Bira comments on UK interest rates rise

Bira urges Chancellor to offer extra support in Spring Budget

The British Independent Retailers Association (Bira) has urged Chancellor Jeremy Hunt to consider independent retailers when setting out his fiscal statement on Wednesday (March 15).

Bira, which works with more than 6,000 independent businesses of all sizes across the UK, believes indies need extra support to survive the cost-of-living crisis and lower footfall on the high street since the pandemic.

Andrew Goodacre, CEO of Bira, commented: “The Spring Statement is an opportunity for the Chancellor to put forward plans to grow the economy. Recent figures suggest that inflation is falling quicker than expected and energy prices have also fallen significantly since last year’s chaos. This should allow the Chancellor to focus on growth and support for the smaller businesses on the high streets throughout the UK.”

Bira has set out the following points that it would like considered:

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• Business rates still need wholesale reform, especially given that for smaller retailers, the rateable values will increase by 10%. Bira welcomes the higher level of retail discount that will come into force in April, but also wants to see the multiplier permanently reduced for small retailers, to further offset the increase in rateable values.

• Wholesale energy prices have fallen, but the cost to businesses remains very high, and the energy support for indies will fall from £6,400 per annum to £400 per annum (based on government figures). With energy companies making record profits, the windfall tax received by the government will be higher than expected, and should allow the government to do more to support businesses. This support could be in the form of grants to improve the energy efficient of the business. Bira would also like to see those businesses which signed contracts when prices were at their highest last year be allowed to renegotiate, so they can benefit from lower wholesale prices The government should also commit to reviewing the energy support scheme again in October when costs normally increase.

• Changes to the tax system with the introduction of an allowance for corporation tax. We use allowances for income tax and Bira believes that we could see a similar system for smaller indie retailers. This change would reduce the tax burden and encourage businesses owners to invest for future growth.

• Bring back VAT free shopping to the UK. As the number of visitors starts to increase again, we should be maximising the opportunity rather than dissuading visitors from spending money in the UK economy.

• Encourage investment by indie retailers in energy saving/carbon reduction measures.

• Reduce the burden on smaller businesses, starting off with the reduction of NI contributions. This could be done by reducing the percentage of NI paid, or increasing the employer’s allowance. The cost of employment is rising all the time and this small change will make a difference to smaller retailers.

• Review the apprenticeship scheme and create a system that allows business owners to attract talent to the retail sector and give younger people a genuine opportunity to start a career in retailing. Retail has a long and proud record of people moving from shop floor into management relatively quickly.

Andrew added: “While the retail sector has changed over the years, there is still a vital role for smaller retail businesses in local communities. Some people might argue that retail shops will disappear as consumer habits change, yet in the past 18 months we have seen internet sales fall, suggesting that the general public really value the businesses in their local community and the contribution to their local economy.

“Change is a given, and smaller businesses need time and encouragement to change. Many have started, only to be set back by other external factors such as the cost-of-living crisis or the cost of energy. These are perfectly good businesses which should not be allowed to fail through no fault of their own. Recent positive economic data should allow the Chancellor to be positive towards indie retailers in the Spring budget.”

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