Chancellor Jeremy Hunt said the British economy is "proving the doubters wrong" and will avoid recession, as he delivered his first full budget speech to Parliament today (15), revealing a raft of measures, including additional free childcare, changes to prepayment meter charges and a rise in defence spending.
However, UK's retailers bodies have given a lukewarm response of today's announcement.
The Federation of Independent Retailers (the Fed) says the Chancellor of the Exchequer’s Spring Budget failed to address a number of factors that are threatening the very existence of many smaller retail businesses.
A major disappointment for smaller shops is a lack of support on high energy bills. And while a continued freeze on fuel duty is of some comfort, a hike in tax on alcohol and tobacco is another blow.
The Fed’s National President Jason Birks said: “I and other trade associations wrote to the chancellor and the business secretary just last month imploring them to provide the necessary help for struggling small businesses.
“It is, therefore, extremely disappointing that our calls for assistance have not been answered.”
Birks said the tax rises on alcohol and tobacco will also lead to an increase in illicit trading, which again is harmful to honest shopkeepers and fuels organised crime.
“The chancellor has shown a complete disregard for shops that are the lifeblood of their local communities. I make no bones about it - we will see many forced to close their doors for good as businesses become unviable in the current economic climate," he added.
Responding to the Chancellor’s Spring Budget, Helen Dickinson, Chief Executive of the British Retail Consortium, said many businesses are weighed down by a myriad of higher costs right through the supply chain.
"Government must do more to limit one of the biggest drags to retail investment, which is oncoming regulatory burdens heading down the track, or risk a crash in business investment and further inflationary pressures.
“The Chancellor understands the need to train people to re-enter the workforce, yet he missed a key opportunity to fix the issues with the Apprenticeship Levy system that would support this very goal. Over the last three years, businesses have lost £3.5bn in unused Levy funds.
"To break this cycle of wasted investment, it is vital that Government allows businesses to use their hard-earned Levy funds for a wider array of skills courses. Without spending a penny, the Chancellor would increase investment in our workforce, helping businesses to prepare the UK economy for the skills it needs.
The British Independent Retailers Association (BIRA) has said the forecast for the future from today's Spring Budget announcement looks brighter - but warns that businesses still are in for a rough few months ahead.
Andrew Goodacre, CEO of BIRA said that Chancellor was upbeat about the economy in that we are likely to avoid a recession and forecast growth is better than expected.
"We wanted to hear about plans for growth and we were told about new investment zones, increased capital tax allowances for business investment and £200M in local regeneration. These are positive measures but long term are not necessarily addressing the challenges faced by businesses on the high street today.
“We were not expecting much from the Budget today and while we are pleased with the focus on growth, many of the big announcements are focused on long term investment.
"The pressures of inflation, high energy costs and energy support set to reduce by 95% in April, and wages set to increase by 9% in April. This budget may improve consumer confidence, but it does little to boost the confidence of businesses on the high streets throughout the UK," he added.
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