WITH retailers facing mounting costs and indicators increasingly showing a worsening economic outlook for 2008, the British Retail Consortium (BRC) is calling on the chancellor to use the budget to ease the pressure and ensure a soft landing for the economy.

Consumer spending has been a driving force for the economy over the last decade. But retailers, large and small, are now being squeezed by a range of rising costs. The BRC says, while some, such as fuel and world commodity prices, are largely outside government control, the chancellor does have the power to remove a number of key cost threats on Budget day.

The BRC is asking Alistair Darling to take action in two key areas: 1) Reward retailers' environmental achievements Retailers take their environmental responsibilities seriously and encourage their customers and suppliers to do the same. Tougher trading conditions have led to tightening margins, so government support for retailers' environmental record is even more pressing.

The BRC is calling for:

  • The retailers who will be included in the government's new plans to reduce business emissions, to be given the same incentives to invest in renewables as energy companies (Retailers do not get the same credit for switching to renewable energy that electricity companies do)
  • Reduced VAT on energy efficient products, such as low energy light bulbs and no EU import tariffs on them, to make them more affordable for customers and support retailers' efforts at promoting these goods
  • Better tax breaks and/or preferential rates of fuel duty for those investing in more efficient vehicle fleets 2) New demands for money from local authorities Retailers already pay more than any other sector in business rates and they are increasingly being asked to fund projects like Crossrail. This hits retailers harder than many other businesses, as rates bills reflect retailers' heavy use of buildings compared with other sectors. The government is planning to give local authorities the power to add supplements to business rates. The BRC believes this will be abused as simply another stealth tax for local authorities to raise money from businesses.

BRC Director General Stephen Robertson said: "Retailers already pay £4.5 billion a year in business rates. Supplementary business rates could add £130 million to that. The Government must guarantee tight controls to stop local authorities abusing them as another indiscriminate fund raiser."