RETAILERS are today urging the Chancellor to extend the VAT reduction and freeze business rates in his upcoming Budget to help the sector through the “toughest trading conditions in decades”.
The British Retail Consortium (BRC) is calling on Alistair Darling to introduce a range of measures for the battered sector.
Its plea comes as reports suggest retailers are heading for a showdown with Mr Darling over plans to raise business rates next month by more than £1 billion.
Retail sector heavyweights such as Topshop owner Sir Philip Green have sought to change the Government’s decision to raise rates by 5% as they fear it could push struggling companies into insolvency and lead to thousands more jobs losses.
The BRC said 15% of shops are already predicted to close amid the recession, with up to 200,000 jobs axed as the economic woes hit the high street hard.
In its Budget submission, it is asking the Chancellor to offer a range of help, including freezing all new business rate burdens, keeping increases in the national minimum wage to below 1.5% and cancelling the proposed 0.5% increase in National Insurance contributions.
The BRC also wants a delay to the planned move to end the temporary reduction in VAT from 17.5% to 15%.
VAT is scheduled to rise back up to 17.5% this December – the “worst possible time of year” for retailers, according to the BRC.
“December is the busiest period for most retailers,” it said.
“It cost the sector around £90 million to implement the cut to 15% and because of the timing it will cost a similar amount to reintroduce the 17.5% rate.”
The BRC is hoping to see the reintroduction of the rate postponed to at least January 2010.
Stephen Robertson, BRC director general, added: “Retailers don’t want handouts, but we can’t cope with increasing Government-imposed handicaps.
“Retailing is at the heart of every local community, providing one in nine UK jobs. The Government must work with us to protect these jobs and promote new opportunities.”