Budget must focus on spending cuts, not tax hikes says BRC
01 March 2010 09:35
The British Retail Consortium (BRC) has said that the last budget of this Parliament should prioritise cutting non-essential public spending over tax rises – or risk a return to recession.
Published today, the BRC's Budget submission says: "The key challenge for the Government in the Budget is to outline a credible plan for addressing the fiscal deficit without precipitating a 'double dip' recession…A significant focus must be on driving efficiency and productivity in the public sector…there is a need to review all options, including ceasing areas of activity …and de-commissioning services that Government can ill afford to continue".
Stephen Robertson, BRC director general, said: "The size of the country's deficit means action must be taken. To nurture our fledgling recovery, the main tool for dealing with the deficit has to be cutting non-vital public sector spending.
"Some tax rises maybe inevitable, but no Government should rely on tax hikes to reduce borrowing. The increases would have to be so large that customers' ability to spend would be wrecked – risking a double dip recession".
In addition to tackling the public finances, the BRC Budget Submission identifies other key themes to help retailers play their part in achieving a return to sustainable economic growth.
These include capping this year's National Minimum Wage increase to be no higher than 1% and for the 1% rise in National Insurance planned for 2011 to be scrapped completely.
Mr Robertson added: "Retailers are vital to jobs. Retailing is the UK's largest private sector employer. We'll be leading the UK into recovery. It's crucial this Budget gives us the support we need to maintain and create jobs and doesn't pile on damaging new costs".
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