high street. What type of action would you like to take place? I think that Martin brought it to life quite well. Our town centres—there is no one-size-fits-all in terms of our town centres. As David said, as a big retailer, we have representation on out-of-town, we have representation in small communities and town centres as well. I think that I would use an example to try to draw or bring to life what would help. That would be shopping centres, privately-owned shopping centres. Obviously, they are commercial businesses, but they do very well in terms of increasing the dwell time for consumers. That multi-centre and inclusive approach to retail, hospitality, leisure—in some cases, residential—all those things really help to increase the dwell time and attract our consumers. We are still seeing a trend of consumers visiting less often, and anything that encourages them to come out of the house and actually spend some time in those locations. The other thing that is really important in considering our town centres is how we look at the digital accessibility. We know certainly both the growth in online sales, but there is definitely an on-the-channel approach to things. People want to look at reviews and so on while they are shopping. Digital infrastructure in town centres is really important. The other thing that I alluded to in terms of town centre locations is office workers, but we know that the hybrid way of working will stay. Anything that will at least encourage people to spend part of their working day in a town centre—flexible working spaces, as an example—would really help to bring people in in a different way that we haven't thought of in the past. That's very helpful. Pauline, you've obviously talked about how Scotland had weathered the pandemic storm in many ways, delivered in our town centres. What would help to ensure that that continues? I think that for the cold group and indeed our friends at Scotland, I think a couple of things I would say. I would agree very much with Martin about food stores that we need to be close to our customers. As Maxine said, that's not one-size-fits-all, so for city centre stuff it might be around office workers, commuters. If it's in tourist—and we have a very big tourist focused business—it will be a slightly different fit. For those who are with a main store in the community, so I think that we need to be closer to our colleagues, to our customers and members. That's absolutely true. In order to do that, what we do know is that where we can invest in those stores and make sure that those stores provide services to our customers and our members, that's when they become successful and that's when they become real institutions. I know that you mentioned that and I'm sure that we'll come on to it. The rail system, but other things as well, do not incentivise investment into stores to increase their value to communities and to town services centres. That is a fact. As David said, retailers are very happy—hear at the co-op group—to pay our brochure. We hold the first tax mark, but it's not also about fairness, it's about our ability to invest in those stores in our colleagues and in the communities so that they become vibrant anchor institutions within communities. Jamie Halcro is on to be followed by Maggie Chapman. Can I remind MSPs that they don't have to address the question to every panel member? If you want to name the panel member, that would help us to complete this in time. I feel that that's me duly warmed, convener. Morning to the panel. I know that we've obviously heard that there's no one-size-fits-all and I'm representing the Highlands and Islands and every community is different, but I would like to ask, perhaps to direct it to Martin, Eumann and then to David, a fairly general question, which is, what does a successful town centre look like now? What examples across the UK are there? What will it look like in, say, 20 years? Are there particular examples that you feel is on a particular UK or Scottish examples that are on that path to making the necessary improvements? If I can put that to Martin first and then to David. It's hard to find any perfect examples at the moment because, obviously, we're in this stage of evolution where lots of our high streets still have sadly empty spaces, but to paint a picture of what I think it needs to look like and where we're going, Maxine made a good point about the omnichannel proposition. The best way to think of this, I think, is to think of the fact that consumers are empowered. The internet could change the power away to some extent from retailers and put it in the hands of the consumers, because if we have a bad experience in physical retail, we've got 10,000 choices immediately available online. If we understand that and how people shop, which is that we go online for convenience, but we still like to enjoy a good experience, then again to Maxine's point, anything that we can do to increase dwell time and create an environment that people want to spend time in. That's how I think we have to think of our high street. Having retail stores is not enough. We need the right mix of retail stores, work environments, flexible working opportunities, food and beverage, hospitality and entertainment, the things that will bring people in because they want to spend time there. If they don't want to spend time there, they'll just go online. Of course, we've also got the rise of this thing called the metaverse that we'll probably talk about another time, which is essentially the virtual equivalent of the physical world in the online world. That's something else that's going to come down the line. We've got to create environments. I think that that needs yourselves. It needs a government level, a local authority level, retailers, landlords, consumers. We need a conglomerate of entities to come together to work out what sort of environment do we need to create that's going to be relevant, both in the short term and in the longer term, pays account of the fact of how consumer behaviour is changing. As I said on a positive note, I definitely envisage that more and more people will be living in and around town centres, so the addressable market for retailers is going to increase in the future, because there's going to be more people living in and around their stores and where they're going to be. The more we can do to encourage landlords to, for example, leases used to be tied into ridiculously onerous leases over 10 or 20 years, very expensive. We now need turnover-based leases that reflect the profitability of the turnover of a store, which gives somebody a better opportunity to make money out of that store and not be tied into something that is essentially a noose around their neck. If we can do something with business rates, and I know that we'll want to talk about that, then, again, to the points that were made earlier by both David and Paul, we create, from a cost point of view, a model that's a profit and loss model that's more attractive to retailers where they can run stores efficiently and profitably. I'll defer to Martin on the metaverse, if I may convener, but I think that he touches on most of the correct points about people who are living there in towns. There's good reasons to go and visit. As I said earlier on, there's an ecosystem that is mutually reinforcing beneficial to shops, whether that's hospitality, culture, leisure or other reasons to be there. Maybe to add a couple of points over and above things like tax and parking and transport links that have already been made. This sounds incredibly dry, but it's even things like building standards in the planning system. As I understand it, this is not my area of expertise, but what members tell me is, for example, that they can get shops up trading more quickly south of the border than they can in Scotland because when they're applying for a building, they can crack on with the work, they can even approach their own, they can choose who they want to verify their building control or building standards, whereas in Scotland you need a warrant in your hand first before you can get somebody in either to do the work to open a new store or to make substantial refurbishments or to put in signage or toilets or new seating or something like that. There are some low-level practical things that could be looked at by the committee or were recommended for further investigation that could be done going forward. Successful places, I think that I've touched on it in terms of destinations, really good reasons for people to go and visit. Obviously there are some structural benefits of an area that has affluent catchment area. Obviously, if we can get the economy motoring and a more buoyant economy, then retail should be lifted by that naturally. However, there are a number of policy levers that can be pulled that can make a positive difference to that. Obviously, we are trying to articulate that in our submission to the committee. Okay, thank you very much. If I can come back to Martin briefly, we've heard a lot about the shift to online retail. At the beginning of the pandemic there were a lot of small businesses that weren't online, quickly had to come online, but offering the kind of delivery at the same timescales, three to five working days, etc. We've seen a real increase in almost instantaneously as app-based delivery for smaller super stores. It could be with you in 40 minutes. Firstly, you think that that's likely to be an opportunity for smaller retails on the high seat to boost and support their online sales, which will maybe help keep them on the high street and also on a wider point as well. We talked about empty stores. Do we have too many shops in our high street? Do we have too many retail places? Are we going to need to see almost a reduction and a focus on certain shopping streets in communities? Is that something that you can see going forward? Okay, great questions. I'll take the second one first. I think that we do need to think about the mix of retail proposition. It's not necessarily that we have too many stores. Again, it's about creating an environment that really pulls people in. If it's only retail stores, I'd argue that that's not going to be enough. We need the right mix of food and beverage and entertainment and hospitality and everything to go alongside that. Although I'm on the board of a charity and I'm all for the charity sector, what you tend to find is that when you look at a lot of high streets with lots of empty spaces, they tend to be often taken up by letter of charity stores. That in itself is, although it's great for the charity, it's not necessarily the proposition that the consumer is looking for. We need to really think about the mix of retail and the mix of other propositions that we have there. Remind me what the first question was again. It was just on the basis that online is seen as a danger to a lot of businesses, but there is potential for it to be a supporting factor. I wondered whether we'll move from a well-known online ordering shop to be there the next day. There is now the capacity to order things and have them almost within an hour or two hours from a local supplier through certain delivery ways. Is that something that's an opportunity? Sure, it is an opportunity. Often when I talk to retailers, there's a focus on what retailers call the cost to serve. There's a bit of a mindset shift that retail also needs to make here, which is not only thinking about here and now, but how do we build loyalty? How do we build customer lifetime value? How do we turn customers into fans? Unfortunately, we might not like the idea of having to continue to add all the new propositions that consumers are looking for, but the reality is that there's demand for them. To your point, we've seen this growth recently of what we call on-demand delivery, where there are all the new propositions such as gorillas and get-here that are enabling the grocers primarily initially to fulfil from dark stores that consumers can't walk into, but they're using fulfilment sensors and they're able to essentially deliver products within 15 minutes, half an hour or 40 minutes. I don't think that's going away, but I do think that's an opportunity for local retailers as well. One thing that local retailers and many independents did incredibly well, as well as some of the nationals that Paul was talking about, the importance of Scotland during lockdowns. Local retailers became service providers. They were able to help people who were housebound, who were isolating by delivering products, sometimes not charging them, just getting in their cars and taking them there, because they saw that as an important part of what they had to do to support the local community. As we continue to work from home or we have this hybrid model, that also presents an opportunity for local retail as well. The more we can do to encourage local independent retailers as well as the bigger national chains to offer that type of service, then I think that consumers will engage with