Tag: Economy

Edinburgh poised to declare Scotland’s first visitor levy

Councillors set to grasp opportunity to introduce a levy that will ‘enhance and improve the city of Edinburgh’

After years of campaigning and engagement – including successfully advocating for a visitor levy to the Scottish Government to bring forward necessary powers – the Council is set to agree the Visitor Levy for Edinburgh scheme this month.

Following support from Councillors in August and the results of a 12-week public consultation, updated officer proposals will be considered by the Policy and Sustainability Committee on Friday, 17 January and by all Councillors at a special meeting on Friday, 24 January.

With over 4,500 responses, the wide-ranging consultation with residents, businesses and visitors reveals most people are aware of and supportive of the Council’s Visitor Levy plans.

Slight adjustments to officer recommendations have been made to reflect the public feedback, including:

  • 5-night cap: Capping Edinburgh’s levy at 5 consecutive nights per person, rather than 7
  • Campsites and caravans: Temporary campsites and parks proposed to be liable for the levy
  • Refunds within 5 working days: for all visitors eligible for national exemptions
  • New transition period: a levy grace period until May 2025 for bookings made for July 2026
  • Admin support for accommodation providers: equalling 2% of visitor levy income

If agreed, Edinburgh’s Visitor Levy charge will start being applied to bookings made on and after 1 May 2025 to stay in overnight accommodation in the city on and after 24 July 2026, representing a significant step forward in securing a new funding stream for the city.

Once established, the levy is expected to raise up to £50 million a year.

Council Leader Jane Meagher said: “This is the moment we have been working towards – a once in a lifetime opportunity to sustain and enhance Edinburgh’s position as one of the most beautiful, enjoyable destinations in the world. 

“With income of up to £50 million expected once it is established, the funding could provide Edinburgh with the single biggest injection of new funding this side of the millennium, providing a unique opportunity to further improve and protect all that makes Edinburgh the incredible destination it is today.

“We’ll be able to use funds to help us manage tourism sustainably and boost projects which benefit the experience of visitors and residents. I’m looking forward to working with Councillors to agree the scheme this month, which will allow further work to be carried out on the details of Edinburgh’s new levy.”

Some businesses have expressed concerns over Edinburgh’s ‘Tourist Tax’ proposals, however.

Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, said: “Given the importance of the tourist economy to the capital, Edinburgh Council cannot afford to be reckless with these plans. The implementation of short-term let licensing was a policy shambles and we cannot have history repeating itself with the visitor levy.

“Many simply don’t realise that this tax won’t just be paid by international visitors but by ordinary Scots staying in the city – be it for business purposes, seeing friends, visiting family in hospital, or taking in the Fringe. 

“Other European cities might have it, but they often charge a small flat rate, don’t charge their own residents, and don’t have a 20% VAT rate. The schemes are not comparable. There is a real risk of undermining Edinburgh’s position as a leading destination. 

“This policy will also disproportionately impact small local accommodation businesses, including self-catering and B&Bs, further increasing the administrative burden. The accumulative regulatory impact could cripple them at a time when recovery is precarious.”

“We also fear that the transitional period is too short. The Council still has a lot of work to do to reassure business that these plans won’t erode the very industry it is supposedly meant to support.”

Scottish business confidence rises in December

  • Business confidence in Scotland rose 13 points to 44% in December 
  • While firms’ optimism in their own trading prospects fell four points to 39%, their optimism in the economy rose 31 points to 49%
  • Overall UK business confidence dipped three points in November to 41%

Business confidence in Scotland rose 13 points during December to 44%, according to the latest Business Barometer from Bank of Scotland.

While companies in Scotland reported lower confidence in their own business prospects month-on-month, down four points at 39%, their optimism in the economy rose 31 points to 49%. Taken together, this gives a headline confidence reading of 44% (vs. 31% in November).

A net balance of 44% of businesses in the country also expect to increase staff levels over the next year, up 21 points on last month.  

