Boldness and urgency retailers tell chancellor ahead of Autumn statement

31 October 2011

Restoring customers' confidence to spend and rebuilding retailers' appetite to invest and resume job creation must be the Chancellor's first concerns as he prepares his Autumn Statement.

In a letter to George Osborne, released today (Monday), the British Retail Consortium (BRC) sets out retailers' key priorities for developing a positive agenda for growth.

The BRC's submission says - with consumer spending now in recession, tax increases due to increase the squeeze on household budgets, and retail employment now falling - the Chancellor needs urgently to deliver genuine support for growth by holding back costs under his control.

Retailers and customers need action on:

Holding back Business Rates and fuel costs

Under current convention, April's Business Rates increase is determined by the previous September's Retail Price Index (RPI) inflation figure. September 2011's RPI was a 20 year record high of 5.6 per cent.

A massive 5.6 per cent Business Rates increase next April would come on top of a 4.6 per cent increase this year.

September's RPI is also due to dictate an increase in fuel duty next August. Added to the 3.02 pence per litre increase already due on 1 January 2012 that would mean duty increases next year totalling between 7 and 8 pence.

To support businesses and customers, both of these need a radical rethink.

The Chancellor has the freedom to implement a significantly lower Business Rates increase. He should do that. And both next year's fuel duty rises should be scrapped entirely.

Removing barriers to job creation

If the retail sector is to become a net creator of jobs again, the absolute upper tolerance limit for next year's National Minimum Wage increase is 2.1 per cent. For the longer-term, we're pleased the Government has asked the Low Pay Commission to consider how to produce a system that delivers the clarity and predictability that is crucial to business planning.

Stagnating growth requires a bolder approach to reducing regulation. There should be a moratorium on new employment regulation until growth is firmly re-established.

Improving access to markets

Because the UK is Europe's leader in online retailing – the proportion of UK retailing that takes place online is almost twice the EU average - fully opening EU markets to the UK's online retailers has the potential to drive growth. The UK Government must push the European Commission to deliver its promised single digital market.

British Retail Consortium Director General Stephen Robertson said: “With consumer spending and retail job numbers dropping, rebuilding the confidence of customers to spend and retailers to return to investing and creating jobs has to be the Chancellor's priority.

“He must hold back the costs he is responsible for. Freezing Council Tax offers welcome relief to hard-pressed households. The Chancellor should go further and help businesses and consumers by freezing fuel duty rates.

“Our latest figures show retail job creation cannot be taken for granted. If employment is to grow, it's affordability, not precedent, that should govern property and employment costs. And, eighteen months on from the election, it needs to be accompanied by urgent delivery on pulling down regulatory barriers that are holding back growth.”

The full text of the BRC's letter to George Osborne.

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