Re­tail­ers warn on VAT cut ex­clu­sion

The Daily Telegraph - Business - - Front Page - By and

Michael O’Dwyer

Laura Onita CRI­SIS-HIT re­tail­ers, tech­nol­ogy firms and small busi­nesses dev­as­tated by the coro­n­avirus re­ces­sion have com­plained about miss­ing out on vi­tal sup­port from Rishi Su­nak.

Bosses said the Chan­cel­lor’s eco­nomic up­date was a missed op­por­tu­nity and that in­dus­try-spe­cific tax cuts and sub­si­dies for hos­pi­tal­ity and hous­ing firms should have been mir­rored in other in­dus­tries.

The vast ma­jor­ity of re­tail­ers were forced to shut shops and lost mil­lions of pounds in sales dur­ing the lock­down, but have not been in­cluded in a VAT cut of­fered to hos­pi­tal­ity com­pa­nies that is likely to boost de­mand.

A flurry of re­tail­ers have col­lapsed into ad­min­is­tra­tion or been forced into mak­ing ma­jor job cuts since the Covid pan­demic struck, with thou­sands of work­ers al­ready laid off.

He­len Dick­in­son, of the Bri­tish Re­tail Con­sor­tium, said it was dis­ap­point­ing that the Chan­cel­lor had not ex­tended the VAT cut to re­tail­ers and the three mil­lion peo­ple they em­ploy.

She added: “It was a missed op­por­tu­nity and we hope that the Gov­ern­ment

will re­con­sider this ahead of the au­tumn Bud­get.”

Glob­alData re­tail an­a­lyst Thomas Br­ere­ton said re­tail­ers would have wel­comed a sim­i­lar ini­tia­tive to the “eat out to help out” sub­sidy for hos­pi­tal­ity firms, which is of­fer­ing up to £10 off meals in restau­rants next month.

He said non-food re­tail­ers in bricks and mor­tar stores are set to end 2020 £34.8bn worse off than last year.

The aero­space and mo­tor in­dus­tries also warned that a lack of tar­geted sup­port for man­u­fac­tur­ers could cost jobs as car busi­nesses strug­gle to re­cover from lengthy clo­sures and a col­lapse in de­mand.

Mike Hawes, chief ex­ec­u­tive of the Society of Mo­tor Man­u­fac­tur­ers & Traders, said: “It’s bit­terly dis­ap­point­ing the Chan­cel­lor has stopped short of sup­port­ing the restart of one of the UK’s most im­por­tant em­ploy­ers and a driver of growth.”

The UK stands alone among Europe’s ma­jor economies by fail­ing to pro­vide spe­cific help for the in­dus­try, he added.

France and Ger­many have un­veiled multi­bil­lion-euro schemes to help their largest mar­ques. Mean­while, lead­ing fig­ures in tech called for more work to help the coun­try’s army of fast-grow­ing start-ups.

Sabby Gill, the man­ag­ing di­rec­tor of soft­ware firm Sage UK, said the Chan­cel­lor should be do­ing more to help small busi­nesses em­brace trade op­por­tu­ni­ties ahead of Brexit by en­cour­ag­ing en­trepreneur­ship and of­fer­ing grants for com­pa­nies to in­vest in new tech­nol­ogy. The Chan­cel­lor has al­ready in­tro­duced mea­sures to help tech start-ups in­clud­ing the Fu­ture Fund, which has doled out more than £320m in loans to early-stage busi­nesses.

Franz Do­err, chief ex­ec­u­tive of rent­ing start-up Flat­fair, said: “The UK’s tech sec­tor has been boom­ing over the last few years, and to not sup­port it now dur­ing this time would risk eras­ing years of growth and job creation.”

Mean­while, Ger­ard Grech of in­dus­try body Tech Na­tion wel­comed schemes to of­fer bonuses for hir­ing trainees and ap­pren­tices.

Mr Grech also praised a £17m pro­posal to in­vest in sec­tor-based dig­i­tal acad­e­mies, which help job seek­ers find work.

Small busi­nesses that slipped through the net of the Gov­ern­ment’s emer­gency mea­sures to prop up the econ­omy are still be­ing over­looked, ac­cord­ing to trade body the In­sti­tute of Di­rec­tors (IoD).

Jonathan Gel­dart, of the IoD, said that while tax cuts and job creation schemes were wel­come, he had hoped for broader mea­sures – par­tic­u­larly to help firms that have so far been left to fend for them­selves.

Dis­cussing the lat­est sup­port mea­sures, Mr Gel­dart said: “A glar­ing omis­sion through­out this pan­demic has been the ex­clu­sion of small com­pany di­rec­tors, many of whom have not been able to ac­cess in­come sup­port.

“Widen­ing grant schemes could help those who have been left strug­gling with­out as­sis­tance, and help more firms to re­open.”

‘A glar­ing omis­sion through­out this pan­demic has been the ex­clu­sion of small com­pany di­rec­tors’

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