Copyright scotsman
Britain’s retailers are “primed” to provide much-needed jobs and investment but any further taxation at next month’s autumn Budget would cripple those ambitions, industry leaders have warned. Higher employment costs, including increased national insurance payments and a hike in the living wage, have seen the UK retail sector hit with £5 billion of additional costs since last year’s Budget. The extended producer responsibility scheme, or packaging tax, is likely to add a further £2bn bill to the industry. The extra costs alongside other inflationary pressures and the general cost-of-living crisis has hit the high street badly, with footfall and spending taking a knock. A number of major chains have been downsizing while several smaller independent shops have gone to the wall. The British Retail Consortium (BRC) said the uncertainty surrounding the autumn Budget, which is still a month away on November 26, was further eroding consumer sentiment amid fears of fresh personal and business levies. Visiting Edinburgh, the BRC’s director of insights, Kris Hamer, said: “The uncertainty around the Budget is killing consumer confidence. It is not ideal holding it so late. We are already in what we call the ‘golden quarter’ where it is make or break for many retailers. “The industry as a whole has had to absorb £7bn of additional costs,” he added. “Retailers are telling us that those costs are holding back their investment in opening new stores and providing a better online experience, as well as providing more jobs. “The UK government wants to create jobs and more opportunities for those economically inactive, and we are an industry primed to provide those jobs. We can only afford to do that if we are not burdened with even more taxation. “Everybody would say they don’t want more taxes, but in terms of unlocking the growth ambitions that the government has, then retail is the place to put some bets as we are closest to consumers.” The most recent sales monitor from sister organisation the Scottish Retail Consortium (SRC) suggested that consumer spending remained resilient in the face of cost-of-living pressures. Total sales north of the Border increased by 1.3 per cent in September, compared with the same month a year earlier. However, adjusted for the effects of inflation, there was a slight year-on-year decrease of 0.1 per cent in sales, by value. Ewan MacDonald-Russell, deputy head of the SRC, said: “The tough truth is retailers are having to run very fast just to keep pace with the very significant public policy costs imposed on them in last year’s UK and Scottish Budgets.” The BRC said its regular monthly survey of 2,000 consumers showed that people were expecting to spend more on the basics given that annual food inflation remained well above 4 per cent. Hamer added: “In terms of discretionary spending, people are looking to eat out, maybe go on holiday. Consumers don’t want to buy more stuff at the moment and that’s part of the challenge for retailers as they look to evolve their offerings.” Chancellor Rachel Reeves is due to deliver her Budget statement on Wednesday November 26.