Looking ahead to the next six months, Scottish businesses identified their top target areas for growth as introducing new technology (52%), entering new markets (42%) and investing in their team, for example through training (38%).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.   

National picture

Overall UK business confidence fell two points in December to 39%, although remained above the long-term average of 29%.

While firms’ confidence in the wider economy strengthened five points to 31%, their confidence in their own trading prospects fell eight points to 47%.  

London was the most confident UK nation or region in November (53%) for a second month in a row, followed by the North West (50%). 

Sector insights

Although confidence fell in the service sector, this was partly offset by rises in manufacturing and retail, with these sectors swapping places in December. 

Services fell from 46% to 35% in December – a fall of 11 points. In contrast, manufacturing and retail increased 10 points to 42% and 43% respectively, thereby taking manufacturing and retail above services for the first time in 4 months. Trading prospects for retail rose for the first time in three months, while construction confidence was steady at 41%, equalling last month’s result.   

Martyn Kendrick, Scotland director at Bank of Scotland Commercial Banking, said: “It’s encouraging to see Scottish business confidence end the year on the rise, and above the UK average.

“Businesses will be focused on putting their plans for fresh growth into action. We’ll continue to be by their side to support their ambitions.”

Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “In the last few months overall confidence has fallen incrementally, and in December the trend continued as it fell by 2 points to 39%. While there hasn’t been any significant one-month change, confidence has gradually drifted from the summer’s highs”. 

“The key difference in this month’s results is that the fall in confidence is driven by firms’ own trading prospects which have proven to be resilient over the last quarter. There was, however, more positivity regarding the wider economy and, going into 2025, this offers some hope if companies continue to feel confident about the economy.

“Elsewhere, although confidence fell in the services sector, this was partly offset by improvements in manufacturing and retail – which could be a significant for this time of year.” 

Paul Kempster, Managing Director for Relationship Management, Lloyds Bank Business & Commercial, said: “The mixed results in trading prospects and economic optimism suggest that while businesses feel they are facing some challenges, there is still some opportunity in regard to the wider economy.

“Although overall confidence dipped this month, we’re still optimistic that firms’ trading prospects will return to the levels seen earlier this year. 

“The regional picture is also mixed with significant increases in confidence in Scotland and Northern Ireland, but more acute falls in confidence in the North-East. As we enter the New Year, and businesses across the country consider their plans for 2025, we are committed to helping them to navigate their journey and prosper.”

Chancellor opens 100th banking hub in time for Christmas

  • Chancellor Rachel Reeves and Treasury minister Tulip Siddiq, have opened the 100th banking hub in Darwen, Lancashire.  
  • Banking hubs have been set up in response to bank branch closures, with 350 set to be rolled out by 2029.  
  • High streets up and down UK will be revitalised – helping raise living standards and deliver the Plan for Change 

Chancellor of the Exchequer, Rachel Reeves, and Economic Secretary, Tulip Siddiq, have opened the UK’s 100th banking hub in Darwen, Lancashire, which has been set up in response to bank branch closures in the town.   

The newly opened banking hub will give customers of the largest high street banks the ability to get cash out, deposit cheques and ensures that local residents have access to face to face banking services.   

Kickstarting economic growth is the number one mission for this Government – something cemented in the Plan for Change launched last week, where the Prime Minister redoubled our commitment to raise living standards in every part of the United Kingdom. The roll out of banking hubs will be a significant boost for local people and businesses, helping to revitalise the local high street and raise living standards across the UK. 

The opening of the 100th banking hub is a significant landmark on the road to delivering on the government’s manifesto commitment to work with industry to open 350 banking hubs by the end of this parliament.  

Rachel Reeves, Chancellor of the Exchequer, said: “Reaching this milestone of 100 banking hubs is a huge step towards making sure that people across the country have access to essential face-to-face banking services.   

“High streets are the beating heart of our communities but were neglected for too long under the previous government. We are revitalising our high streets with our target for 350 banking hubs, reforming business rates to make them fairer and clamping down on antisocial behaviour.” 

