Retail and other business organisations have given a cautious welcome to this week’s Autumn Statement by Chancellor George Osborne, but are warning that the help given to consumers and businesses may not go far enough.
The Chancellor has addressed a number of the concerns we raised with him,” said British Retail Consortium director general Stephen Robertson. “His measures should provide some help to the hardest-hit families and may go some way to reversing the trend of falling consumer spending, but the challenge for the next12 months will be to rebuild consumer confidence and stimulate private sector investment.
“A number of these proposals have the potential to help households and businesses but may not go far enough, particularly if the Eurozone crisis deepens.”
Amongst his announcements, the Chancellor confirmed widely-anticipated plans for the one-year holiday on business rates for small businesses – due to expire in October 2012 – to be extended for a further six months.
Osborne believes 500,000 companies will benefit from the tax break, with 330,000 not paying any business rates in 2012-13.
The holiday offers 100% relief on business rates up to £6,000, with progressively smaller rebates on amounts up to a cap of £12,000.
The Chancellor says that this will mean a third of all shops will have no business rates liability until April 2013.
“This extra rate relief is clearly good news for some small retailers,” Robertson said, “but a qualifying rateable value below £12,000 is a comparatively rare thing in south east England.”
And Liz Peace, chief executive of the British Property Federation, said: “While it is very welcome that small businesses – and particularly retailers – can be helped in this way it’s disappointing that this has not been extended to those businesses and landlords who own empty shops, or indeed other business premises.
“Taxing empty property continues to suck investment out of our towns and cities.”
The Chancellor also announced plans to tackle youth unemployment with a Youth Contract to incentivise businesses to take on young people who are out of work.
It was welcomed by CBI director-general John Cridland, who described the contract as “excellent news for young people across the country. This will encourage firms to take a chance on inexperienced young people and help tackle the scourge of youth unemployment.”
The BRC was more reserved in its reaction, though. “Retail is at the heart of providing jobs for young people,” said Robertson. “There are now over a million 16 to 24 year olds without jobs. But there are another million from that same age group who are working – in retail. Youth unemployment would be worse without retailers giving young people the breaks they need.
“More than four in 10 new employees taken on by the sector in the last 12 months were aged between 16 and 21. Support is welcome but it would be better to reduce government-imposed burdens generally rather than introduce a bureaucratic job subsidies scheme.”
The Chancellor also aims to safeguard bank lending to SMEs with a National Loan Guarantee Scheme. The BRC said the credit-easing measures would help retailers. “But they also need the prospect of a return that makes that investment worthwhile. This requires the government to improve the prospects for consumer spending,” Robertson said.
Scrapping the 3p rise in fuel duty scheduled forJanuary would also be “welcome help for hard-pressed customers and businesses already suffering big increases in many of their costs. This should help confidence. But the Chancellor must continue to be flexible,” Robertson stated. “If oil prices remain high he should stand ready to drop entirely the increase he is postponing until August.”