The government has put “two fingers up to the high street” with today’s Budget announcement, retailers have said.
There were few surprises in chancellor George Osborne’s address this afternoon, although the £2,000 National Insurance allowance for businesses offered an unexpected boost to the coffers, particularly for small companies.
The scrapping of the fuel escalator also presents some lightening of the burden both on businesses that transport a lot of stock and for customers, potentially giving them more disposable income. The increase of the personal tax allowance to £10,000, which has been brought forward to 2014, could also give consumers a cash injection.
The rate of corporation tax was lowered by 1% to 20% overall.
But retailers were largely left out in the cold by today’s series of measures, with any tackling of business rates a notable absence. While other industries such as construction were given specific fillips, the high street was ignored.
Paul Turner Mitchell, owner of Rochdale indie 25Ten Boutique, described it as “a big smack in the face for retail”.
He added: “It shows where the government’s priorities lie with high street and retail. So far they have put around £20m into projects like the Portas Pilot, but in the last two budgets the chancellor has raided the high street for £500m.
“We weren’t expecting much but it’s clear now that the government has no intention of doing anything on business rates until they have met their deficit reduction plan – it’s two fingers up to the high street until then.”
Campaining MP Simon Danczuk agreed.
“Sadly, this is a slap in the face for Mary Portas and it undermines her efforts to revive our high streets,” he said. “No matter how hard she works, unless she’s backed by serious government policy to support retailers then I fear she’ll be fighting a losing battle.”
Mainstream womenswear retailer Hobbs also complained about the government’s failure to address business rates, claiming that the current system of basing it on one month’s retail price index (RPI) figure was “harmful to growth”.
Chairman Iain MacRitchie said: “If the government is seeking to revive British retail and wishes to support successful brands in order to help businesses achieve their full domestic and international potential, they should have seized their opportunity to introduce a system that produces fairer and more affordable rate increases.”
He noted there was “a variety of alternative options”, including consumer price index (CPI) or even switching to a system based on a 12-month average RPI.
“Businesses like Hobbs have adjusted to the new multi-channel, multi-national retail reality,” MacRitchie added. “Retailers have moved with the times and now the government must do the same.”
Indie trade association BIRA welcomed the changes to Corporation Tax and National Insurance, but also raised an alarm over rates.
“The chancellor should think on the fact that every independent that closes shuts the door on ten jobs,” a statement from the association said.
John Webber, head of rating at real estate firm Colliers International, described the failure to address business rates as “a real missed opportunity”.
“Government’s failure to act will mean that weaker businesses will shoulder a much greater burden of business rates for at least two additional years while those stronger businesses will be subsidised. The Mary Portas Towns will be significant losers from the postponement,” he added.
“The aspiration nation does not extend to our blighted town centres – perhaps George Osborne is confused with the aspirations of the shoppers in Bond Street. No doubt they will be raising a glass of beer to him in some of the pubs in the West End but in those pubs that are still trading in regional centres such as Wolverhampton, Stockport and Blackpool they may be drowning their sorrows after this Budget.”