Government’s announcement slammed by BIRA and BRC amid fears of job cuts
The government has come under fire from retailers’ groups angry that the spring statement announced on Wednesday, 26 March, has done nothing to help the sector about to deal with £7billion in extra costs this year.
With independent retailers in particular on the back foot due to the upcoming increased employer national insurance contributions, higher national minimum and living wage, the new packaging tax, and cuts to business rates assistance, both the British Independent Retailers’ Association and British Retail Consortium have laid into chancellor Rachel Reeves saying her policies will do the opposite of her professed claim to want to grow the economy and create jobs.
BRC chief executive Helen Dickinson said the result of the extra costs “will be higher prices, fewer shops and less investment in jobs” and BIRA CEO Andrew Goodacre said the spring statement has failed to address the “perfect storm” of pressures facing indie retailers across the UK.
In parliament, the chancellor said the Office For Budget Responsibility (OBR) predicts the economy will grow by 1% in 2025, down from its October prediction of 2%, adding she was “not satisfied with these numbers”.
Helen said the BRC welcomed the chancellor’s commitment to “drive growth in the economy” and describes the retail industry as keen to play its part in this mission: “As the chancellor aims to drive down the number of those who are economically inactive, there is a need for better routes back into work for those that want or need it after a period of inactivity. The retail industry provides a perfect solution.
“It offers local, flexible jobs, often requiring few qualifications, and part-time jobs that allow people to find their feet, work as much or as little as they are able, and balance work with other important life commitments.”
However, she added the £7bn in additional costs from the budget is driving concern: “Uncertainty about how the Employment Rights Bill and new business rates policy will be implemented mean it will be much harder for retailers to keep creating these kinds of jobs.”
And Helen called for “clarity” about the implementation of the policies from the government to “avoid unintended consequences”, adding: “A serious plan for retail growth would support the industry to invest in new jobs and keep prices down for customers.”
In the run-up to the spring statement BIRA had outlined three key priorities for the chancellor to address, and Andrew commented: “We specifically called for continued investment in our High Streets, proper funding to tackle retail crime, and a statutory requirement for local authorities to prioritise economic development. It’s disappointing that Rachel Reeves has not responded to any of these crucial areas in her statement.
“The chancellor spoke about being ‘impatient for change’ and the British people being ‘impatient for change’ – our members are certainly impatient for meaningful support that recognises their vital contribution to local economies and communities.
“While we welcome the chancellor’s focus on economic growth, we are deeply concerned that the spring statement has overlooked the immediate crisis facing independent retailers. Our members are confronting a perfect storm of rising costs – from the 140% increase in business rates to the national living wage rise and national insurance changes – all while consumer spending remains subdued.
“The chancellor’s forecasts of improved household income may offer some long-term optimism, but they do nothing to address the immediate cash flow challenges our members face. Many independent retailers are making difficult decisions right now about whether they can continue trading under these conditions.”
And it’s not just independent retailers who will suffer, with shadow chancellor Mel Stride hitting back saying Rachel Reeves has “taxed jobs and wealth creation, she’s destroyed livelihoods, businesses clobbered, big and small companies, the backbone of our economy, enterprise crushed on the altar of her ineptitude.
“Morrisons losing 200 jobs, Tesco 400, Sainsbury’s 3,000 jobs lost, no wonder The Federation Of Small Businesses say that, outside of the pandemic, business confidence has been left at its lowest level on record.”
