BRC says chancellor must get public spending to save retail

The British Retail Consortium (BRC) is advising “swift action” in the Chancellor of the Exchequer Rishi Sunak’s "Summer Economic Update" today - to boost public spending in the wake of the COVID-19 crisis.

The BRC says the ongoing pandemic has created an “unprecedented challenge” for the retail industry. Now, three weeks after shops reopened in England and Northern Ireland, footfall remains down by half compared with the previous year.

According to the ONS, during April and May, non-food stores lost an average of £1.6bn in sales per week. This drop in spending directly impacts over three million people employed in retail – with some jobs already being lost, and many more expected.

The BRC is urging for action to help rebuild the retail industry and the wider economy, and it believes certain measures are required to boost consumer spending and protect thousands of retail businesses who face “concrete challenges to their commercial viability”.

Those measures include a temporary cut in the headline VAT rate and a reduction in income tax for lower income households - to boost demand and raise consumer spending.

The BRC is all calling for fast action on commercial rents to protect viable retailers from huge rent bills that have built up while many were closed to the public.

It also says the government should look to support retailers and other businesses by reducing or eliminating parking charges in order to encourage footfall and boost spending in local shops, as well as providing more flexibility in how employers can use Apprenticeship Levy funds in order to support the delivery of wider skills training and to tackle the likely rise in unemployment.

Helen Dickinson, CEO of the BRC, said: “The government has shown its resolve in trying to protect jobs and businesses during this pandemic - from the Coronavirus Job Retention Scheme, to rates relief and the various other financing support. But it is vital we do not fall at the last hurdle. The road to recovery relies on the government finding ways to boost consumer spending throughout the economy. Without it, jobs and shops will be lost, further threatening the UK’s recovery.

“A temporary reduction in VAT, or similar actions to boost spending, would get the nation back onto its high streets and help revive the economy.”