that. Good morning to the panel. Thank you for joining us this morning. I've got a couple of questions, but firstly, just to follow up on the questioning that Jamie started there, I'm interested. You've all in different ways talked about the expectation as well as the need to diversify and not just focus on individual or certain elements of retail. You talked about hospitality, entertainment. I think that there's also something around culture and leisure that comes in to being able to pull in people into town centres, pull in and keep them there. I wondered, and maybe Martin, I'll come to you around the barriers to diversifying. In your experience, what do you see the blockages or the things that are stopping people using the bricks that they have in a whole range of different ways? I think that if we look at the actual model, the profit and loss model of a retail business, you're limited to some extent to the hours that you're able to open. I can't remember the name of this business, but I did some high street videos in Cochester of all places in Essex and there was a great little store selling vintage ware, and they set aside part of the store and they will keep going as well as listen to music by products. Then on a Friday night, they cleared the floor and they had a stage at the back and they had a band playing on a Friday night. Our local authorities are enabling retailers to have multi-purpose units because the more we can do with those environments, the more chance we have of encouraging people to spend more time there, to dwell, to come back for different reasons, but to make them more profitable for the retail businesses that inhabit those spaces in the first place. Anything that we can do at a local authority level to remove restrictions is one thing. The landlords have had a big wake-up over the last couple of years realising that their traditional model probably wasn't going to be fit for purpose for the future. I still think that there is a job there to do. Again, I am not, similar to what David was saying, I am not a planning expert, but I wonder if planning needs to be looked at in order to enable those spaces on our high streets to be more accessible to different brands in different sectors, be that entertainment, food and beverage. You need different planning consent, don't you, if you are opening up a restaurant versus opening up a retail store. Maybe there is an opportunity there to make that a little less onerous and a bit more attractive, but ultimately a lot of it comes down to the cost. If the cost is an issue, that is detrimental. The more we can find ways of turning those environments into multi-purpose environments, the more attractive it will be to the people who hold the leases, whether it is a retailer or a restaurant, the more they can do with the space, the more profitable they can make it, the more attractive it is going to be, the quicker we will fill those empty spaces. Thanks very much, Martin. That is really helpful. I wonder if I could bring Paul in on this as well. I am not sure that there is much I can add about the diversification. If I could just pick up the point online, because I think that it is an important point from the previous question, just very briefly. At the co-op group, and I am from the co-op group rather than Scotland made, we have seen online growth significantly. I think that two points, one is that our stores have essentially become micro hubs. We do not do dark stores. All our stuff that we deliver or that is click and collect comes from those stores. Those stores become micro community hubs where people come and have to collect the food that they are dealing with from. The second point is that online growth does not necessarily mean reduction in physical stores. We have seen in a number of stores where we have launched the online platform. We have seen a 30 per cent growth in those stores revenues. We are not cannibalising our existing customers. We are adding new customers and giving, as Maxine and Martin said, that more omnichannel piece. On the cultural piece, the only thing that I would say is that we know that in our stores that are in tourist hotspots and in cultural hotspots, they are very seasonal, and that we need to be able to match them and to be able to complement when those seasons are in. Certainly for the tourist stores that we have, we will double revenues during those seasons. One of the challenges that we have, increasingly, is getting staff and colleagues in to cover those seasonal peaks. It is not quite an answer to the question, but I just want to pick up on that. That is helpful. If I can stay with you, Paul, I am changing tack a little bit though. We have heard quite a lot from witnesses about the work that we are pulling together on this. The tension between the pressure on margins and profitability and improving standards of fair work. We know that there are some horror stories about how hospitality workers and other workers have been treated. Can you give us any suggestions for how the public agencies, public bodies, in our town centres, can support fair work and decent paying conditions? The co-op group is a big employer in Scotland. We employ almost 7,000 people. All our colleagues get paid at least the living wage, foundation and living wage. There is something for government and civic society and public sector to celebrate and halo those businesses that invest in their colleagues. We have paid the living wage, foundation and living wage. We have increased our wage levels for all our colleagues by 25 per cent since 2018. On top of a package, I am sure that Mattine will say that it is absolutely the same for a great company like Boots, on a package of low-interest loans, high-interest savings accounts and fancy etc. There is something about government celebrating and haloing those organisations that do the right thing. A lot of that has got to be, particularly right now. Food inflation has gone up 5.90 per last period. It has got to be about the wages that we pay at one point. A couple of other points, if I might, I am sure will come on to this. The opportunity to invest in those stores in town centres is really important. We know that we have a great example in lockery where we had a store that needed investment. We put the investment in and it is absolutely the same. The opportunity to invest brings vibrancy to those town centres. The only point that I would make is the role of local suppliers. Local suppliers can help to grow the economy. As David said, this is an economic thing. We can grow the economy. We have a very broad range of local suppliers from distillers to bakers to ambient goods. I think that, again, can the Government find a way to incentivise how we can use local suppliers? We know that Scottish members and customers in particular are very keen on Scottish provenance for the guns that they buy. The centre point—I spent 20 years in government before I joined the court in the shaman—is that the Government needs to do more to celebrate and to hallow and to point to the leading practice of those businesses that invest in their colleagues and in their stores and in the communities in which they are. At last, we come to non-domestic rates. I would like to know the witnesses' views on the non-domestic rate system. I would like to comment on the benefits of the small business bonus, which takes over 100,000 businesses out of the system and supports them. Are there reforms needed? What do those reforms look like? David, rwy'n credu ar gyd. If I can pick up on fair work very quickly and I am happy to put something in writing to the committee afterwards. The vast majority of retailers subscribe to better paying conditions. O&S data suggests that in Scotland retailers pay above the so-called real living wage. I admit that it is a little bit above, but it is about £10 or just over. I am right in saying that the Scottish Government's business pledge retail is either the fourth or fifth sector in terms of out of, I think, 18 sectors and sort of being signatories, if you like, to both the pay issue and then all the other aspects that go along with that. However, I think that there are a couple of points that I have just added on that, which is that we need to have a more rounded debate about fair work that is not just binary on the pay rate, because most retailers, particularly our members, offer a whole range of other benefits over and above that. I also think that the other aspect of a more rounded debate is around the cost that employers have to pay on top. We have seen a number of those increase in recent times. We have seen the introduction of the apprenticeship levy. Obviously, employers, national insurance contributions are going up this month. We have seen a couple of hikes in the statutory minimum pension as well over the last three or four years. Of business rates, small business bonus, we have supported that. It is a very helpful thing to many retailers, but also in terms of the wider debate. It is a sort of implicit and explicit recognition that cost is an issue for retailers as well. In terms of other things that could be done in this space, in our submission, we have covered that. For example, as I said earlier, business rates have been reinstated at a 23-year high in terms of the poundage or the tax rate. That is over a fifth higher than it was at the beginning of the last decades. We think that there is an opportunity there. We appreciate that. There is a fiscal issue for the finance secretary if she does anything on that. We think that that is something that needs to be addressed going forward. Obviously, it was Maxine earlier on who talked about the higher property rate as well. The long short of it is that for retail premises and other types of businesses that are subject to the higher property rate, they are paying a slightly higher tax rate than they would do on comparable premises down south. I think that there are about 12,000 businesses in Scotland or premises in Scotland liable for the higher property rate and a quarter of them are retail premises. The SNP Government said that it is looking to restore that level playing field by the end of this Parliament. It will not surprise you to learn that we think that they should go faster on that one as well. That is something that was brought up and raised by the Barclay rates review four or five years ago. I think that they recommended that it was in place by 2020. Martin, would you like to comment on this? Bearing in mind that nobody likes to pay taxes, it is a question of how we collect the taxes and bearing in mind that central governments everywhere are under pressure themselves on their revenues. Absolutely. I want to address that quickly. It is a little bit like looking at how the landlords charge for their leases. If we are going to charge a tax based on the property value, which is ultimately the long and short of business rates, we impede the opportunity for the reuse of those spaces by other retail categories. We do not have a lot of big department stores anymore, so you could have a big store that could be repurposed that could be selling a product at a much cheaper price point. It might be an independent business. It might be made up of lots of independent businesses. We are stifling the opportunities to repurpose those stores by the current system. If we only tie it to the value of the property, we are going to make it far too onerous for smaller businesses to set up their business on the high street. If we find a way of tying it to what they are selling and the profitability and their sales, we can create a fairer environment where those spaces can be used by a broader range of propositions and brands. If you do not mind that, I would like to just very quickly address the fair work question because I did not get a chance to talk about that, and I am quite passionate about it. I started my career in retail 40 years ago. I was surprised to hear that because I only looked 28, but I started my father's retail optical practices in and around Glasgow, study Paisley and other places. Retail used to be a career. I do not believe that retail for most people now who start on the shop floor is a career. I think that one of the gaps is that we probably do not do enough to train and develop our people. I celebrate the co-op on other brands who are paying people the right wages and everything, but we need to go further than that. When you enter a retail business, you could see that there was a career ahead of you. You could see that you could succeed into other roles and that the business would take the time and effort and cost to invest in you. Rather than looking at things like the apprenticeship levy, how about we started putting money aside, be that from the retailer and be that at a governmental level, to encourage the learning and development of people in our retail businesses so that they start to see it as a career and not as something quite transient, which I think for most people today is what retail is. Can I move to Maxine