Banking hubs are a collaborative industry initiative, set up in response to bank branch closures onhigh streets across the country. 

Instead of one bank owning a branch, the responsibility is shared between the banks. This means that they can share the running costs and all operate in one convenient location.  

All customers will benefit from Monday-Friday access to cash and basic banking services via a traditional counter service operated by the Post Office. Community bankers from each of the five banks with the largest number of customers in the area will also come in one day per week to assist their customers with more complex banking issues like debt advice, bereavement services and fraud support.   

In the Darwen banking hub, the participating banks are NatWest, Santander, Lloyds, Halifax and Barclays, the banks with the most customers in that location. Opening the banking hub will protect access to cash and banking services for 10,000 local residents and 150 shops within 1 kilometre of Darwen town centre.   

The 100th opening is a significant milestone. In September, Economic Secretary secured a historic agreement from industry to deliver on this commitment, with 230 hubs expected to be open by the end of next year, helping to revitalise towns and high streets up and down the country.  

Tulip Siddiq, Economic Secretary to the Treasury, added: “We are delighted to see the continued growth of banking hubs, which are playing an essential role in meeting the needs of communities where traditional banking options have declined.   

“These hubs are not only vital for residents and businesses, but they also play a key role in revitalising our high streets, bringing footfall back to town centres, and repurposing unused buildings for community benefit. 

“The success of these hubs proves that shared banking services can provide a solution that benefits everyone, from residents to local businesses.”  

The opening of banking hubs can play an important role in revitalising our high street and repurposing disused buildings in town centres all while providing a vital service to businesses and people in those communities.  

Evidence from Brixham in Devon and Rochford in Essex  where banking hubs have recently opened has backed this up, research from Cash Access UK the group that run banking hubs shows that  almost half of businesses surveyed saying it has increased footfall in the town and 30% of residents saying that they visit the town more regularly and stay for longer because a banking hub has opened in the town. 

Gareth Oakley, CEO, Cash Access UK, said: “Access to cash and face-to-face banking services remain vital to millions of people and businesses who rely on it.  

“We’re delighted that banking hubs, alongside deposit services are proving to be successful and are making a real difference to communities and high streets up and down the country.” 

‘Bombshell’ report shows short-term lets boost Scottish economy by £864m per year – with no evidence of housing impact

BiGGAR Economics challenges ‘false narratives’ surrounding Scotland’s self-catering sector now at risk from heavy-handed government regulation

NEW independent analysis from a respected Scottish consultancy reveals the substantial positive economic impact of Scotland’s self-catering industry which was also shown to have a negligible effect on housing.

BiGGAR Economics calculated that short-term lets (STLs) contribute nearly £1bn gross value added (GVA) to the Scottish economy while supporting approximately 30,000 jobs. By accommodating visitors, STLs generate economic activity across Scotland, with the local impacts exceeding residential use, supporting an additional £32,400 GVA per property.

Guests staying in self-catering accommodation, termed ‘secondary lets’ in Scottish STL legislation, also spend more than the average visitor to Scotland, with knock-on gains for related tourist and hospitality businesses. Alongside this huge economic boost, the researchers also highlight that self-catering accounts for less than 1% of the country’s total housing stock.

This challenges the narrative that STLs are fuelling Scotland’s housing crisis, with self-catering at only 0.8% of the country’s housing stock, too low a proportion to have a meaningful impact on local housing markets. Moreover, according to the report, in every local authority area, economically inactive empty homes account for a larger proportion of total dwellings than from secondary lets.

The key headlines include:

  • STLs are estimated to generate £864m GVA and support 29,324 jobs across Scotland;
  • Edinburgh and Highland together account for 44% of the total economic impact but the sector’s benefits are dispersed throughout Scotland;
  • The annual GVA associated with an average owner-occupier/private rented household in Scotland was £14,451, compared to £50,159 for a two-bedroom STL; and
  • STLs make up a tiny proportion of Scotland’s housing stock, with self-catering accounting for just 0.8%. This is considerably less than the 3.6% that economically inactive empty properties account for.

