Shops tell Osborne to lift sector by going easy on new tax hikes

Julian Harris
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RETAILERS yesterday sent a list of demands to George Osborne ahead of the chancellor’s Autumn Statement next month, calling for measures to save the struggling sector.

Osborne should freeze business rates, scrap the delayed plans to increase fuel duty, and ensure that the minimum wage does not rise at a rate that “does not exceed long-term movements in average earnings,” the British Retail Consortium (BRC) said.

“Rates have risen by over 10 per cent in the last two years, and are set to rise by 2.6 per cent in April next year if they are based on September’s Retail Price Index (RPI),” BRC director general Stephen Robertson said.

“This would add over £175m to retailers’ bills at a time of relentlessly tough trading conditions.”

Yet Osborne is unlikely to hint at many fiscal giveaways in his Autumn Statement, due on 5 December, as he struggles to reduce the government’s annual deficit to the extent that he promised on entering office in May 2010.

Yet the deficit could appear £35bn lower than previously expected, after Osborne announced plans at the end of last week to claim surplus cash from the Bank of England’s quantitative easing scheme.

The move is likely to cost the Treasury more in the medium run, but could provide some immediately relief and allow scope for fiscal stimulus.

The BRC also suggests abandoning the 3p a litre hike in fuel duty, planned for January, “to support hard-pressed consumers and businesses.”

“The chancellor should not pile more pain onto struggling households or retailers by adding extra costs,” Robertson added.

The retail sector, which employs a large proportion of young people, could be stimulated by being offered a one year holiday from National Insurance Contributions (NIC) for all employers taking on a young person.

The BRC added that the coalition’s Carbon Reduction Commitment (CRC) Energy Efficiency Scheme is “too costly to administer and needs simplifying for all participants”.

The final argument in the BRC’s six point plan called for the government to roll out high speed broadband in order to encourage online shopping. The costs could be covered by cash from the forthcoming 4G auction, the BRC suggests.