Spending cuts needed to avoid repeat recession

01/03/2010

The Chancellor should use the next Budget to focus on spending cuts instead of increasing the tax burden on businesses, it has been claimed.

The British Retail Consortium (BRC) said the measures were necessary to avoid a ‘double dip’ recession.

The organisation has put together a retailers’ wish-list of other Budget measures which it believes will help businesses in the sector recover from the economic crisis.

A reduction in employment costs was high up on the list including scrapping the planned National Insurance rise and capping this year’s minimum wage increase to 1%.

The lobby group also requested an extension to the Empty Property Rate Relief and called for any increases in business rates to be ‘affordable’.

“To nurture our fledgling recovery, the main tool for dealing with the deficit has to be cutting non-vital public sector spending,” said Stephen Robertson, BRC director general.

“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.”

Robertson argued that retailers are vital to jobs as they are the UK’s biggest private sector employer, providing work for nearly three million.

He added: “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.”