This study comes as the Scottish Government published an implementation update report on STL licensing which the industry maintains did not adequately address their longstanding concerns. At a local level, councils such as Highland and Edinburgh are also assessing their regulations.

BiGGAR’s new analysis is based on the best available evidence on STLs in Scotland. The findings have been shared with Scottish Government Ministers and officials.

Graeme Blackett, Director of BiGGAR Economics, said: “This report shows that secondary lets make an important contribution to Scottish tourism and economy overall, supporting almost 30,000 Scottish jobs.

“Our research also concluded that it was clear that secondary lets are not a driver of the wider Scottish housing market.

“If short-term let regulations leads to a reduction in the supply of secondary lets, that will have a negative impact on the tourism economy, without delivering any solutions to Scotland’s wider housing challenges.”   

Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, said: “This is yet more compelling evidence that short-term lets aren’t the main contributor of the housing crisis but are instead turbocharging local economies with a near £1bn positive impact while supporting 30,000 jobs.

“The current unbalanced regulatory framework does not reflect this reality and changes are needed before irreversible damage is done.

“Local councils should take heed of the report’s findings when considering their approach to planning policies and control areas to ensure the relatively small number of valuable short-term lets are protected.

“For policymakers, the message couldn’t be clearer: you can’t solve a housing crisis by producing a crisis in Scottish tourism by decimating local businesses that underpin local economies. Attention must shift to the real causes of the housing crisis.”

Economic-Impact-of-Short-term-Lets-in-Scotland-Report-by-BiGGAR-Economics-11Dec24Download

Deputy First Minister outlines steps towards financing a green future

A range of measures to transform how Scotland attracts and supports capital investment into the country have been unveiled

Deputy First Minister Kate Forbes will take on a cross-government leadership role as the Scottish Government’s ‘Investment Champion’ to deliver a national pipeline of strategic investment opportunities and a seamless, co-ordinated approach to building relationships with investors and developers.

Practical steps being delivered include an Investment Unit to identify and tackle barriers to investment; the creation of a single portal for investment inquiries and another detailing investment opportunities; and a new Cabinet sub-committee to co-ordinate activity.

The Scottish Government will also explore new financing models including how public sector guarantees could be used, a potential Scottish Bond, and public-private partnerships.

Addressing the Investment Association Conference in Edinburgh Ms Forbes said: “Increasing the level of private investment into Scotland’s economy is essential to our ambitions – for growth, for jobs, for reaching net-zero, and for improving our public services. Without investment and the growth it can catalyse, we can achieve none of those goals. 

“I will be working to tackle barriers and blockers; and to ensure that the system as a whole works cohesively, effectively, and quickly, to support investors and to deal with issues as and when they arise. 

“Scotland has the talent, skills and resources in abundance to be a major player in the energy transition and secure a prosperous and sustainable future. We need to work better, smarter, and quicker to ensure that we can create an investor-friendly environment and seize the many opportunities which lie ahead. ”

The Deputy First Minister’s speech.

TUC: Workers’ rights reforms could benefit economy by over £13bn a year

  • New analysis shows how improving employment standards, employee well-being and modernising industrial relations will benefit the economy
  • TUC General Secretary Paul Nowak gave evidence to MPs as Employment Rights Bill enters committee stage
  • Making Work Pay agenda is an “urgent national mission” that is “good for workers and good for business”, says union body

New TUC analysis published yesterday (Tuesday) shows that even modest gains from the government’s workers’ rights reforms would benefit the UK economy by over £13bn a year.

The analysis models some of the key benefits of the Employment Rights Bill – identified by the government’s impact assessment of the Bill.

The research shows that even if the Bill just delivers small improvements in areas such as employee wellbeing, industrial relations and labour market participation the economic gains will outweigh any costs.

