On 22nd November, the Chancellor is expected to deliver a high-stakes Budget aimed at resetting the political agenda after conference season. It comes at a time when the UK economy has gone from the fastest growing in the G7 to the slowest, with once-in-a-generation changes fast approaching. Amid the febrility of the current political landscape and the unknowns of Brexit, what’s needed is a Budget that lays solid foundations for growth and productivity. And there’s no better yardstick than the cost of living and the daily realities of ordinary UK shoppers.
The unique nature of retail places it at the heart of all communities and makes it a bellwether industry, providing employment for three million people and the bread and butter of daily lives. Government Ministers rightly speak of the inherent value of high streets to our communities. Yet the current political and economic landscape is increasingly testing for retailers and, in turn, its customers.
The UK has world class retailers that have proved adept at responding to the accelerating pace of change of recent years. However, the industry is at a crossroads. Retail sales growth, and hence retailers’ profitability has been on a downward trend for nearly three years and with it their investment intentions and employment levels. At a time of sweeping changes, government-imposed burdens are squeezing firms’ margins and hitting consumer confidence. The unintended consequence is direct pressure on shopping.
For retailers, high-streets and communities, this perfect storm will be compounded if ministers fail to act on the oppressive level of business rates, which will likely see an extra quarter of a billion pounds added to the already onerous burden on the industry next Spring. For many much-loved shops, this may be the last straw. Across the country, especially in economically deprived and vulnerable communities, the cost of failing to take action will likely be seen in yet more dark and empty shops and gap-toothed high streets. Our submission to the Chancellor highlights this.
Decisions that the Government takes now will have a significant influence on how far retail is able to help play a role in building an economy that works for everyone both tomorrow and in the post-Brexit world. In practice, it means we need action to keep the cost of living down for shoppers by not increasing income tax rates for the vast majority of taxpayers. It also means we need a bold Industrial Strategy with a clear delivery timetable and measurable progress to help retailers boost productivity. And our economy would benefit so much more if ordinary retailers had greater flexibility in how their hefty apprenticeship levy funds can be spent, for example.
Amid heightened economic uncertainty, the focus must be on instilling confidence not damaging it, encouraging not deterring the business investment necessary to meet ever evolving customer expectations and keeping down the cost of living not ratcheting it up. We need a Budget that ensures growth and productivity reaches all parts of the UK and the judgement of it must not lie in the fury and froth of the next morning’s headlines but the realities of lives of ordinary UK shoppers.