and ask her how should non-domestic rates be reformed if that is the correct route to go? How would you see it? There are obviously difficulties in having a turnover tax in relation to retail. Equally, a lot of people would argue that a property-based tax of some form is still the fairest. Maxine, how would you see it go? I will start by saying that I am definitely not the expert on business rates. I think that David Stewart's answer is probably more comprehensive than the one that I will give. However, I emphasise the point that I made earlier around large retailers being subject to the higher property supplement. Obviously, being a UK-wide business, that means that we have much higher rate bills in Scotland, and given that we have a number of properties that fall under that bracket, it has an impact for us. We definitely welcome the business rates relief that was provided during the pandemic, but the reversal of that just adds to the operating costs in our town centres that we have spoken passionately about how we support our town centres. Overall, I think that if we could lower the burden rates and bring that higher supplement into parity with England, that would support our recovery. I have to say that I am not going to be the expert on what we should do instead of that, but that is definitely the thing that would have the biggest impact on us as a business, but David Stewart has given the wider answer on retail as a whole. Paul, do you want to quickly comment on that? Thank you. Just three points if I might. Number one, in the last 10 years, we have seen a 45 per cent increase in real terms in our rates bill, our rates liability. That is the first point, and as David Stewart said, that is not sustainable, I do not think. The second thing in terms— UK or is it Scotland only? Sorry. Was that across the UK? It is a slightly bigger increase in Scotland across the UK, and it is a 45 per cent increase in Scotland in the last 10 years, partly driven by the revaluatio, because we have a lot of large stores, partly driven by the lack of transitional relief. The second point is that you asked for reforms. I find it peculiar that, and I spent my 20 years in the UK civil service, I was in and around the Treasury for the multiple years. I find it peculiar that the rate system penalises investments being made in stores. For example, if we put an ATM in a store, that increases our rates bill. If we put CCTV in a store to protect customers—and I have given evidence to committees on shop work advance before in support of Fennard Johnson's bill—if we put CCTV in, that increases our rates bill. It seems peculiar to me that investments in store and in the assets of that community—which is what that store is—attracts a greater rates bill. The third point that I would make is that we absolutely have to pay our first share. I agree. I would say that, at the minute, there is a really uneven playing field with bricks and mortar businesses such as us and Boots and others who are paying business rates and online sales on online businesses who are paying absolutely virtually nothing. There needs to be something about levelling that playing field between online and physical retail, which is why we welcome the idea of an online sales tax, which is hypothecated to reduce the business rates burden on physical retailers. I might bring in Alexander, as he is planning to ask about online sales, as Paul has mentioned. We could do that just now. Thank you, convener. That very nicely led into the question that I was going to ask in a second. One solution, as he mentioned, to plugging the gap for any reform in non-domestic rates and levelling up retail playing field is a digital sales tax. Paul, you mentioned that you have seen your online sales jump from £4 million to £200 million. I do not know whether you have been able to share any detail on margins and profitability to give any idea of what scope there is on a digital sales tax, but I wonder if you would like to expand on the prospect of an online sales tax and touch on some of the problems that might arise in trying to implement it. You talked about click and collect, where there is crossover between people buying stuff online but collecting from physical stores. Paul, can I start with you and then Maxine? We have certainly seen our online business increase rapidly since 2019. It has gone from £4 million to £200 million last year, and it is expected to grow further. I will not go into margins, etc., if you do not mind, in a public environment. What I would say, particularly in Scotland, is that all that is fulfilled is quite varied. In some places, we have delivery and golfer who do the last mile. Sometimes we do it ourselves. In our more remote communities, particularly in Scotland, it is often delivered service by the cops. There are lots of different mechanisms for that. In terms of an online sales tax, we are not alone in this. There are a number of big retailers in Scotland across the UK who are in favour of an online sales tax. As I said, I spent 20 years in and around the Treasury in London, so I have some idea about how you construct a fiscal regime. You can have their minimum levels, but you might want to exclude click and collect because it uses a physical building. I think that that is what the consultation that the Treasury in London is running at the minute is about, but there are ways that you can construct this that will enable a revenue-neutral approach by raising money at a relatively low level to 3 per cent on online sales in order to reduce a rates bill by 20 per cent. What that would do is that it would level the playing field between online and physical, number one, and number two, as importantly, and indeed the subject of this committee's inquiry, it will protect the physical town centres that we have seen during Covid. You said that the committee was in Dumfries last week. You have seen how important those physical communities are. Leveling that playing field will help to protect those physical communities. I understand the physical pressures that all Governments are under. That could be done in a revenue-neutral way by an online sales tax with deminimist levels and some exclusions to hypothecate a reduction in business rates. As I said, it is not just a co-op group that supports that. There are a number of big national and Scottish retailers that are also in favour of that. There definitely is a need to recognise multi-channel businesses, and it is not one or the other. It is not bricks and mortar or online only. We have similarly seen a drastic increase in online sales. They have doubled versus what they were two years ago. They now represent 15 per cent of our total sales. We expect that to continue, and we have seen the trend continue. Similarly, we have started to offer in some locations within our delivery service through a partner to ensure that we are meeting consumer demand. We still see a need for that retail experience, so the future will definitely be on the channel. In that context, any kind of debate really needs to be carefully considered on it. We would only support our online sales tax if it did level the playing field. If it did reduce the burden of taxation overall within the retail industry, we would really not need to avoid a situation in which multi-channel retailers have an increased burden and instead look to commensurate business rates reductions. As we operate across the UK, our preference would be that there was a UK-wide decision, and we are currently engaging with the Treasury on that, just to assess the pros and cons of introducing an online sales tax. If I may just reel the film back slightly, in terms of the business rates system, I understand that there are a number of premises and sectors that are exempted from the rates system for very laudable and understandable reasons. To an earlier question, there are various rates reliefs. I understand that a minority of premises pay the majority of business rates, and I think that the Barclay rates review had some statistics on that. In terms of a digital tax, the Lee Sparks-led review of the town centre's action plan talked about other parts of the economy that are going through profound change in terms of digital, so I think that it made reference to things such as Airbnb and Uber taxis and things like that. Retail is not the only sector that is going through that change, but we are in the process of collating member input and views on the Treasury's consultation. I think that the closing date is the 20th of May, so we are bringing members together on that, and we will be putting in a response. I have had a look at the consultation. There are 40 questions on the scope and the design and the potential impact of it. There is actually a heck of a lot involved in that in this day and age. Ordering a coffee online and going in to pick it up could conceivably be liable for these sorts of duties, and then there is all the whole range of issues around how that fits in at the moment for the cost of living. Just to pick up on where we are with that, my sense—and I say that it is a bit early because we have yet to put in a full response—my sense is that there is a diversity of views within the industry on that issue. There is not really a consensus. I am very happy to share our submission with the committee once we finalised it. Where there is alignment and consensus on property taxis need to be reduced. I think that the thing that strikes me about the Treasury consultation is that there is very explicit tie in that to cutting business rates. However, that is in England. As I understand it, any receipts—if the tax was brought in, the receipts from that would be barnatised for the three devolved Governments. I have read the framework for tax from the Scottish Government. I have read the time centre's action plan that was published a couple of weeks ago. There is no mention in there of what would happen to the receipts. Paul obviously talked about the need to be used to cut business rates. I am not any wiser from reading those two documents as to what would happen with the receipts north of the border. I think that I am right in saying in the SNP manifesto that there was reference to using the cash to support city centres and perhaps town centres, but I think that it would be useful for this committee to try and get some clarity on that issue going forward. If there was indeed a digital tax, would the revenues be committed to cutting business rates north of the border? There is another question, which is what would that reduction in business rates look like. I am guessing that people like Paul and Maxine were quite keen that their firms and perhaps larger firms were to be recipients of that, but I think that that would be something very specific that the committee could, if I can be so bold, ask ministers about over the coming weeks. I am now going to hand over to Gordon MacDonald. I think that we are moving into this area of questioning. I was wanting to ask about how we tackle the blight of empty retail units. We have already identified one issue, which is absentee landlords, but Martin Eeverry touched on some of the areas that I want to ask about, which are commercial leases. What are the stumbling blocks within commercial leases that stop premises being brought back into use? Also about the town planning classification system, what changes need to happen to local development plans, etc. If I could go over to you, Martin, first, and you could highlight what we need to change within commercial leases. I know that you have touched upon, you would like to see turnover-related leases, but a lot of companies are tied into leases at the moment, so how do we unblock that situation so that we can bring property back into use? I think that we need to look at shorter term leases. I think that we need to do what we can to encourage landlords to recognise that the days of being able to get somebody to commit for 10 or 20 years are gone. How do we enable other retailers to have pop-ups, for example, to use the space for a temporary period of time, which we have seen the increase of now? That is a great way of encouraging larger businesses to take smaller-format stores, but also to encourage independent retailers who, historically, might be reluctant to move from the one or two stores that they have because of the onerous nature and the cost of taking on additional leases. We can make these spaces available on short-term leps and short-term leases, and landlords provide that flexibility. I think that they will find that they will fill those spaces much quicker, they will be filled more readily and for longer periods of time. However, as I said, it is helping them to understand that the days of 10, 15, 20, 25-year leases are gone, in my opinion. I think that that is one thing. I am not massively close to the planning and consent side of things, but I think that anything that can be done to ensure that essentially a space can be readily made accessible to a brand, whether it is a retailer, food