Is Scotland the new East Germany?" asks the historian Michael Fry. The conservative author and essayist, recently converted to the cause of nationalism, has never been shy of criticising the failings of the Scottish parliament, but with the Christmas Day and New Year's Day Trading (Scotland) Bill he thinks its members are beginning to find a taste for intervention in the lives of citizens not seen since before the Berlin Wall came down.

In this month's Prospect magazine, Fry accuses MSPs of creating a dependency culture based on government intervention and legislation banning anything that cannot be nailed down. "You name it, the parliament has banned it," says Fry. "Smoking, fox-hunting, bingeing, happy hours, a ban on mink farms, which do not even exist in Scotland. They do have a penchant for banning." It is, according to Fry, all part of the parliament's opposition to the free market and liberal economics and the much-derided municipal mentality of the Labour majority.

"This is another example of the same thing," says Fry. "Growth is lagging in Scotland and the Scottish Executive is supposed to want the economy to grow more rapidly. Regulation is the enemy of growth, but faced with the choice the parliament would prefer regulation. Let's face it, it should be left to shop owners to decide when to open their shops."

That's certainly what the Scottish retail industry thinks. "Legislation gone mad" is how Liz Cameron, the managing director of the Scottish Chambers of Commerce, described the bill.

"The question of whether large retailers open on Christmas Day and New Year's Day is a matter for businesses and their employees, not government. Politicians keep telling us they are pro-business and are placing Scotland's economy at the top of the agenda, but votes like this suggest quite the opposite."

And Ron Hewitt, chief executive of Edinburgh Chamber of Commerce, called the bill an "unnecessary piece of legislation". He said voluntary agreements over festive working hours in smaller shops are already in place and, from the owners' points of view, they are successful and shouldn't be changed.

"The proposal to ban shops over 280sqm from opening on Christmas Day and New Year's Day is highly illogical for a start," said Hewitt. "For example, a small branch of a multiple chain could open while a large one could not." As it stands, the bill would mean that Boots' branch on Princes Street would have to close, but Boots at Waverley Station could trade.

While the instincts of the majority of Labour MSPs to defend the rights of workers may be laudable, retailers just see the parliament taking a populist swipe at big business. Department store John Lewis, which has branches in Glasgow, Edinburgh and Aberdeen, already closes on Christmas Day and New Year's Day, but that doesn't stop managing director Andrew Murphy seeing the move as pre-election posturing by MSPs. He said his stores were "highly unlikely" to open on Christmas Day or New Year's Day with or without the bill.

Susan Deacon, a former minister, was the only one on the Labour benches to point out the dangers of throwing away tourism business carefully nurtured by events such as Edinburgh's Hogmanay. The niche that Edinburgh has created for itself as a Hogmanay destination might be threatened if tourists find themselves wandering down Princes Street on New Year's Day with not a stitch to buy - it hardly presents a business-friendly face to the world. David Lonsdale of CBI Scotland was more blunt: "Banning trading on New Year's Day would send out a message that Scotland is closed for business."

The bill, backed by 99 votes to four against, must now pass two more stages before becoming law. The back-room deal which gave the motion so much support - and guaranteed the votes of the Liberal Democrat coalition partners - would mean decoupling the two festive breaks, meaning shopping on Christmas Day would be banned, but New Year's Day would be allowed.

That at least is what Johann Lamont, the deputy justice minister, hinted at when she said the bill could still be amended. Her own instinct is to support the measure, fearing that without the bill employees will eventually be pressured to work on the two days.

That is what MSP Karen Whitefield, with strong support from Usdaw, the shopworkers' union, argued when she proposed the legislation. Until recently, all large stores in Scotland have been closed on both December 25 and January 1, although there is a drift towards New Year's Day opening. Whitefield said she wanted to preserve the status quo.

An ad-hoc ministerial group will now discuss the issue with Whitefield and other interested parties prior to the bill's second stage. If the group is to hold fast against the fury of the business community, it will have to draw on the support of the trade unions, shop workers and shoppers who want a blessed relief from Christmas trading.

The proposals will have no effect on opening hours this festive season. Under the bill, stores of more than 3,000sqft would be forced to close, but smaller shops, restaurants, pubs, takeaways, pharmacies and stores in airports, railway stations, ports and motorway service stations would not be affected. So, you'll still be able to get a box of chocolates from the corner shop to watch The Great Escape with, but buying that designer bag in Debenhams' window as a last-minute gift is probably out of the question.