'Cancel rise in fuel duty for the sake of the recovery'



George Osborne should ditch the "peripheral fiddling" on the economy and focus on key policies such as a freeze on fuel duty, according to one of Britian's leading business groups.

The Chancellor should use next month's autumn statement to abandon January's rise in fuel duty, give companies a one-year National Insurance holiday when they employ a young person and freeze business rates, in order to kick-start the consumer economy according to the British Retail Consortium.

The group, which includes Boots, Asda and Tesco (Xetra: 852647 - news) as members used it submission to the Autumn statement to warn the Chancellor that consumer confidence remains "stubbornly weak", sales growth on the high street is "flat" and costs for businesses are rising "rapidly".

Stephen Robertson, the director general of the BRC, also accuses the Government of launching too many ineffective initiatives to boost growth. He urges the Chancellor to focus on a small number of "concrete" measures to boost the flailing economy.

"The Chancellor should avoid distractions and diversions and focus on a small number of pro-growth measures that will really make a difference to customers, employees and businesses.

The BRC calls on the Government to:

• Cancel January's 3p-a-litre rise in fuel duty.

• Freeze business rates in April instead of putting them up by the planned 2.6 per cent.

• Ditch the expensive Carbon Reduction Commitment (CRC) energy efficiency scheme.

• Give a National Insurance holiday for the first year of work among 16-24 year olds.

• Keep increases in the minimum wage affordable

• Reinvest the £4bn proceeds from the 4G auction in the roll-out of high speed broadband to aid online retail.

The BRC warns that risks to the retail sector "remain on the downside".

It says that while total retail sales growth over the last two years has averaged just 2.1pc, volumes have stagnated when inflation is taken into account. It warns that the "severe and long-lasting impact" of the recession has meant that one in nine shops in Britain stands empty. This figure rises to four in ten shops in some towns.

Mr Robertson urges the Chancellor not to "pile more pain" into struggling households and retailers by adding extra cost.

He says: "The Chancellor should not pile more pain onto struggling households or retailers by adding extra costs."

Although Britain is technically out of a recession the BRC warns that "very significant" challenges remain. It says that consumer confidence remains close to the record lows of 2008.

"Credit conditions remain tight for many households, causing consumers to become increasingly risk averse," the BRC says.

There have been a number of high profile retail casualties this year. Comet, the electricals retailer, went into administration earlier this month. So far this year 47 retail companies with a total of 3,673 shops have failed.

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