and beverage, a big increase in gyms and fitness centres, well-being, health and well-being, opening up on our high streets. Anything that we can do to encourage those other sectors to take these spaces and make it easier for them to remove as much red tape as possible, which also helps the landlord to make those spaces available, is going to be the way to go. The quicker we fill them, the quicker we encourage people to come back to the high street. The problem is that what has happened in the past five years, and you can see that in certain town centres where, by the time you get more than one or two or three or four doors or spaces that are empty and vacant, all of a sudden people stop going to that part of the high street. It becomes quite difficult and challenging to convince them to come back, so it is really important that those empty spaces are filled and that we make it as easy as possible for the landlords to do that. If I could bring in Maxine Boots in recent years, it has closed a number of stores across the UK, and I am just wondering what difficulties that Boots has had in getting out of these leases. You also talked about town planning needs to be more agile, and I am just wondering if you could expand on what you meant. On the matter of closures, as any business would, we would constantly review the locations that we are in. The lease holds would definitely have a factor in that, and certainly we have seen changes within our consumers, both from a pharmacy and retail perspective. Certainly in Scotland, we have not had a huge amount of closures, which is really encouraging. We have definitely been able to protect our businesses with some of the things that I talked about earlier, such as online shopping, warehouses, etc. What was the second part of your question? The evidence that Boots submitted said that town planning needs to be more agile, and I am just wondering if you could expand on what you meant. Essentially, the point that I alluded to earlier is that there is no one-size-fits-all, although we are almost represented in every town centre, but there needs to be a recognition that retail in some town centres has already moved away from the town centre. Therefore, the out-of-town locations or the edge-of-town locations can be just as big a focal point. It is really how we are able to influence that on a local level. I think that the other thing that I alluded to earlier is how we approach it in a diverse way. Certainly within our four walls, we have tried to diversify. We are looking at different opportunities to become an anchor in the community. We have the Ask Annie initiative. We have Macmillan support for cancer patients. We have a hygiene bank. We have lots of different reasons why people would come to us other than shopping. How we can encourage more of that in our town centres and understanding of perhaps third sector or different reasons to come in is really important. Thank you very much. How do we change the planning system and the consent system? I was looking at Edinburgh City Council and they have got over a dozen classifications. How do we encourage the use of empty premises in a situation where there is a long, windy and expensive process to go through? I must admit that the planning system is not my area of expertise, but anything that is Martin said that can make it easier for businesses to trade and take up the opportunity to do so the better. We capture quarterly data on shot vacancies. The most recent figures covering the tail end of last year improved, but that was in the lead-up to Christmas when there were more pop-up shops and all the rest of it. I would go back to the point that I made earlier on about building standards and building control, which is something that I regularly hear from retailers around. Can we make it more flexible? Can we make it less time consuming to get those permissions and those consents and the building warrant in order to get the store up and running as quickly as possible and generating revenues? In terms of the planning system, it is perhaps one that has been raised with me less in recent years because there are retailers who are expanding their property footprint, but perhaps less so than there has been historically. We had that space race, as it was called, maybe 10, 15 or 20 years ago. Those days have somewhat ended, but a system that is flexible and able to respond to changes is ultimately what we are looking for. I am also interested in the buildings themselves and the use of the buildings. We were very struck in Dumfries when we were there that it is a large town, but there were vacancies across the second and third floors of all the retail, whether they were filled or not. If we want people to live and work in the town centres so that they get a great experience as more customers because they are on the doorstep, how do we tackle those vacancies above the first floor? Maybe, Maxine, if I come to you first, what the experience of Boots has been for your stores and what do you do with the properties in our towns that have the second and third floors? Just-in-time supply means that, previously, if they had been used for storage, they would not need to be used for that. What is preventing you from helping to enable them to become, for example, residential or used because it might be in your interests now that they are used if you want people to live in town centres? Our properties are primarily sold, so it would be a landlord issue in most locations. However, I recognise that we have overspaced retail units in your question. Certainly, Dumfries is an example that has two floors. We would open both as retail units, but there are also large staff areas. However, what we have done with our online business brings that to life. I cannot remember who it was earlier that mentioned dark stores. We do not operate dark stores, but we have online warehouses in some of our retail units. However, that is within our own control. As I said, the biggest issue for us would be where we have adjacent properties, properties above our units that are least hold, and unfortunately, they are outwith our control. However, it is certainly within our own estate where we have the opportunity to diversify into online warehousing. We saw huge success on that. Martyn, if you can think through the implications of what we do with landlords that we can contact, absentein landlords but also with leaseholds, how do we—is there any creative way of incentivising the use of the upper spaces that would actually benefit the retail underneath? From a retailer point of view, bearing in mind what I said right at the get-go, which is otherwise, if it is not, why do we go there? If it is more convenient, because we are living there, we are fine. If it is more convenient to buy online, we buy online. Martyn talked about the use of the stores for clicking collect and using them as fulfilment centres is one thing. However, let us make them more experiential. What could we do if I were Boots? Maybe I would be thinking about creating events on the upper floor of the store. Maybe I would clear away some of the floor space and I would have people in and talking about health and wellbeing. I would encourage customers to come in and spend some time there and learn more about how they can improve their health and wellbeing through the vitamins and supplements and all the other great products that Boots has to sell. What could we do to turn those environments into something that we really want to go and spend time in? That is what I would be doing, because then you encourage people to come back, you encourage well time and, of course, people spend when they are in there as well. I do not know what landlords can do to contribute to that, but they would certainly be interested in that. Even if it was a pop-up, if they thought that, ultimately, that was a concept that was going to encourage footfall and had a service-led proposition. I guess that one other way of thinking about it is that traditionally retail was about selling stuff. I think that, in the future, it has to be much more about being a service provider as well as selling the products that we want to buy. What could we wrap around products that we sell to make it a more holistic approach and more engaging experience for consumers? To be fair to Maxine, she explained the work that we are doing with Macmillan and others for service provision. David, can I maybe ask you to take a future think a bit about this as well? I know that businesses are so focused on running businesses that have a lot of pressure, especially with the cost of living crisis that can affect people coming in, but if we want our town centres in particular to be places that people will spend time in, is there something that can be done, particularly with landlords? Is there something that your membership might have little influence on that, but they have an interest in that? Is there something collectively that we can do to bring vibrancy back into our town centres above the first floor? What is preventing your members from doing that? We talked earlier about the various strategies that are out there and at the heart of those strategies is the whole issue around collaboration between the public and the various private stakeholders. I hope that that is something that will be taken forward. In terms of the retail strategy, they will set up an industry leadership group. I am not fully across how that will be made up. I am not sure what the equivalent will be in terms of town centres and city centres. Certainly, we support more living above the shop, as it were, and using those spaces, I guess that there is a broader question around what that means for public services. If there are more people living in our towns and city centres in terms of schools and GPs, does that actually help those to survive and have sufficient customers for want of a better phrase? Do we need additional capacity in terms of public services? Martin talked about retailers using those spaces. Obviously, experience or events or theatre was something that was talked about in the years leading up to Covid. That is one of the great hopes for the industry. It has been somewhat kiboshed by Covid in trying to avoid people coming together and all the rest of it. However, pre-Covid, I visited a well-known book retailer in Glasgow two or three weeks ago, and they are restarting their programme. They have upstairs space, and they are restarting their programme of bringing the authors in to do book talks and music nights and stuff like that. There is a very prominent department store here in Edinburgh, which certainly pre-Covid did cinema nights. Who knew? There are lots of those sorts of opportunities. I think that Martin is absolutely right. Businesses need to think more holistically about that, but at the same time, you are also right in the sense that the travails of the past couple of years are trying to respond to the rules and regulations around Covid, how retail is changing, trying to grapple with all the pressures at the moment. One constant of the past few years has been the enormous disruption and enormous change. That has been the constant for the industry from on-off Brexit and no deals, the beast from the east, the rise of online, the Covid pandemic and the cost of doing business crisis and the cost of living crunch. It has just been absolutely relentless. To try and do more over and above providing quality service, quality prices is challenging, frankly, for most retailers. However, if they can lift their eyes, if they have the opportunity to lift their eyes a bit, I am sure that they will be up for taking up the ideas that Martin has articulated. On landlords and the relationship of your members with landlords, what is your overview of what landlords and investors are and what properties your retailers occupy? What do you think that the pattern of that is likely to be going forward? Clearly, if they are sitting on properties for a long time and thinking that they are going to come back to a higher level in the future, that prospect is perhaps more diminished than it has ever been. What are your members thinking about that? What are your members telling you about that? One of the challenges early on during the past two years has been that there were large swathes of the industry that were not able to open as part of the national effort to combat the Covid virus. We had a couple of Scotland-wide lockdowns and local lockdowns in west-central Scotland. Those were times when a lot of retailers, so-called non-essential retailers—hopefully we will not go back to that terminology—were shops that were not able to trade and were far open in revenue. They looked to their landlords to delay or defer payment of their rents, let alone government in terms of the rates support. The vast majority of the feedback that we got from our members that landlords were up for those discussions were obviously some that were less keen on that. My understanding is that the majority of cases landlords