Retailers caution about the potential impacts of the Autumn Budget.
- Employer National Insurance rise to 15% sparks industry concern.
- Retail sector might face an annual increase of up to £7 billion in costs.
- Job losses and price hikes seen as inevitable by industry leaders.
- Calls for dialogue with the Chancellor to seek solutions.
Retail leaders have expressed significant concerns over recent fiscal policy decisions, specifically those outlined in the Autumn Budget. A letter signed by nearly 80 executives from prominent firms such as Marks & Spencer, H&M, and JD Sports highlights the anticipated economic repercussions for the retail industry.
The Budget decision to raise employer National Insurance contributions from 13.8% to 15% is claimed to be a key factor in potential job losses and the certainty of increased prices. As this policy takes effect, the retail sector could endure an annual financial impact reaching up to £7 billion.
The letter from the British Retail Consortium articulates the retail industry’s apprehension over the government’s approach to fiscal adjustments, particularly at a time when the sector is already heavily taxed, contributing 55% of profits in business taxes. Retailers argue that these measures will exacerbate inflation, hinder wage growth, result in store closures, and impact jobs, especially entry-level positions.
The signatories of the letter have urged a meeting with Chancellor Rachel Reeves. They propose discussions around modifying the implementation timelines of certain policies, including National Insurance thresholds, packaging levies, and business rates, to lessen the burden on businesses and consumers alike.
Adjusting the timing of these policy changes, they argue, would provide the retail industry with the necessary time to adapt, potentially mitigating adverse outcomes on high streets and consumer prices.
Retailers emphasise the need for carefully considered policy adjustments to prevent negative economic impacts.
