Reeves ‘needs to do more to support local retail’
RETAIL industry leaders have rounded on Chancellor Rachel Reeves for not using her Spring Forecast statement to set out measures to help the sector boost the UK economy.
They argued that the fragile state of the economy and rise in unemployment forecasted by the Office for Budget Responsibility should have been a catalyst for action to cut costs for retailers so that they could help to return the nation’s finances and jobs market to real growth.
Scottish Grocers’ Federation chief exec Pete Cheema said: “The Chancellor has missed a real opportunity to lead the way and re-energise local economies by supporting local retail.
“Our sector doesn’t just provide essential local services and critical local employment, it is also an economic driver.”
He argued proper investment in convenience retail would have provided an economic “multiplier effect” for every c-store in every community.
He said that task would now fall to the Scottish Government, which is to receive an additional £900million as a result of heavier taxation on products such as alcohol, tobacco and vapes.
Cheema said: “Ultimately, price increases land on customers and businesses. So, it is only right that those costs are offset with additional support to ensure local stores, and the services they provide, remain viable.”
He urged ministers to look again again at issues such as business rates reliefs and additional resources to clamp down on retail crime and illicit trade.
The Fed’s national president, Hetal Patel, said: “Yesterday’s figures are concerning and align with feedback from our members, who say they are less likely to employ extra staff in their businesses because they are worried by higher Government costs.”
He argued the hike in employer National Insurance contribution costs and repeated above inflation growth in the national living wage were of particular concern.
Patel added: “The Fed continues to share concerns with government about certain aspects of the Employment Rights Act, which may unintentionally make it harder for independent retailers to take on new staff by adding regulatory complexity at a time of greater financial vulnerability for our members.”
Helen Dickinson, chief exec at the British Retail Consortium, echoed those views called for more to be done to protect jobs in the industry.
She said: “Employment costs rose by more than £5billion last year, and poorly implemented reforms in the Employment Rights Act risk adding further cost and complexity at the worst possible moment. Reforms must raise standards without deterring hiring.
“Retail has unparalleled reach across the country, and stands ready to work with the Government to ‘spread’ and ‘unlock’ opportunity in every part of Britain.
“But, to do so, Government must get a grip on the cost of doing business so retailers can invest confidently in people, places and prices.”
Key points of the forecast include the fact that the UK’s real GDP growth is expected to slow from 1.4% in 2025 to 1.1% this year, while the unemployment rate will rise from 4.75% last year to 5.3% in 2026.
However, inflation is projected to ease from 3.4% to 2.3%, interest rates are anticipated to decline from 3.75% to 3.3% and nominal weekly earnings are expected to grow by around 3.5% in 2026.