have been flexible. Part of the challenge now, of course, is that retailers are having to pay back those rents that were not paid during that time when they were not able to trade. The whole issue around the plethora of costs and cost pressures, whether that is taxis and regulation coming from government or supply chain pressures or commodity prices, adds to the mix about how challenging it is at the moment. However, I understand that the vast majority of landlords have been good to work with. They understand the pressures that they have been facing the industry and want to get a good resolution at the end of the day. I think that there have been some changes at the UK level in terms of some of the processes around how you resolve some of the difficulties. Serendipity always comes around when I ask a question at the end in that a panelist inevitably leads on to the area that I wanted to explore. David, you have just done so perhaps for yourself and Martin. I have been wondering, I have been listening to this because there has been so many different areas where we have touched on the wider economic macro environment in which we are aware of significant challenges. Reading one of your blogs, Martin, in your site, where you are quoting the level of consumer debt—or I think that you have taken it from Ruth Gregory—how much that had risen in Q1 of this year. It is an open question perhaps to David and Martin initially, but if other panellists just want to finish off, have we, in terms of the terms of reference and scope of this inquiry, reflected enough on the challenges for consumers, given exactly what you say about the energy crisis, the cost of living crisis, Brexit is starting to really hit home now, wage, depression and so on? It is all very well having these grand ideas and reflecting the business owners, but if consumers do not have money to spend, we need to factor that in. Perhaps, Martin, I can see you nodding. Maybe you would like to come in first since it was your blog. It is a great point. Obviously, to all the points that David has articulated, it has never been a harder time. I think that, although retailers are incredibly squeezed, we all need to do everything that we can to support people at this moment in time. Unfortunately, as is often the case, when times get tough, it is the people who are at least well off who are the hardest hit. We need to look at that, and we need to address it. Interestingly, over the pandemic, we have never saved more money than we have ever saved previously, because many of us were going into work and were going to the office, and some of that pattern of behaviour has continued with the hybrid work-from-home model. Household savings have been significantly higher than they have ever been previously, but my instinct is, at the moment, because of the massive concern—not just the media height but the real concern—of the cost of living increases, energy costs, supply chain issues and everything else. People are squeezed and reluctant to tap into that. There are certain pockets of society that probably have access to cash that will keep that for their emergencies and might be well needed to pay their fuel bills over the next year or two. We need to look at everything that we can do to help, because at the end of the day, people need our help. There are a lot of people who are marginalising society right now who are below the bread line and cannot afford to put food on their table, so what can we do to help them? What can retailers do to get back to the neediest? On that point, fiscal drag is going to kick in as well. I suppose that is what I am probing. Have we considered that enough in the visioning that we might choose to do around town centres when you look—I agree with what you are saying about multi-unit flexibility and the move away from FRI leases and so on, but there is a cost associated with that flexibility for retailers and quite often the business model that they may choose to adopt would be targeting a certain sector or certain socioeconomic profile. I suppose that I am trying to join the dots in the complexity of that and the cost, because that represents a risk for retailers as well. We have challenges for certain sectors of our society. You are absolutely right. Of course, there will be fiscal drag and the big unknown question, the million-dollar question right now is for how long will we have that? We do not know the answer to that. My instinct is that we are in this two-year cycle, so I do not at the moment see an awful lot—I hate to be pessimistic—but I feel that we are going to be in this probably until the end of next year. From 2024 onwards, I would probably see a brighter time, but again, Ruth, a colleague on the retail think tank, I believe that they have forecast increases in interest rates up until October this year. Of course, that automatically has a further knock-on effect with consumers as well. I do not know that you necessarily would change what I was suggesting. At the end of the day, we are going to come out of that. The opportunity for anyone often is for retail businesses to be in times of adversity. I think that there are a number of cases of retailers who pivoted really well during the pandemic who had to fundamentally change their business model and who had to start to rethink what is the use of the store. If we cannot let people come in, how do we make sure that we can still use the store and they started using the store for fulfilment of products more locally? I think that retail is a very adept at adapting to the changes, but it is important that they put in place the building blocks now that make them—put them in a stronger position, if you like, for when we come out of this current economic crisis, however long that happens the last week. David, any last comments or any other panel is just about are there things that we have not had the chance to bring out today, given the economic crisis across a range of areas that we are facing? Anything else that would just be useful for our purposes? I think that there is a heck of a lot in that, if I may. Just to pick up a couple of things, I said early on that our data that we published on retail sales in Scotland last month for the first time is back up to pre-pandemic levels, but I then caveated that by saying that there is a big question mark as to what demand we will look like from consumers going forward. We also publish a shop price index each and every month and shop prices are at their highest level for 11 years. They are up 2.1 per cent, which is quite modest compared to overall inflation, but it is in the interests of retailers to try to keep down prices to attract customers in inflation. As Paul said earlier, inflation is a touch higher when it comes to retailing by the nature of it. I probably err on the more optimistic side, in the sense that at least retailers have the ability to trade at the moment. They have not had for large swathes of the past couple of years. As we have seen over the past couple of years, there is a pretty resilient and agile bunch. They are good at responding very quickly to not being able to trade and open their shops and getting online and finding new and innovative ways to reach their customers. I am pretty optimistic in that sense, but I think that Martin is absolutely right that it will be another difficult period. Just like consumers have debts, as we talked about a moment ago, retailers are trying to pay back the rents that they have built up and accumulated over the past couple of years. There are various tax deferral schemes that they are having to pay back. At the moment, there are Covid loan schemes, which I cannot remember off the top of my head, which are also having to be paid back as well. I would round off with a plea to Governments and Parliaments here and Westminster, to give the industry a bit of a chance and a breathing space over the next couple of years as it is trying to recover and get back to some sort of health. David, if we have issues that have been raised right at the end of the meeting, if there is anything that you would like to send to us additionally about the cost pressures coming from the pandemic, that would be helpful if you were able to do that. I bring this session to a close. We will have a brief suspension before the next panel comes in. I would like to thank the four panel members this morning for their contribution. That is very much appreciated and I will now suspend for a couple of seconds. May I now welcome our second panel this morning, Ruth Boyle, policy and policy manager from Close the Gap. Joanne Cairns, head of research with USDO and Brian Simpson, industrial organiser at Unite Hospitality. Welcome to the committee this morning. Can I ask members and witnesses to keep their answers short and concise as possible? If I may best start with the first question and if I address it to Joanne, if you would like to have a go, Joanne, it might be outlining for us the impact of the pandemic on retail workers in particular and how retail has changed in recent years. I might be also interested if you could give us an idea of the size of the sector in Scotland. I think that the co-op group said that they employ 7,000 workers in Scotland. Joanne, if you want to say a wee bit about what the sector looks like in Scotland, what the size is? Thank you very much and thank you for inviting us to give evidence today. In terms of the retail sector in Scotland, as has been recognised in the strategy from the Scottish Government, it is a very important employer in Scotland. 240,000 people work in retail in Scotland. It is the largest private sector employer. In particular, it employs large numbers of women and young people. Usdor has around 40,000 members for Scotland. A vast majority of our members do work in either the retail sector or in a closely related sector such as transport distribution. The future of the retail sector is very important to our members. The pandemic has had a big impact on our members pretty much wherever they work. For our members working in non-food retail, the impact of the pandemic in terms of lockdowns and the shift to online retail has had an impact on their job security in a number of cases. You will be aware that we lost household names such as Debenhams and Arcadia from the high streets in 2020 and 2021. In Scotland, there were 15 Debenhams stores, which led to around 700 direct job losses. However, those anchor stores in town centres often make contributions to footfalls, so there is a wider impact. The figures from PricewaterhouseCoopers showed that four shops closed every day in Scotland in 2021, with a net loss of 751 stores during the year compared to a net loss the year before of 652 stores, so that accelerated closures. In terms of the impact on our members, a large number of our members continue to work throughout the pandemic because large numbers of them work in essential retail, so they were key workers working throughout. As you can imagine, that was extremely challenging and difficult for many of our members. One of the worst aspects for our members was an increase in violence and abuse. Having to implement social distancing measures and face masks and sometimes having to deal with product shortages often led to customers taking out their frustrations on shop workers themselves. That has been and continues to be a major challenge because it is not solely pandemic-related, although that did exacerbate it. It continues to be flashpoints for violence and abuse, particularly around things like age-related sales. That is a continuing issue for our members. Ruth, do you want to comment on that? Perhaps you referred to the job losses that have been within the sector due to the closure of some large stores. Do you want to talk a bit about that and about changes that we are seeing in the sector, about where we see a growth, what kind of jobs we are seeing a growth in and what areas we are seeing reductions in? First of all, thank you very much for inviting close-agaptive evidence today. We are delighted to be here. As we heard in the session this morning, the pandemic exacerbated pre-existing trends that were happening within the retail sector. We see growth in online sales as a percentage of overall sales. We are also interested in how the pandemic might interact with automation in the sector. Joana has highlighted some of our concerns around an increase in harassment. That was experienced by workers during the pandemic. Other research by Ustall has also highlighted that there were issues for pregnant women and women on maternity leave in the sector during Covid. Research by Ustall found that there was a lack of understanding on the behalf of employers on pregnancy and maternity rights. There was a failure to conduct risk assessment for workers and a failure to find appropriate alternative work for workers. In terms of the structural shifts that Covid has exacerbated, online sales is one of the pivotal ones. What we see from a rise in online sales is that there is likely