Retail leaders caution the government over the potential impact of recent budget changes.
- The increase in National Insurance could lead to significant job losses and higher prices.
- Nearly 80 retail executives have voiced their concerns in a formal letter to the chancellor.
- Businesses highlight the challenge of absorbing new costs in the retail sector.
- The group seeks a dialogue with the government to address these pressing issues.
Retail CEOs from major companies including Marks & Spencer, H&M, and JD Sports have united to express their worries about the impact of the latest budget. These leaders warn that the rise in National Insurance for employers, from 13.8% to 15%, will likely result in job losses and increased prices. The changes could impose an additional £7bn annual cost on the sector.
The British Retail Consortium, representing nearly 80 retail figures, has communicated their apprehensions through a letter. They emphasise the potential consequences for inflation, employment, and investment, describing the retail industry as already heavily taxed, with businesses contributing 55% of profits in business taxes.
This increase is seen as an unsustainable burden that will force many retailers, both large and small, to raise prices and cut jobs, particularly affecting entry-level positions. The letter stresses the potential for inflationary effects, slower wage growth, store closures, and reduced employment opportunities, affecting high streets and consumers nationwide.
The group has called for a meeting with the chancellor, Rachel Reeves, to explore possible solutions. They propose adjustments to the timing of new fiscal measures, advocating for a phased approach to implementing the National Insurance increase, reconsideration of packaging levies, and a review of business rate proposals.
Retailers are pressing for these discussions to mitigate the negative effects on businesses and the wider public. By revising the timeline of these changes, the industry hopes for more manageable transitions and reduced impact on high streets and shoppers.
The retail sector is seeking urgent discussions with the government to avert negative repercussions from the budget changes.
