The UK’s luxury and retail sectors have called on the new prime minister Rishi Sunak to offer more support for businesses amid rising inflation.
Helen Dickinson, the chief executive of the British Retail Consortium (BRC), congratulated Sunak on his new role, adding that he takes on the job in “one of the most challenging economic periods consumers have known”.
“Retailers are playing their part in supporting their customers, shielding them from the worst of rising costs resulting from a weaker pound, tight labour market and war in Ukraine,” she said.
However, those efforts “are threatened by the 800 million pound bombshell of additional business rates that will hit retailers in April - a 10 percent rise that far outstrips sales growth over the last year”.
Dickinson urged Sunak to “freeze business rates and reform the broken transitional relief system” in order to avoid households paying through higher prices.
Sunak became prime minister on Tuesday after Boris Johnson and Penny Mordaunt both withdrew from the leadership race.
He takes over from Liz Truss, who was prime minister for just 44 days after drawing widespread criticism for her government’s mini-budget which rattled financial markets.
Luxury calls for ‘laser-like focus’ to build market confidence
Walpole, the UK’s body for the luxury goods sector, also urged Sunak for additional support for businesses.
Chief executive Helen Brocklebank said: “What Walpole brands need, above all, is for Mr Sunak to deliver a laser-like focus on building market confidence so that crucial investment decisions can be made: it is these decisions that will help drive growth across the UK and which will help protect and create jobs in British luxury businesses the length and breadth of the country. I am confident that he will make this a priority of his premiership.”
Brocklebank also urged Sunak’s government to bring back VAT-free shopping for tourists, which former chancellor Kwasi Kwarteng had announced the return of in his mini-budget in September, but then was overturned by new chancellor Jeremy Hunt earlier this month.
A report on Monday by the UK’s Digital, Culture, Media and Sport Committee (BCMS) described Hunt’s decision as a “spectacular own goal” and noted the scheme “could at the very least have been cost neutral”.
Brocklebank continued: “As a sector, we remain resolute that tax-free shopping is a fundamental growth driver for Britain’s 30 billion pound high-end tourism economy and its revival may seem to you a forlorn hope with Mr Sunak in Number Ten.
“Nevertheless, I don’t think we should despair. I feel confident that we will, in time, win the argument. The current battle may be lost, but the war is far from over.”
Brocklebank urged Sunak to “prioritise helping businesses and their employees with the impact of the cost of living and energy crisis, and to implement the policies that will help calm the financial whirlpool of inflation and interest rates”.