to be a decline in customer-facing roles of which women account for the majority. Looking at the labour force survey data for September 2021, we see that women account for 64 per cent of sales and retail assistance and 73 per cent of retail cashiers and checkout operators. Those roles are on the shop floor interacting with customers. Although those roles are likely to decline, we are likely to see an increase in new roles around logistics and fulfilment and technical roles that are associated with online retail. Those roles are more likely to be held by men. In the longer term, what that could do would be to change the overall gender breakdown of the sector. At present, we know that more than 60 per cent of the retail workforce is female, but over time that might change. However, because of the changing nature of work in retail, what we really need to see is gender-sensitive upskilling and reskilling support for those women who are at risk of job disruption. We need skills support to allow women to move into those high-growth jobs within the retail sector and also support for women who may have to leave the retail sector because of declining jobs. As Joanna outlined, we saw that there was the closure of prominent stores such as Debenham's and the Arcadia group. There were some retail stores' closures that were anticipated, but the pandemic definitely sped up the process. When we look at the loss of jobs that stemmed from Debenham's and Arcadia across the UK, we know that 25,000 jobs were lost in those stores alone. Estimates claim that around 80 per cent of those jobs were held by women, so that means that the closure of those stores alone resulted in the loss of around 20,000 jobs for women. That underscores the point that women's jobs in retail are at disproportionate risk when we see the rise in prominence of online retail. Overall, I think that rising online retail is likely to create jobs for men but result in job losses for women. On automation, the British Retail Consortium estimates that around 60 per cent of jobs in retail are at risk of automation and the ONS estimates that around 65 per cent of retail cashier and checkout operator time could be automated. Again, those are jobs that are more likely to be done by women. There are concerns that Covid might have increased the pace of automation in the retail sector, because when we look at automation historically, we see that it tends to happen in bursts, often in the waves of economic shocks. In the context of the Covid crisis specifically, we see that consumer preferences may have changed. As a result of social distancing and the fear of contracting the virus, consumers may come to prefer automated services as opposed to face-to-face interactions for the foreseeable future. That means that businesses now have an incentive to invest in new technologies that perhaps did not exist before. I want to highlight that retail has a high outflow into unemployment. That has real implications for our employability and skills provision. We need to think specifically about how those policies and interventions are meeting women's needs. We know that generic interventions merely reinforce occupational segregation and women's disadvantage in the labour market, so when we know that women's employment in retail is at disproportionate risk because of the structural shifts in labour market changes, we need to make sure that our policies are meeting their needs. We also know that low-paid workers are more likely to be in in-work poverty and, indeed, women across Scotland are more likely to experience in-work poverty in men. Because retail is low-paid work, those women who are experiencing job disruption are less likely to have savings to fall back on if they have a disruption to their working hours or earnings. That has implications for women's financial security, but given the close links between women's poverty and child poverty, that could have implications for Scotland's ability to meet their child poverty targets, too. Covid has exacerbated pre-existing trends that were happening in the retail sector, and we are concerned because those trends are likely to hit women's employment the hardest. I will bring Brian in now. Brian, if you have anything additional to say to that question, but I also want to ask the previous panel that referred to the retail industry leadership group, which, from what I think it was David who talked about in the first panel, I got the impression that the membership of that has not been sided yet, but I would be interested if the unions had been approached or had any knowledge of the retail industry leadership group, or if you have been asked to be involved in that in any way. Thank you for having Unite hospitality here. It is a pleasure to be part of this evidence session. To my knowledge, Claire, and that knowledge may not be as deep as we would need it to be, we have not been approached. Unite has not been approached to be part of that. I have to give a disclaimer that I am representing the hospitality sector. We have got 27,000 members across the hospitality sector. No, we have not been approached to be part of that. Do you want me to talk about Covid and how that has affected the hospitality sector specifically on the back of that question? If you would like to have anything additional to what Joanne and Ruth have said, and it might be that the industry leadership group is just at a really early stage and that nobody has been invited to take part yet, that is something that the committee can follow up with. Just to demarcate the two sectors, a lot of people think about bars, restaurants and hotels, but for us that is a very separate sub-sector within the Scottish economy. The impact on hospitality has been very different for Covid, so I will point out that I am not just repeating what the other panellists have said. Just looking at the impact, first and foremost, forth, which is the most trusted data software in the industry, they estimate that the workforce in hospitality—that is bars, restaurants, hotels, cafes and casinos—shrank by 26 per cent in 2020 and 2021. Across the UK, that would be 650,000 job losses. In Scotland, that would equate to 58,000 job losses. It is not to play top trumps about which industry has been affected worse, but hospitality undoubtedly has been massively affected. Similar to what Ruth and Joanne have pointed out before, it is a sector that is pervasive with things such as low pay. 60 per cent of the industry has paid less than the real living wage. Continued precarity, 25 per cent of the industry is on a zero-work contract, which is three times the national average. That recruitment crisis that really started post Brexit with the migrant workforce reduction has continued massively and exasperated massively after Covid. We are seeing on top of the cost of living crisis a lot of workers not even being able to make ends meet because they do not have the hours that they can rely on and they do not have the wage that they can rely on. I am conscious that we are short of time, convener, so I will leave it there just to point out that we are representing the hospitality side of that retail sector. That is helpful. I will move on to Fiona Hyslop to be followed by Colin Beattie. Thank you to ASDAW and UNITE members for what they did during Covid. Your members will be very close to customers and will have a view. Indeed, as part of any industry leadership, they will inform you as to what you think the sector will be like if we want to see vibrant town centres that have vibrant retail as well as hospitality. I know that other members will go into individual experiences for their members, but to give you an opportunity just now to talk about what the ingredients would be and how you see the future of town centres. One of the lessons learned from the pandemic was the importance of retail in our communities because shops that were able to stay open and needed to stay open—for many people, that was the only interaction that they had with anybody during the pandemic. I think that role of retail as a part of the community, a major employer in a lot of areas as well, and improving intergenerational communication, reducing isolation and bringing communities together is extremely important. I think that we need to have a town centre strategy and a retail strategy more generally that values the importance of face-to-face interaction. I know that the supporting experiential retail is also investing in customer service skills and investing in skills framework work or retail workers, because often retail workers are overlooked in training opportunities and skills. There needs to be more emphasis on the importance of dealing with a human. We know that that is still very important to a lot of people. We know that as much as there has been an increase in online shopping, there are still many people who do prefer to deal with a human being and see somebody. 46 per cent of customers want to shop on the high street rather than online, according to a study that Deloitte Digital Scotland released last year. A quarter said that online shopping has not met their needs. As much as it is important that we look at making our high streets vibrant and looking at a future, how our high streets will look and how we will use the space on our high streets. Often the discussion around it assumes that high street retail is a lost cause and that we should look for new uses for our high streets. Actually, there is still a role for high street retail and that needs to be at the centre of the retail strategy. I just wanted to come back on the retail industry leadership group to say that my colleague Tracey Gilbert, who is our Scottish regional secretary, is involved in the retail strategy steering group. As far as I am aware, the membership of the industry leadership group has not been confirmed yet, but we are hopeful that Osdor will be involved. We think that it is important to ensure that there is a worker voice in that. Thank you, Joanna. Of course, it is a retail industry leadership group. Brian, we have heard evidence that it is the experience of the town centres that matter. Hospitality is the ultimate in terms of experience, I suspect. If you want to give any views as to how you see that in the future to help our town centres in particular. I heard quite positively from David and Martin before that bars, restaurants and cafes are essential to a thriving high street. Obviously, what I am going to say is that, for a thriving high street to succeed, it needs to be sustainable. It needs to put money into the pockets of the workers, who, of course, are customers themselves. I was looking at the strategy, the retail strategy, getting the right change means creating better jobs. Obviously, first and foremost, that means real living wage jobs. I am pleased to hear that the Scottish retail consortium and representatives of some of the co-op do support that Scottish business pledge. In the policy response, we are being asked to look at how we would create a living and resilient town centre. First and foremost, we have to pay them the real living wage. We have to give those workers the security that they need. By that, I mean contractual security. I made reference to just how insecure the hospitality industry is for workers. 