PLANS to ban large shops from trading on New Year's Day will not be taken forward, the Scottish Government has announced.

Public finance minister Tom Arthur said that while he was "sympathetic" to the move, the limits of existing legislation are clear. 

He said SNP ministers would not be able to guarantee that those who did get the day off would be paid for it, or that all workers would be covered. 

Mr Arthur also said economic conditions remain difficult for the retail sector in the wake of the coronavirus pandemic.

David Lonsdale, director of the Scottish Retail Consortium, said retailers would "breathe a sigh of relief" over the decision.

The Christmas Day and New Year's Day Trading (Scotland) Act 2007 makes it possible for the law that closes large retailers on Christmas Day to also apply to New Year’s Day.

Following a parliamentary petition by the trade union Usdaw, the Scottish Government previously launched a consultation on whether to enact this part of the legislation.

Usdaw's petition said many of its members feel they are not getting the time off they need over New Year.

Speaking in Holyrood, Mr Arthur said: "Having carefully considered responses to the consultation, the prevailing economic conditions, and the options available to us under this legislation, it is with regret that I can confirm we will not be making an order."

He said employment law is reserved to Westminster, and the existing legislation would only restrict trading in stores over a certain size and would not cover all employees. 

Mr Arthur added: "Simply closing stores will not prohibit restocking, deliveries or online shopping, so employees may still be required to work.

"Crucially, it also does not guarantee that those who do get the day off will be paid for it.

"I am clear that this legislation cannot deliver what we as a government and what the unions wants: better conditions for all workers.

"We are therefore unable to guarantee paid time off or protect all workers under this Act."

Scottish Labour MSP Daniel Johnson said union members would feel "let down and betrayed" by the decision.

But Mr Lonsdale said the move was "good news for shoppers, for retailers, and for our hard-pressed retail destinations".

He said: “There was never any clear evidence that a permanent trading ban was proportional – the onus should remain on individual firms to decide what the best approach for the business is depending on customer demand and availability of colleagues.

“This is a welcome fillip for the industry at a time when it is under immense pressure. 

"With shopper footfall down by a fifth, the vacancy rate at a six year high, and sales stuck in the doldrums it was essential the Scottish Government clearly demonstrated it was on the side of business."