George Osborne urged to help retailers

George Osborne should 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 to kick-start the consumer economy, one of Britain’s leading business groups urges today.

The British Retail Consortium (BRC) warns the Chancellor that consumer confidence remains “stubbornly weak”, sales growth on the high street is “flat” and costs for businesses are rising “rapidly”.

In a hard-hitting submission sent today to Mr Osborne ahead of next month’s Autumn Statement, the BRC sets out six priorities that it says will help the economy recover.

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 BRC said Mr Osborne's spring Budget included a lot of "perihperal fiddling in areas that were not going to make a difference to growth", such as the maligned 'pasty tax'.

“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.

“Success is far more likely if the Government concentrates on delivering convincingly in half a dozen significant areas rather than trying to fight on a much broader range of fronts,” says Mr Robertson.

The BRC calls on the Government to implement six measures as priorities. It urges Mr Osborne 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, saving retailers £175 million.

- Ditch the expensive Carbon Reduction Commitment (CRC) energy efficiency scheme, replacing it with a tax on annual energy statements.

- 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 £4 billion 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 2.1 per cent, 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: “Our six-point plan spells out retailers’ priorities for action that will maximise the sector’s contribution to economic recovery, through job creation, investment in communities and offering the best possible value to customers in these tough times.

“In particular, the Chancellor should not pile more pain onto struggling households or retailers by adding extra costs. He should scrap January’s planned fuel duty rise and freeze business rates next April.”

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.

Last week it emerged that hedge funds are betting hundreds of millions of pounds that there will be blood on the high street this Christmas. Britain’s listed retailers dominate a list of the big ‘short’ positions in the City.

Shorting is when hedge fund traders bet stock prices will fall by borrowing and then selling shares, hoping to later buy them back at a lower price and pocket the difference.