25 per cent of those workers do not know, one week to the next, how many hours they are going to get. They cannot plan, they cannot get a lease on a tenancy agreement, let alone a mortgage, because they do not have secure contracts. In order to have a thriving high street and a thriving town centre, we need living wage jobs that are given the security of guaranteed hours, but also with the sustainability that comes from someone said earlier, giving people promotional opportunities that they see hospitality as a career and not simply as a job that you do in your twenties while you're at university and you move on to a career. We really want to make hospitality a career for people, and the best way to do that is for them to be able to make ends meet while doing that job. Just finally, sticking with you, Brian, unfortunately we've seen many hospitality venues saying that they can't open certain days because of the shortage of staff. That may be an opportunity to drive up wages, etc., but the shortage of chefs or the shortage of labour has obviously had the impact of Brexit starting to impact there. Are you seeing any change more recently post Covid? Massively, Fiona. We surveyed over 600 chef members back in October last year. 48 per cent of them said that they'd either left the industry or they were about to in the next few months. If that were to come to fruition, which it probably has, if 50 per cent of chefs are leaving the industry, those are the highest trained or the longest to train. If 50 per cent of chefs left the industry, it would collapse. What we are seeing post Brexit and then post Covid is a huge recruitment crisis. As you say, that is an opportunity to drive up wages because, frankly, the best way to incentivise those workers back to attract the very best talent in the industry is to pay them the wage that they deserve and to give them the security of contract. What was the second element of your question, Fiona? I'm very conscious of time, so I'm happy with what you've provided there, Brian, and come back to that, convener. Colin Beattie, to be followed by Michelle Thomson. Let me take the opportunity to pay tribute to the retail workers who worked so hard supporting us during Covid. I remember a few years ago—it must be three or four years ago now—this committee, or its predecessor committee, took evidence on a bill that was going through Parliament to support retail workers who were suffering harassment, mainly in convenience stores and so forth. John did touch on age-related harassment when he was speaking earlier on, and the idea was that, by strengthening the support for retail workers in this way, it would reduce the harassment that workers were encountering. How big an issue is this still? Has there been improvement? I realise that there has been distortion through the Covid period, which might make it a wee bit difficult, but has there been a reduction in the harassment in the retail and hospitality sectors? Thank you for raising that issue, because, as I said earlier, it's an extremely important issue. Following the introduction of the protection of workers act in August last year, which was Daniel Johnson's MSP bill, which was a great step forward in recognising the impact of abuse and violence against shop workers by making it a stand-alone offence, there has been almost 300 cases of abuse that were recorded to the police in the first three months following the introduction of that new act. However, we know that there is still a massive problem with underreporting, because retail workers don't believe that it will be taken seriously, and they don't believe that there's this idea that it's part of the job. That's something that we're really trying to make clear to customers and to staff that violence and abuse is never acceptable. According to our most recent survey on that, 90 per cent of shop workers experienced verbal abuse at work last year. 64 per cent were threatened by a customer, and 14 per cent were physically assaulted. It's still extremely prevalent, and there is still much more that needs to be done, but the protection of workers act is an important step forward in that. John, do you think that has the legislation had any impact on this? Well, we haven't had the opportunity yet to assess that, so our survey results relate to 2021, so we're hoping to do some more survey work on that later in the year so that we can get a better picture of it. Brian, maybe you'd like to comment on the hospitality sector. Thank you, Colin. That's a really good question, because, echo what John is saying, second or maybe third to getting the right wage and getting security of contracts, the number three biggest issue for hospitality workers is the abuse that they've got to face, but it's not just bearable, it's not just physical, it's a lot of its sexual harassment as well. We've done a similar survey of 1,200 of our women workers in bars and restaurants. Eighty-seven per cent of them had experienced sexual harassment during the pandemic. We've launched a campaign called the Get Me Home Safely campaign, which primarily looks at getting workers home safe at night past 11 o'clock, past the last train or bus. We are currently trying to lobby local authorities to pass that to ensure that the licensing objectives allow or encourage employers to pay for transport home. For example, we're pushing for proactive sexual harassment policies so that women and men are protected in the workplace from the moment they step into the workplace, but also in order to get home safe at night. It's a huge issue, and it will continue to be an issue. It's not just a Covid issue, it's something that will continue in an industry, frankly, that's fueled by alcohol and sexism within the industry, so yet it's still a big problem. Ruth, is there anything that should be done to improve the situation in respect to harassment? Is there anything that the Scottish Government should be doing more than it's doing now? I'm glad that Brian Bray raised the issue of sexual harassment at close the gap. We have a particular interest in the experience of sexual harassment of women working in retail and hospitality settings. There was a 2019 survey by us all that found that 70 per cent of women who were working in retail had experienced sexual harassment at work. That is concerning because sexual harassment is a form of violence against women, it's a violation of women's human rights and their health and safety protections and it's also a contributing factor to the gender pay gap. I think that there are things that both the Scottish Government and employers can be doing better. As Joanne highlighted, two thirds of workers who had experienced sexual harassment at work didn't report it to their employer. That points to negative employment practice around understanding what constitutes sexual harassment and how they should respond to disclosures. In terms of what retail employers could be doing, similarly to what Brian Bray outlined, we have called for employers to develop and implement a robust sexual harassment policy that recognises the gendered experiences of sexual harassment. They should also be taking practical steps to prevent sexual harassment in the workplace. That may involve things such as building capacity in line managers so that they understand sexual harassment and that they can appropriately respond to disclosures and around awareness-raising about what is sexual harassment in the workplace. We need that because we know that there are higher rates of sexual harassment in workplaces where nothing is done because it signifies that this behaviour is normalised and that it will be tolerated. In terms of actions for the Scottish Government, I think that what has been outlined already is that the Protection of Workers Act will help to protect some workers in certain settings. However, what we also need is the reinstatement of protection from third-party sexual harassment in the Equalities Act. The UK Government has committed to doing that, but there are no timescales for that work. I think that there is a clear role for the Scottish Government in working closely with the UK Government to make sure that that happens on a timely basis. I hope that we will come on to talk about the retail strategy in a bit more detail. However, I think that there is more that could be done around harassment and, in particular, sexual harassment within some of the initiatives that are announced within that strategy. How will sexual harassment form a core aspect of the fair work agreement, for example, and the wider fair work employer support tools that will support the implementation of that retail strategy? That is a very prevalent issue, and I think that it is really important that we are taking that forward as we implement the retail strategy. I am going to bring Jimi Hulker to the end for a supplementary question. Thank you very much, convener. It was a very quick question to Joanne. You talked about the protection of workers and the number of cases that have been forward. I think that you said 300. I was wondering what the outcomes of those had been, whether how many convictions there were, or whether they progressed enough. I am afraid that I do not have any further information on that. This was a report that was published by the Scottish Business Resilience Foundation, and it did not go into detail about convictions, but that is certainly something that we are going to be following up on and watching closely. Good morning, panel. Nice to see you all. Perhaps following on from what we have been discussing around sexual harassment and therefore looking more at the gender pay gap, which we have had some insight into in your introductions. I suppose that I would like to understand a bit more, because we can all see that there is a lot of work being done in this. The Scottish Government is a fairer Scotland gender pay gap action plan and so on, but I am interested to understand what more practical solutions can be made, and specifically by the Scottish Government bearing in mind that there are systemic issues, particularly prevalent in retailing and hospitality. I think that we all understand that. Give us your bright ideas, in other words, of things that the Scottish Government can do as compared to those areas in which we need to rely on the UK Government. Yes, of course. First of all, we always ground our analysis of what could be done on the gender pay gap in the fact that the majority of the causes of the gender pay gap are not unlawful. They therefore sit outside of the remit of employment law, but there are a number of things that the Scottish Government can do that we are currently within the powers of the Scottish Government to enact immediately. We are very pleased with the publication of the first-ever gender pay gap action plan, and I think that that would highlight the commitment to taking action on the gender pay gap action plan in Scotland. However, I think that that plan is continuing to have to do a lot of the heavy lifting in terms of how we are prioritising action on the gender pay gap. If we look at the retail strategy, it links to the gender pay gap. However, there are not any specific actions within that plan that are explicitly designed to promote fair work for women. I think that merely linking to the gender pay gap action plan is not always the most effective approach, because we know that when gender is not explicit in the context of a plan, it is rarely prioritised within implementation. If we think about the retail strategy specifically, there are a number of implementation groups and delivery agencies that will be taking forward the actions that are within that plan. However, if they are to look at the document because gender equality is not necessarily a core aspect of the outlined interventions and actions, it will not be immediately apparent to them that gender equality is something that they should be considering within implementation. Just to return to the earlier point on the industry leadership group, I think that it would be really positive if there was gender competence on that group and also the presence of a quality organisation. When we look at the retail strategy so far, we are unclear how equality organisations have been involved in that strategy. In terms of practical policies that the Scottish Government can do, I think that fair work is a key aspect of that work. We are very supportive of the Scottish Government's continued focus on fair work in Scotland. However, we recently responded to the consultation on the coming of Fair Work nation. The main takeaway from our consultation response is that the fair work policy framework needs to be better gendered if it is to deliver fair work for women. We would like to see more prominence being applied to flexible working as a core aspect of fair work, sexual harassment, as I have already outlined, and to think about gender sensitive training and upscaling initiatives. We have continued reliance on pre-existing interventions such as the flexible workforce development fund, individual training accounts and modern apprenticeships. However, the design of those programmes is not well-gendered, and that means that it merely reinforces women's inequality in the labour market. A key aspect of all of that is adopting gender mainstreaming approaches throughout all policy development. That is a tool to proactively embed gender considerations into the process of policy making, and it is required by the public sector equality duty. However, we do not yet see that being a consistent part of Scottish Government or local authority policymaking. As a result, we get this genderblind policymaking that does not take account of the differential needs of men and women. A tool of gender mainstreaming is a quality impact assessment, although, as I am sure the committee has heard on numerous occasions, we are concerned about the quality impact assessment in Scotland. We also see that that is being done later in the policy process, where the potential for that quality impact assessment to influence policy direction is very minimal. Changing the nature of policymaking is a really important starting point. Thinking about the gendered barriers that exist to fair work is a second point, and that involves looking at women's lives and understanding how they are more likely to be primary caregivers or have multiple caring responsibilities. How does that enable them to involve themselves in training or to access employability programmes, for example, and understanding the realities of women's lives and how that influences their input into the labour market? We have given a huge amount of information there, and I think that you have actually been very clear. Can I assume, just to close, that