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"Any tax increase is
going to sap the customer's ability to buy and I think that could push us a few
points backwards ... It (growth) could come back to 0 percent," he said.
Retailers fear the new Conservative-Liberal Democrat coalition government's
emergency budget on June 22 will raise the basic rate of VAT (value-added tax)
from 17.5 percent to 20 percent and could extend the tax to previously exempt
areas such as food and children's clothing.
"If VAT must go up I'd rather it went up next year than this year," said
Robertson, adding that the government must provide "lashings of notice" for the
sector, which generates about 10 percent of UK GDP and employs 3 million people.
Robertson welcomed government plans, announced on Monday, to shave 6.2 billion
pounds off the UK public deficit this year by cutting spending.
The coalition is expected to detail more significant spending cuts in the
emergency budget in order to convince markets that Britain is serious about
getting government borrowing down.
"That (spending cuts) must be far and away the bulk of what the government does.
They need to be very judicious about how they introduce any tax increases
because any more burden on business, and retail which is central to business, is
going to slow down the recovery," he said.
The BRC wants government to ensure that future rises in the national minimum
wage do not rise above the average growth in earnings.
A 2.2 percent increase, announced in March, and due to be implemented in October
will take the hourly rate to 5.93 pounds. That compared with a 1 percent rise in
UK employee earnings in the year to end-January, 2010.
"It is crucial that we don't see employment costs exploding because that will
drive out jobs from the sector," said Robertson.
He also wants government action on business rates, a property tax, noting that
the retail sector pays a quarter of all British business rates.
"In the 2010 revaluation that came in last month for some retailers their rates
bill went up over 9 percent ... So we've got to have affordable rates in this
country," said Robertson.
Source:
Reuters UK,
United Kingdom, dated
26/05/2010
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