The analysis looks at the scale of the benefits implementing the Employment Rights Bill could bring across a range of workplace measures:

  • Workplace stress: Between £490 million and £974 million would be gained by reducing the number of working days lost to stress, depression or anxiety.
  • Staff well-being: Between £310 million and £930 million a year would be gained from improving staff well-being.
  • Minimum wage compliance: Between £42 million and £168 million a year would be gained through improving minimum wage compliance.
  • Strikes: Between £255 million and £510 million a year would be gained through resolving disputes that lead to workers taking action.
  • Industrial relations: Between £2.7bn and £8.1bn a year would be gained through reduced workplace conflict
  • Increased labour market participation: Between £1.3bn and £2.6bn a year would be gained through increasing employment for people currently looking after family or home.

The research shows that the cumulative impact of even modest improvements would be £13.3bn a year – and stronger outcomes could generate even greater gains.  

The TUC says the analysis confirms the view of the government’s impact assessment that there is “clear, evidence-based benefits of government action through the Bill.”

The impact assessment also warns that “not acting would enable poor working conditions, insecure work, inequalities and broken industrial relations to persist.”

Evidence to MPs

The findings were published as TUC General Secretary Paul Nowak prepared to give evidence to MPs as the Employment Rights Bill enters its committee stage.

Nowak told parliamentarians that improving the quality of work in Britain is an “urgent national mission” that will benefit workers and businesses alike.

Polling published in July revealed huge backing across the political spectrum for boosting workers’ rights.

And polling published in September revealed that an overwhelming majority (75%) of employers support the government’s measures, including nearly seven in 10 (69 per cent) of small businesses.  

TUC General Secretary Paul Nowak said: “Far too many working people are trapped in jobs that offer them little or no security. We can’t carry on with this broken status quo.

“Improving the quality of work in this country is an urgent national mission that will bring real economic gains.

“Driving up employment standards, improving employee well-being and increasing labour market participation is good for staff and good for businesses.

“When workers are treated well they are happier, healthier and more productive.

“The Employment Rights Bill is a historic opportunity to make work pay – and to create a level playing field that stops good employers from being undercut by the bad.  

“It must be delivered in full.”

Commenting on the impact of the Bill on employers, Paul added: “The TUC stands ready to work with the government and employers. We recognise that businesses and unions will need advice to understand and implement these changes.

“But there is no case for delaying the reforms. People need jobs they can build a decent life on.

“Many of the arguments being used against this legislation are the same ones that were used against introducing the minimum wage – one of the great policy successes of the last 25 years.

“They were wrong then and they are wrong now. When working people thrive so do businesses and the wider economy.” 

Scotland’s Budget Report Preview 1: What might the Scottish Government do on Business Rates?

In the Budget, the Chancellor announced that Retail, Hospitality and Leisure (RHL) businesses would receive 40% rates relief in England next year, following a 75% relief in the current year (write Fraser of Allander Institute’s MAIRI SPOWAGE and JOAO SOUSA).

RHL businesses in Scotland have had no such relief since 2021-22, which (as you can imagine) has led to many businesses saying they are at a disadvantage to their counterparts South of the Border. Given this extension in relief in England, businesses in the RHL sector are likely to be calling on the Scottish Government to follow suit.

Such a decision by the Chancellor does generate Barnett consequentials for the Scottish Government, because the UK Government compensated English councils for the lost revenue. Business rates are devolved to all three devolved nations, and there is no obligation for any of the devolved governments to replicate measures in their jurisdiction.

Last year, we looked at the 75% relief announcement in England and tried to estimate how much it would cost to replicate. This analysis concluded that it was likely to cost considerably more in Scotland to replicate the relief than was provided through Barnett, because:

  • The business rates system is just differently structured in Scotland; but mainly;
  • RHL businesses make up a larger share of the property tax base in Scotland.

What about the 40% relief?

As we did last year, we have looked at the data available on the tax base for business rates to try to estimate how much it might cost to replicate the 40% relief in Scotland.