everything that you have said is more than applicable to retail and hospitality, which arguably, as a sector, is symptomatic of all the issues, both in systemic terms and policy terms that you outlined last week's question, because I am quite aware of time for everyone else? The convener is looking at me warningly. Everything that you have said applies to retail and hospitality. A multitude of times over, can you confirm that for the record? Yes, definitely. We see patterns of occupational segregation being very acute within the retail sector. It is female dominated. We know that women in retail have less access to training. We see that work in retail is increasingly precarious, and that contributes to women's overall higher rates of in-work poverty and wider inequality in the labour market. So, yes, absolutely, those issues are particularly applicable to the retail sector. Thank you very much, convener, and good morning to the panel. Can I kick off by asking Joanne about the Scottish Government's recent retail strategy, which highlighted the example of ScotMid and Azda working together. Maybe, Joanne, you can say a little bit about what that involved and how we can ensure that other retailers and pubchains and food and drink providers can follow that particular example. Yes, thank you. ScotMid is recognised for collective bargaining purposes, so we negotiate paying conditions for members there, as we do with various other major empires, including Co-op Group, Esco, Sainsbury's, Morrison's. In terms of our relationship with ScotMid, I know my colleague in Scotland, Trace Gilbert, has been involved with them in discussion in dealing with issues around violence at work as well, and we have regular consultations with company about changes to the business. What we would like to see come through the fair work agreement is a stronger emphasis on the importance of worker voice and engagement, and the role that trade unions can play in that, and the benefits to both workers and employers of doing that. We hope that, as the fair work agreement is developed, that that will be an important theme in it. I apologise for any background noise, because there is some drilling going on that side of my office that is quite noisy, so apologies if that is coming through on your end. It is the nature of online meetings. We are used to lots. A lot of the evidence that we have had so far highlights the fact that the future of a high street may well mean fewer big retailers, a lot more smaller independent shops and growing online sales. What does that mean for trade unions when it comes to first of all organising, and I suppose recruiting almost, and supporting the fair work practices that obviously are important to the union? In a number of cases, there are some job changes within the agreements that we have already organised. For example, in supermarkets, we have seen perhaps more use of online dot-com orders, so we have more members working as sort of dot-com kickers and things like that. Where we already have agreements that cover all those roles and they are still in store, or in distribution centres where we organise, that can just mean that we continue to organise those groups of workers. We know that, often with the increase in online deliveries, there is greater use of the gig economy, which is much more difficult to organise and where often those sectors are not unionised and are not where there are poor working practices involved, so there are concerns there. I think that there are also concerns, which Ruth alluded to earlier, about the impact in terms of women's jobs being lost in retail and the shift in employment becoming away from women as automation increases. On that wider, what we are told to do with the strength of the high street in the future will be those smaller independent shops. How successful are the unions in trying to organise within the area where they do not have big head offices to contact and have multiple chains across the country? Yes, it can be quite difficult to organise in those smaller retailers. Equally, it can be difficult to organise in bigger retailers when you are trying to gain recognition because the process for getting statutory recognition is quite arduous and difficult. It is not that the retail sector is changing all of the time, but we have in those emerging retailers, such as B&M bargains. We have recognition now, and we are seeking recognition in Aldi and Lidl. I know that those are big retailers, but they are retailers that were not around so much a few years ago. We are always looking to organise workers wherever they are, but often people working in small employers do not know that they have the right to be a member of a union, even if the union is not recognised. It is important that people are aware of their union rights and their rights to be represented at work, even if they work for a small employer and that is something that the Scottish Government could do some more work around. On similar points, you mentioned the impact of the pandemic on the hospitality sector and job losses at a time when supporting fair work has probably never been more important. To what extent is the impact from the pandemic but also the change in face of our high street having on trade union representation and that fight for fair work? Is it making it more challenging for you when it comes to organising in workplaces? It is certainly challenging, Colin. The past two years have been really difficult to organise workers, but if there is an upside to the pandemic in organising, it is being that we have moved and we have been able to adapt to online organising. For example, a very large hotel chain that shall remain unnameless just now. When they tried to terminate 95 per cent of their workforce, we very quickly got those workers on to Zoom calls, on to WhatsApp groups and we organised them virtually. We would not have been able to do that, ironically, had we not been in a pandemic and we had to go to those workplaces, we had to actually meet those workers face to face. Frankly, as Jo-Anne has already pointed out, it is very difficult. Some employers do not recognise unions and in some cases do not recognise the legal right to be in unions. We have many instances of where we have not been allowed to even enter hospitality workplaces. The upside if there is one to organising in the pandemic is that we have been able to adapt really quickly to organising. I should say that we do organise gig economy workers, who unite as the union, for example, for delivery and Uber Eats delivery riders. We have got quite a few hundred across the country who have been able to successfully organise despite the kind of desperate nature of the job. In that sense, technology or the remote nature of the job has actually helped in that organising, because they have been able to organise each other virtually rather than having to meet in person. Is there anything from a policy point of view at the Scottish Government level that would enable the strengthening of that organising? Yes. We have given evidence to local authorities, to this committee, to talk about things such as the union modernisation fund, which uniting hospitality was one of the central focuses of the union modernisation fund. The Scottish Government has been incredibly supportive of making sure that fair work is not just a tick-box exercise in terms of procurement. It is about reaching out to new workers, migrant workers, young women, workers who have never been in a trade union before and saying to them that a union is not just about going on strike, it is about driving up standards, it is about ensuring that you get treated fairly in the workplace. In terms of what can be done, there is still a lot that can be done. As I said earlier, the Licence and Scotland Act 2020 needs to be changed, for example, to put a bit more pressure on employers to ensure that they adopt and embed the fair work agenda into everything that they do. For example, a liquor licence should not be given to a late-night venue unless they pay the real living wage, unless they ensure that workers are given safe and free transport home after the last bus or train. It is very simple, and I do not think that costly requirements would actually transform people's lives. Thanks very much. Following on from Colin Slyne's line of questioning about support for trade unions and the work that trade unions are able to do, I was very pleased to be able to spend a little bit of time at STUC Congress in Aberdeen yesterday. One of the sections of debate was very clearly on improving workers' conditions, employment rights and improving recognition and support for trade unions. Brian, I wonder if I could come to you first on that. One of the challenges that we have is that employment law is not completely devolved. We have voluntary schemes such as the Campaign for the Real Living Wage, such as the Scottish Business Pledge. Are those voluntary schemes actually delivering for workers? If not, within the constraints of devolved powers, what more should we be looking at doing to make sure that all employers take workers' pay and conditions seriously, but perhaps particularly the hospitality workers that you have spoken about this morning? Thanks, Maggie. I think that it is the most important question of all, frankly, because it is about how policy can actually deliver for working people. There is a lot that can be done on a local, regional and national basis to ensure that fair work is implemented. To give one example in terms of procurement, we know that hundreds of millions of pounds are spent. A lot of that is in the hospitality and retail sector and public money that is being spent. Yes, we do what we can or the Government does what it can to ensure that the real living wage is paid to ensure that zero hours contracts are not used, but we are seeing that down the supply chain—that just is not happening—there are a lot of workers down the supply chain of procurement who are not given guaranteed hours, who in some cases are being paid age discriminatory rates. They are not even being paid the national minimum wage, they are being paid below that, but there is a lot that can be done. I think that, Maggie, to be quite honest, naming and shaming those employers who receive public funds that do not, for example, close the gender pay gap, who continue to use zero hour contracts or lower hour contracts, because, of course, getting 10 hours a week and sometimes being just as bad as getting no hours at all, but specifically on sexual harassment again, we have lobbied for 10 years to get the third party harassment effectively reinstated into the Equality Act. The Scottish Government can be making firmer statements, I think, to say, look, if you want public money, you should be adopting, implementing proactive sexual harassment policies, you should be providing safe and free transport home after the last bus or train or tram. Those should not just be add-ons at the end, they should be prerequisites, they should be requirements for them to be able to, for example, get a liquor licence for them to be able to receive public money. I think that, just on that and keeping it as short and sweet as possible, but just to support what Ruth Cedd said earlier, equality impact assessments as requirements on employers, if they are not high quality enough, we need to almost be making them a prerequisite for those contracts. As I said, if those employers continue over two or three years to fail to close the gender pay gap or the migrant worker gap, they should be held to account and maintained and shamed. Thanks very much, Brian Jordan. I bring you in on the same question. I wanted to point out one area where the Scottish Government does have powers that it has not exercised, which is on new year's trading. All stores have been campaigning for a longer break for retail workers at Christmas and New Year. The legislation on Christmas day trading does allow the Scottish Government to require large shops to close on New Year's Day. There was a consultation last year following campaigning from our members, and 94 per cent of the people who responded to that consultation supported shops closing on New Year's Day. It may seem quite a minor thing, but it is something that is really important to our members. We were really disappointed that, after all that process, the ministers did not agree to make the change to the law that we were asking for, because we do not think that it is much to ask for retail workers to get an extra day off the new year. That is an example of one of those areas where the Scottish Government could actually do something and so far has not done so. I thank all the three witnesses this morning for the evidence that they have given us and their contribution to the inquiry. If there is anything that you felt that you were not able to share with us this morning, you are free to send in a written response in addition to the evidence that we have received this morning. I will now close this part of the meeting.