Responding to the Chancellor’s Budget, Helen Dickinson, Chief Executive of the British Retail Consortium, said:
“The Chancellor has listened to many of our concerns and we welcome the extension of key business funding schemes. This announcement provides some targeted support to struggling businesses across the country. Action to support the retail industry will be vital to reviving the economy – including business rates relief, restart grants and loans, and an extension to the furlough scheme. However, for many retailers the devil will be in the detail, with caps on funding limiting access to this support. Retail accounts for over three million jobs, spread across every region of the UK; supporting the success of our industry will be essential to unlocking consumer spending and driving forward the UK’s economic recovery. The Chancellor must keep the situation under review, as we wait to see how the economy responds to reopening.”
Covid-19 relief
Business rates
“The Chancellor has taken steps to avoid the business rates cliff edge on 1 April, and the three-month extension will provide essential funding at this challenging time. Beyond this point, relief is capped at only £2m for closed businesses, a tiny fraction of their total liability. Without further funding, it is likely that many ‘non-essential’ retailers will struggle under sluggish consumer demand and high Covid costs. The business rates system remains broken; it is vital that the ongoing business rates review delivers on its promise to reduce the burden on retail which already results in store closures and job losses.”
Restart grants
“Restart grants provide a vital injection of funding during this extremely challenging period. No businesses have remained untouched by the pandemic and we welcome this cash to help ‘non-essential’ retailers improve safety measures, build up stocks, and prepare for reopening. However, the Chancellor gave no clarity on EU state aid rules - if these continue to apply to grants for closed businesses, then many larger companies, employing hundreds of thousands of people, will miss out on millions of pounds of vital support. We need an immediate amendment to the state aid system which is stopping impacted companies from accessing the grants which were announced today, and earlier this year.”
Recovery loans
“We hope the loan scheme will play an important role in addressing the cash flow challenges that many firms are facing. But it is vital that the aspirations of the Chancellor are met by action from commercial lenders to ensure that this all important finance reaches its destination quickly.”
Furlough extension
“We welcome the extension of the furlough scheme, which provides retail colleagues with a safety net against unnecessary job losses. This generous scheme will help protect the future of the 600,000 retail employees currently on furlough.”
Restoring the public finances
Taxation
“We understand the need for increased taxation to restore public finances and cover some of the vital spending on business support. Corporation tax is a fairer way to achieve this as it ensures those with the broadest shoulders take the largest burden. However, increases in corporation tax must go hand in hand with bringing business rates down to a sustainable level and prevents the shuttering of many more local shops. On its own, corporation taxes would just be another tax on an industry that has faced rounds of forced closures, high costs of implementing Covid-safety measures, and the recent scrapping of tax-free shopping. It is vital that the ongoing business rates review meets its objective to reduce the rates burden on retail, which is causing stores to close and jobs to disappear.”
Building for the future
On Apprenticeships
“The additional incentive to take on new apprentices is welcome, but what is most important to the success of such training and the upskilling of our future workforce would be greater flexibility in how firms are able to spend their Apprenticeship Levy funds.”
Investment and Digital:
“The UK retail industry is a global leader in digital innovation and online retail has provided a vital lifeline for many households across the country over the course of this pandemic. Support for businesses to improve digital skills and develop their online offering will boost an already dynamic sector.
“The 'super-deduction' must include investment in new technology. The UK retail industry’s investment in digital innovation, which is already world-beating, could be further boosted if this is tailored appropriately. This in turn will create more high value jobs and added value for UK plc.”