We must emphasise that this is not completely straightforward from the publicly available data. Whilst the Valuation Roll (which lists all properties and their rateable value) is a public document, the extent to which different properties attract reliefs is not on this database, so we have to make some assumptions about the extent to which properties may already be receiving reliefs. Obviously, for example, if a property is already receiving 100% relief (e.g. through the Small Business Bonus Scheme), then they cannot receive any more relief from the 40% measure, even if they are in RHL.

This is important because 100% relief for property is actually quite common: 48% of properties receive this.

Chart 1: Proportion of properties that receive 100% relief, selected property classes

Proportion of properties that receive 100% relief, selected property classes

Source: Scottish Government

The second challenge is that there is a cap on the amount of relief that an individual company can receive, which limits the amount of relief paid, but requires a property-by-property analysis (and some assumptions about multi-property companies) to understand the impact this has on the overall cost.

All of these assumptions mean our analysis will not be as accurate as a proper costing by the Scottish Fiscal Commission if the Scottish Government were to introduce this measure (given the additional data they have access to): and our attempt to account for multi-property enterprises is likely to be imperfect which might mean we are underestimating the impact of the cap (so slightly overestimating the cost of a new relief).

Having said all that (sorry for all the caveats), our analysis suggests that it will cost roughly £220m to replicate this relief in Scotland, compared to the £147m that was generated by the decision in England through Barnett.

[For those who are interested, you will note that this is not a linear reduction on our estimate for the 75% relief. This is because of the cap for each company again: companies are more likely to hit the cap with a higher level of relief so it is not as simple as it appears, unfortunately!]

Look out for more analysis

We will be producing Scotland’s Budget Report 2024 on 29 November, which will set the context for the Scottish Budget on 4 December. In the run-up, we will continue to publish blogs with new analysis to add to the discussion!

Pension ‘megafunds’ could unlock £80 billion of investment

Chancellor takes radical action to drive economic growth

  • Biggest pension reforms in decades will merge Local Government Pension Scheme assets and consolidate defined contribution schemes into megafunds
  • Changes could unlock around £80 billion of investment for infrastructure projects and businesses of the future  
  • Local Government Pension Scheme changes will free up money for local public services in the long-term and secure more than £20 billion for investment in local communities

Pension megafunds will be created as part of the biggest set of pension reforms in decades, unlocking billions of pounds of investment in exciting new businesses and infrastructure and local projects.   

After her inaugural Budget that ‘fixed the foundations to deliver stability’, Rachel Reeves will use her first Mansion House speech as Chancellor to announce bold action to tackle the fragmented pensions landscape, deliver investment and drive economic growth – which is the only way to make people better off.  

The radical reforms, which will be introduced through a new Pension Schemes Bill next year, will create megafunds through consolidating defined contribution schemes and pooling assets from the 86 separate Local Government Pension Scheme authorities.  

These megafunds mirror set-ups in Australia and Canada, where pension funds take advantage of size to invest in assets that have higher growth potential, which could deliver around £80 billion of investment in exciting new businesses and critical infrastructure while boosting defined contribution savers’ pension pots.

Chancellor of the Exchequer, Rachel Reeves said: “Last month’s Budget fixed the foundations to restore economic stability and put our public services on a firmer footing. Now we’re going for growth.   

“That starts with the biggest set of reforms to the pensions market in decades to unlock tens of billions of pounds of investment in business and infrastructure, boost people’s savings in retirement and drive economic growth so we can make every part of Britain better off.”

Deputy Prime Minister, Angela Rayner said: “We’ve all seen the fantastic work carried out day in, day out, by our frontline workers and it’s about time their pension started working just as hard by driving investment in their communities. 

“This is about harnessing the untapped potential of the pensions belonging to millions of people, and using it as a force for good in boosting our economy.”

Pensions Minister, Emma Reynolds said: “Harnessing the power of this multi-billion-pound industry is a win-win, benefiting future pensioners, and our wider economy.  

“These reforms could unlock £80 billion of investment into exciting new businesses and critical infrastructure.”

