New cost burdens announced in today’s pre-election Budget will undermine retailers’ ability to maintain and create jobs.
So claims the British Retail Consortium, which also says that while Chancellor Alistair Darling has made a modest start to demonstrating where he will make future public spending cuts the Budget speech gave no detail.
And the retail body also described the 2.2% increase in the minimum wage increase – announced immediately after the Budget – as “irresponsible”.
Commenting on the Budget, BRC director general Stephen Robertson said: “Reviving consumer confidence is the route to growth and jobs. Thank goodness no new tax rises were announced. But customers needed to hear a convincing plan for bringing the public finances under control.
“The Chancellor offered no reassurance that he understands spending cuts must be the key means to tackling the deficit and not tax rises, which will wreck recovery. We heard indications that the government is prepared to cut but, when we see the detail, it will need to be convincing. Knowing there’s pain to come but not where or how much is damaging demand.
“At the same time the Chancellor announced or confirmed new cost burdens which will undermine retailers’ ability to maintain and create jobs.”
Robertson said the BRC welcomed exempting businesses with a rateable value up to £6,000 a year from business rates for 12 months, which was useful for the smallest shops.
“But it makes no difference to established retailers, the ones providing most of the UK’s 3m retail jobs.”
And he said the government’s failure to drop the 1% increase in employer and employee National Insurance planned for April 2011 would hit retailers hard.
The government also announced today a 2.2% increase in the adult minimum wage from £5.80 per hour to £5.93, from October this year. The BRC has been campaigning for a rise in the range of 0 to 1%.
“This increase is downright irresponsible,” said Robertson. “How can an increase virtually double last year’s be justified?
“The BRC supports the principle of the minimum wage, but it’s sheer madness to be forcing new costs on this scale onto retailers and their suppliers.”