Summer Statement a ‘missed opportunity’ for retail

The UK’s ailing retail sector has bemoaned the “missed opportunity” in the chancellor’s Summer Statement to offer further support for the High Street.

While British Retail Consortium (BRC) chief executive Helen Dickinson welcomed the new Job Retention Bonus in helping bring back hundreds of thousands of staff who have been on furlough in recent months, she noted that retailers lost out to the hospitality and tourism industry in this latest announcement.

“The proposals of a VAT cut will be important in reviving these sectors, and the 1.8 million people who work there, however it was disappointing that the chancellor did not extend this measure to the retail industry and the three million people it employs.

“It was a missed opportunity and we hope that the government will reconsider this ahead of the Autumn Budget.”

The BRC stated that Rishi Sunak’s announcement to incentivise apprenticeships will be welcome news for millions of people, but added that the next step must be to carry out a wholesale review of the apprenticeship system, with the aim of creating more flexibility to enable the Apprenticeship Levy to meet the skills needs of retailers.

“Retail is evolving; it is essential that those working in the industry, now and in the future, have the digital and technological skills to capitalise,” commented Dickinson.

Thomas Brereton, a retail analyst at GlobalData, commented: “Retailers will undoubtedly be feeling left out from the chancellor’s statement, as few of the measures outlined address the core issue for non-essential retail – crippled consumer confidence.

“The restoration of confidence is not a straightforward task, requiring greater perceived stability across multiple macroeconomic issues," he continued, adding: "But in the meantime, the chancellor must urgently reconsider providing greater relief for retailers, through some combination of lower business rates, VAT rate reductions, discount stimulus packages and prolonged assistance with furloughed staff.”

Genevieve Morris, head of corporate tax at advisory firm Blick Rothenberg, pointed out that while payments to employers encouraging them to bring back furloughed staff and create new jobs are welcome, targeted measures for specific industries would have been preferable.

“Retail has been incredibly hard hit, and even with the High Street reopening, footfall is down as internet sales increase and many shops simply don’t have the requirement to employ the number of staff that they did before the crisis,” she added.

The Treasury also announced the Eat Out to Help Out discount scheme, which will provide a 50 per cent reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August.

Mark Hart, a partner at Blick Rothenberg, commented that a voucher scheme for the retail sector is also needed to boost spending more widely. “After all the retail sector employs three million people and this will give a boost to the economy generally.”

Gail Cohen, director general of the Gift Card & Voucher Association, agreed that it was disappointing that the previously-mooted £500 voucher scheme was omitted from the statement.

“It is a missed opportunity to show support for businesses that have had to contend with unprecedented challenges over the past few months – there is little doubt that many companies now need a major boost if they are to stay afloat amidst current and future turbulence.”

The association is therefore launching a campaign for the tax-free gift card limit to be raised from the £50 currently permitted through HMRC’s Trivial Benefits Allowance. “By increasing this limit to £500 - as has already been successfully achieved in other countries such as Sweden and Ireland - government will incentivise employers to take advantage of the scheme, encouraging the use of gift cards as a reward which can then be spent with local businesses,” argued Cohen.

Not everyone was sour about Sunak’s statement, with ParcelHero head of consumer research David Jinks welcoming the new £2 billion kickstart scheme for 16 to 24 year-olds.

“Many couriers and retailers are looking to take on new staff to cope with unprecedented levels of home deliveries and e-commerce.

“New funding measures such as £1,000 per new trainee, £2,000 for new apprentices and a further £1,500 for apprentices over-25s will also boost logistics companies who make considerable use of trainees and apprentices in distribution centres and vehicle maintenance roles,” he added.

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