Member News
23rd November 2012Retailers are asking the Chancellor to promote growth through six targeted measures in his Autumn Statement next month.
“We want the Government to focus on a small number of significant amendments, some robust measures to support retailers and support employment,” Tom Ironside, Business and Regulation Director at the British Retail Consortium (BRC), told Central Lobby.
“It has been a very tough trading year. Consumer confidence remains weak, people have significant amounts of debt and are being cautious.”
The BRC has written to George Osborne setting out the sector’s priorities for the economy and outlining six measures that can help retailers, who employ three million people, make the greatest possible contribution to the economic recovery.
The first is a freeze on business rates next year.
“Together the business rates are a £100bn cost for retailers, and it has risen by £700m in three years, and are set to rise by 2.6% in April next year, adding a further £175m,” said Mr Ironside.
“Against the backdrop of weak trading conditions it adds significant costs to retailers.”
The BRC, along with many Tory MPs, also want Mr Osborne to abandon the planned increase in fuel duty by 3p a litre in January 2013.
Mr Ironside said that would support both retailers and consumers.
“Anything that impacts on customers means they have less money to spend on both essential items and discretionary items. That is bad for business. It also causes upward pressure on prices.
“We welcome the postponement earlier in the year, but we think that you need to provide additional support for consumers.”
The BRC is also calling for a one year National Insurance Contributions holiday for all employers taking on a young person, and for an assurance that National Minimum Wage (NMW) increases will remain at affordable levels and not exceed long-term movements in average earnings.
Mr Ironside said that retailers “will have a very significant role to play” in helping get NEETs into work.
“The sector employs one million 16 to 24 year olds, actually a very similar number to those currently unemployed,” he said.
“Retailers make a very serious investment, spending £1,275 per annum per capita on skills. That is more than in financial services or manufacturing. We get people to the point where they are employment-ready, and having an NIC holiday is a worthwhile measure.”
On the National Minimum Wage, Mr Ironside said while BRC supports it as a good mechanism to ensure a basic level of pay, it must be sensitive to prevailing economic conditions.
Any disproportionate rises would add more cost pressures to a labour-intensive sector such as retail and undermine retailers’ ability to maintain current employment levels, create new jobs and contribute to growth in the economy.
Mr Ironside said that the maximum rise in the adult rate should be 1.8%.
The BRC has two other measures for the Chancellor to consider as he puts together his Autumn Statement: invest the proceeds of the forthcoming 4G auction in the roll-out of high speed broadband and reform the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme.
“The UK is the global leader for online shoppers and online shopkeepers,” Mr Ironside said.
“We spend more per head online than any other country. Customers here are responsible for a 11% of the world’s online retail sales. But there’s huge potential for expansion, with online retailing becoming a major source of export growth.”
The CRC scheme began in 2009, when retailers were told that all revenues raised would be recycled to “firms who are doing the right thing in terms of energy efficiency of their premises,” Mr Ironside said.
“In 2010 the Exchequer changed the scheme and removed the revenue recycling element of the CRC. It now costs retailers £1bn per annum, it is a new tax, yet they have retained a whole range of administrative measures which sat around the scheme which are now no longer justified.”
The BRC wants the Chancellor to consider an alternative environmental tax such as a levy based on annual energy statements.
“Such an approach could be used to collect revenues equivalent to the CRC, would be simple and transparent, and provide a more equitable solution than that put forward to date,”
Mr Osborne will present his Autumn Statement to the Commons on 5 December.
The BRC is hoping he will listen to retailers.
“We think there is strong case for Government to put in place this credible range of measures,” Mr Ironside said.