The Chancellor is right to attempt to stimulate consumer spending with tax cuts, according to the British Retail Consortium.
Reacting to yesterday’s Pre-Budget Report, BRC director general Stephen Robertson (pictured) said: “Businesses require certainty. It makes me nervous that the Chancellor has announced several major changes which are only temporary, but these are unusual times. With inflation under control, the Chancellor is right to seek to help customers and put the economy back on course to stability. I hope this complex package of measures is economically rather than politically driven.”
Robertson believed the government’s move to reduce VAT was a modest but welcome boost for hard-pressed households: “It must be just one of a range of reviving measures, including cuts in income tax and interest rates. Getting the economy up and running is vital and, in this fiercely competitive climate, our members will certainly be passing this on. Shops will cope, but implementing a new VAT rate in just a week will be exceptionally difficult for customers and retailers at their busiest time of year. IT system changes, replacing shelf labels and stickering-over prices on packs will be a mammoth and costly task. Staff will inevitably be diverted away from serving customers and small retailers will find all this particularly difficult to accommodate.”
On the planned April 2011 National Insurance increase Robertson said: “Retail employs nearly three million people, 11 per cent of the workforce. In 2011 the Chancellor believes we will just be emerging from recession. This seems an extraordinary time to be increasing this tax on jobs.”