The UK pension system is one of the largest in the world – with the Local Government Pension Scheme and Defined Contribution market set to manage £1.3 trillion in assets by the end of the decade.

However, our pension landscape is fragmented and lacks the size needed to invest in exciting new businesses or expensive projects like infrastructure.  

The government’s analysis – published today in the interim report of the Pensions Investment Review at Mansion House – shows that pension funds begin to return much greater productive investment levels once the size of assets they manage reaches between £25-50 billion.

At this point they are better placed to invest in a wider range of assets, such as exciting new businesses and expensive infrastructure projects. Even larger pensions funds of greater than £50 billion in assets can harness further benefits including the ability to invest directly in large scale projects such as infrastructure at lower cost.  

This is supported by evidence from Canada and Australia. Canada’s pension schemes invest around four times more in infrastructure, while Australia pension schemes invest around three times more in infrastructure and 10 times more in private equity, such as businesses, compared to Defined Contribution schemes in the UK.

Benchmarking against domestic and international examples show how consolidation of the Local Government Pension Scheme and defined contribution schemes into megafunds could unlock around £80 billion of investment in productive investments like infrastructure and fast-growing companies.  

The government is therefore consulting on proposals to take advantage of pension fund size and improve their governance. 

Local Government Pension Scheme

The Local Government Pension Scheme in England and Wales will manage assets worth around £500 billion by 2030. These assets are currently split across 86 different administering authorities, managing assets between £300 million and £30 billion, with local government officials and councillors managing each fund.  

Consolidating the assets into a handful of megafunds run by professional fund managers will allow them to invest more in assets like infrastructure, supporting economic growth and local investment on behalf of the 6.7 million public servants – most of whom are low-paid women – whose savings are managed.  

These megafunds will need to meet rigorous standards to ensure they deliver for savers, such as needing to be authorised by the Financial Conduct Authority. Governance of the Local Government Pension Scheme will also be overhauled to deliver better value from investment decisions, which independent research suggests could free up money in the long-term to support local public services. 

Local economies will be boosted by the changes as each Administering Authority will be required to specify a target for the pool’s investment in their local economy, working in partnership with Local and Mayoral Combined Authorities to identify the best opportunities to support local growth. If each Administering Authority were to set a 5% target, that would secure £20 billion of investment in local communities.  

A new independent review process will be established to ensure each of the 86 Administering Authorities is fit for purpose.   

Defined contribution schemes

Defined contribution pension schemes are set to manage £800 billion worth of assets by the end of the decade.  

There are currently around 60 different multi-employer schemes, each investing savers’ money into one or more funds. The Government will consult on setting a minimum size requirement for these funds to ensure they deliver on their investment potential.  

The government will also consult on measures to facilitate this consolidation into megafunds, including legislating to allow fund managers to more easily move savers from underperforming schemes to ones that deliver higher returns for them.

Unacceptable levels of shop theft ‘causing serious harm to society’

Westminster’s Justice and Home Affairs Committee today publishes a letter to the Minister for Policing, Crime and Fire Prevention, Dame Diana Johnson MP, after conducting an inquiry into shop theft.

The Justice and Home Affairs Committee conducted an inquiry into shop theft. The Committee finds that shop theft is an underreported crime that is not being effectively tackled, leading to a devastating impact on the retail sector and the wider economy.

The Committee heard that there are almost 17 million incidents of shop theft annually, with few leading to an arrest and costing the retail sector almost £2 billion last year.

The nature of the offence has evolved from individualised offending to relentless, large-scale, organised operations accompanied by unprecedented levels of violence. Shop theft is now seen as a lucrative profit-making opportunity which is being exploited by organised criminal networks.

There is a widespread perception that shop theft is not treated seriously by the police. The Committee recognises the need for quicker reporting systems, better data collection and intelligence sharing between police forces across the UK.

The Committee welcomes the work of Pegasus, the new national scheme to tackle organised crime in the retail sector and recommends that existing schemes such as Business Crime Reduction Partnerships (linking police and local businesses) should all be part of a National Standards Accreditation Scheme.

