Retailers warn chancellor of £7bn budget burden

Retailers have written to the chancellor warning of the dire impact of the £7bn in extra costs they face next year as a result of the budget.

Some of the UK’s biggest outlets, including Amazon UK, Tesco, Next and Asda, say the “cumulative burden” of the measures announced by Rachel Reeves in October would be damaging for employment, inflation and the economy in general.

In their message, the 79 signatories of the British Retail Consortium’s letter claim job losses, price rises and shop closures will be inevitable as they grapple with higher employer National Insurance contributions (NICs) and national living wage increases.

The letter states: “We appreciate government’s focus on improving the fiscal situation and investing in public services; we also recognise the role businesses have in supporting this. But, the sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty.”

Other names on the list of signatories included the bosses of Marks and Spencer, Boots, Currys, Lidl, JD Sports, Greggs, Primark, Morrisons and Sainsbury’s, as well as charity shops and the trade group Associated Independent Stores.

The group says “the impact of the budget NIC threshold change is particularly acute given retail employs large numbers of people in entry-level and part-time roles”.

According to the BRC, it would “welcome the opportunity” for a meeting with Reeves, in which it would recommend certain changes to measures announced in the budget, such as the phasing in of the NI lower earnings threshold.

The letter added: “By adjusting the timings of some of these changes, the government would give businesses time to adjust and greatly mitigate their harmful effects on high streets and consumers.”

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