Budget will ‘do nothing to turbocharge investment’, says BRC

The British Retail Consortium (BRC) has stated that the latest Budget announcement will “do nothing to turbocharge investment and growth in communities”.

This comes after Chancellor Jeremy Hunt revealed his Spring Budget without many big giveaways for retail businesses.

Hunt resisted calls from business leaders to reduce business rates, reintroduce tax-free shopping for tourists and rework the apprenticeship levy.

Headline policies included another 2p cut to National Insurance, another freeze in fuel duty, an increase in the VAT threshold up to £90,000 and introducing plans to make full expensing permanent.

Helen Dickinson, BRC chief executive, said: “When shops we love shut down, when jobs we need are absent, and when investment we benefit from is lost, it’s our lives and our communities which lose out.

“Retail employs three million people and invests over £17bn annually, yet the industry’s ambition to deliver a net zero, digitally transformed future with higher skilled, better paid jobs means its potential goes so much further. It seems the chancellor does not share in our ambition, and [the] Budget will do nothing to deliver a better future for retailers and their customers.”

She added: “Government inaction will now cost the retail industry £470m extra every year in business rates – money that could have been better spent improving our town and city centres, investing in lower prices, and maintaining jobs and commerce all over the UK. How can a whopping 6.7% tax rise in April be justified, when the Chancellor himself is saying inflation is forecast to be nearer 2%.

“The UK remains the only European economy without a tax-free shopping scheme, meaning we are missing a golden opportunity to boost tourism and spending across the country. Independent research from CEBR shows that the UK economy is losing £11 billion a year because of the loss of tourism resulting from, what is effectively, a tourist tax. Tax-free shopping not only convinces tourists to buy more, but it also attracts shopping tourism, supporting businesses and jobs in the UK.”

Helen Brocklebank, CEO at Walpole, added: “Despite plenty of rhetoric about boosting productivity and foreign direct investment, chancellor Jeremy Hunt scored a huge own goal at today’s Spring Budget by not scrapping the “tourist tax”. It’s a massive missed opportunity to unlock the power of this much needed growth driver for the country.

“By reintroducing VAT-free shopping for international visitors, policymakers could cement Britain’s position as a world-renowned shopping destination, encourage more inward investment and support hundreds of thousands of jobs across regional supply chains. Instead, retailers may now struggle to keep pace with continental competitors; British retailers, including luxury brands, are estimated to already be losing £1.5bn per year as international visits opt to spend in France, Italy and Spain, where tax-free shopping schemes remain in place.”

The latest Budget is the last official fiscal event before the general election but there is speculation that Hunt may hold an emergency Budget in the Autumn before a November election.