The Committee concludes:

  • The outdated term “shoplifting” serves to trivialise the severity of the offence and should be phased out.
  • The Committee supports the plan to repeal the offence of “low-value shoplifting” under section 176 of the Anti-Social Behaviour, Crime and Policing Act, which in practice is decriminalising shop theft where the value of the goods does not exceed £200.
  • The Committee supports the creation of a standalone offence of assaulting a retail worker.
  • Improved reporting systems are required to enable retailers to report crime to the police quickly and easily.
  • The Committee recommends improving mechanisms for police and criminal justice systems to recognise and record when a crime has taken place in a retail setting.
  • Increased funding to community-based reoffending and rehabilitation initiatives are crucial to help divert prolific drug and alcohol addicted offenders away from further offending.
  • Public awareness campaigns are needed to target the stolen goods market.
  • The Committee supports the introduction of regulations and best practice guidance for the use of facial recognition technology by private companies.

Lord Foster of Bath, Chair of the Justice and Home Affairs Committee said: “In March 2024, 443,9953 incidents of shop theft were recorded by police – a 30% increase on the previous year and the highest-ever level since comparable records began over twenty years ago.

“But the figures are “a drop in the ocean” when compared with likely real figures estimated at 17 million with devastating consequences for businesses and families.

“The scale of the shop theft problem within England and Wales is totally unacceptable and action, like that underway in the Pegasus scheme, is vital and urgent.

“There’s no silver bullet. But, if adopted, the recommendations in our report should help tackle the problem and help keep the public and our economy safer.”

Nature’s role in Scottish economy

Jobs and sectors dependent on sustainable natural world

Scotland’s natural assets contribute more than £40 billion to the economy and support around 260,000 jobs, according to new research. 

The Importance of Natural Capital to the Scottish Economy report highlights the vital economic contribution the natural world makes to Scotland and highlights the value of the ecosystems and the services they provide. 

Important industries such as agriculture, fishing and aquaculture, forestry, water, food and drink and renewables all rely upon the continued availability of high-quality natural resources. 

The research investigates the economic impact of natural capital, which is defined as “the renewable and non-renewable stocks of natural assets, including geology, soil, air, water and plants and animals that combine to yield a flow of benefits to people.” 

The Scottish Government conducted the research to provide the most up-to-date reflection of the true value of nature to the Scottish economy, as it is often undervalued or not included in economic assessments. 

The study demonstrates the link between the threats to Scotland’s economic performance, and the economic opportunity associated with increasing nature dependent sectors.

The Scottish Government’s National Strategy for Economic Transformation (NSET) makes clear that working with and investing in nature is a top priority of Scotland’s wellbeing economy.    

Speaking while visiting Blackthorn Salt in Ayrshire, which produces salt through filtering sea water, Rural Affairs Secretary Mairi Gougeon said:  “This research reinforces the vital role of our natural capital in supporting many of our vital industries – a connection that is often under-represented when we look at economic performance.

“Blackthorn Salt is an excellent example of a business that is dependent on natural capital, using sustainable, traditional methods to produce an exceptional products that provides jobs and can be found in kitchens across the country and beyond.

“The twin crises of climate change and nature loss are inextricably linked, nature offers some of the best ways to protect us from the worst impacts of climate change, so it is essential that we work with partners across the public sector and private investors to protect biodiversity and reduce our emissions as we support sustainable businesses utilising our incredible landscapes and ecosystems.”

NatureScot Chief Executive, Francesca Osowska said: “Nature is vital for our quality of life and that of future generations. In Scotland we are fortunate to have rich and varied landscapes and habitats, with individuals and businesses willing to step up to the challenge of stopping nature loss with hard work and investment.

“NatureScot is responding to this urgent need with leadership of vital programmes such as the £250m Peatland ACTION fund, the £65m Nature Restoration Fund and the innovative new Facility for Investment Ready Nature Scotland (FIRNS) which aims to both restore nature and benefit communities. “