With the Emergency Budget due this month, the British Retail Consortium (BRC) is calling on the Chancellor to build on the Government’s initial approach of focusing on public spending cuts over tax rises to tackle the deficit, but cautions against making reductions too quickly.
In its Budget submission, published today (7 June), the BRC says it supports the Government’s aim of seeking an 80:20 split in public cuts relative to tax increases. The retailers’ organisation also believes halving the deficit over four years strikes the best balance between the need to reduce the deficit in the short-term and support strong economic growth in the long-term.
Stephen Robertson, BRC director general, said: “The sheer size of the deficit means action must be taken, but the response mustn’t harm the fragile recovery.
“It’s the right approach to focus on public spending cuts, rather than tax increases. But the Government mustn’t risk cutting too quickly. The best way to protect long-term growth is to halve the deficit over four years, rather than three.
“VAT shouldn’t be increased as it would have negative impacts on retailing and the wider economy. Zero-rated items, such as food, books and children’s clothing, shouldn’t have VAT applied to them as it would hit the most vulnerable members of society the hardest.
“The latest figures show tax avoidance costs the economy around £40bn in lost revenue every year. We welcome the Government’s proposal to take a tougher stance on tax evasion and believe more resources should be devoted to improve the payment level of money owed.
“The Government must make long-term decisions that result in a consistent and predictable business environment – this will encourage investment.”
Source: BRC
