The Chancellor dealt a blow to retailers today by ignoring calls for a rethink on the business rates rise coming into effect next month.
George Osborne’s Budget leaves retailers still facing a 5.6% hike in rates, based on last September’s rate of inflation.
“It’s very disappointing that the Chancellor has done nothing to scale back the impending 5.6% increase, which will add £350m to retailers’ costs,” commented British Retail Consortium director general Stephen Robertson.
“Inflation is already much lower and likely to fall further. The opportunity, previously announced, to postpone part of the bill will help some but retailers use a lot of property and imposing an increase on this the scale is hugely significant for the sector.”
He said that reducing corporation tax further and faster – to 24% from next month – would make investment in the UK more attractive. “But it is not the only business tax that matters. An additional 1% reduction in corporation tax does not make up for a 5.6% increase in business rates.”
The Chancellor also confirmed that Sunday trading laws are to be suspended for eight weeks in the summer to coincide with the Olympic Games, from July 22. But the BRC said it must not be the only part of the government’s deregulation plans.
“The Chancellor recognises the stranglehold regulation has on growth, but the repeated red-tape-slashing promises of the last two years have yet to meet the reality,” Robertson said. “The government has done some long-overdue clearing out of moribund rules but it must follow through on reform. One-in-one-out is a good principle but it must mean burdens being removed from retail for every new one added.”
Any hope that George Osborne would cancel August’s fuel duty increase today were also dashed.