Cover Story: Politics

Helping hand

Retail trade bodies have this week been outlining the support the sector needs from the new prime minister.

Liz Truss has this week been voted in as the new Conservative Party leader and Prime Minister. A longtime favourite to win the election, the former Foreign Secretary beat ex-Chancellor Rishi Sunak, garnering the support of 81,326 Conservative members, compared to 60,399 for him.

Truss is yet to announce a full plan to tackle the cost-of-living crisis but has pledged cuts to National Insurance contributions and to introduce green energy levies to help with rising prices.

Media reports suggest the government is planning to pay energy firms to subsidise bills so that customers will not be expected to repay the support. The reports suggest energy bosses believe that a ‘government-backed superfund’ from which they could borrow to subsidise bills “is the only game in town”. Further details are expected to be revealed on Thursday (8 September), the reports suggest.

Meanwhile, the appointment of Truss has received a mixed reaction from across the retail industry.

USDAW

Retail trade union Usdaw called on Truss to put aside the promises of tax cuts for higher earners and threats of divisive trade union restrictions that featured prominently in her leadership election campaign. Paddy Lillis, Usdaw general secretary, said: “What we need are urgent plans to eliminate low-pay and insecure work, along with tackling the cost-of-living crisis and action on energy prices. The new PM would do well to adopt Keir Starmer’s plan for an energy price cap freeze that will help protect against future price shocks, along with Labour’s New Deal for Workers.

“With an estimated 12 million households facing fuel poverty, the British public will be disgusted with a new Prime Minister that prioritises unfunded tax cuts and attacking trade unions over tackling the cost-of-living crisis that the Tories themselves have created. That would be a disaster for the country.”

BRC

Welcoming the announcement of Truss, Helen Dickinson, chief executive of the British Retail Consortium, said: “She will need to demonstrate strong leadership as the cost-of-living crisis deepens. Retailers continue to play their part, keeping prices as low as possible and helping households by offering discounts to vulnerable groups, expanding value ranges, raising staff pay, and offering reduced-cost or free children’s meals. The retail industry is ready to work with the new government to shore up consumer confidence and help deliver economic growth.

“Businesses need clarity on the government’s intentions as soon as possible so they can understand the inflationary impact of any policy decisions. One immediate way the government can help retailers support their customers is to freeze the business rates multiplier for all retail businesses for the next financial year, protecting the industry from rates increases linked to inflation, and giving greater scope to hold down prices, protect jobs, and support the economy.”

BIRA

In addition, the British Independent Retailers Association’s chief executive Andrew Goodacre urged Truss to look at support for the high street and deliver.

He said: “In the short terms we need to see financial support given to the smaller retailers who are facing 50% increases in energy costs. The new Prime Minister needs to bring forward a Covid-19-type response by introducing a 100% rates relief for the rest of this tax year. At the same time, we need to improve consumer confidence for the all-important final quarter of the year. To do this the government needs to give certainly to the energy bills being paid with no more increases.

“This will allow households (and businesses) to budget and plan ahead. Find another way of stimulating demand is to reduce VAT, and this should also be considered.

“In the medium term, the government needs to introduce a grant or loan system that encourages smaller businesses to invest in energy-saving technology, therefore reducing the demand for energy. This could also be done in the form of tax breaks and wholesale reform of the business rates system.”

Goodacre added: “Independent retailers are integral to high streets. High streets are integral to communities and so they need support and protection form this toxic economic situation. For many smaller retailers, Covid-19 has drained them of cash, and we must not let perfectly viable businesses disappear from the communities they serve.”