Retail hits out at lack of help in Sunak’s Covid-19 recovery plan

The Chancellor unveiled new spending measures designed to stave off mass unemployment as a result of the pandemic and offered VAT cuts and spending vouchers designed to stimulate spending in the hospitality sector.

But groups have expressed their “disappointment” that such measures were not extended to retail. 

The government announced that it would pay firms a £1,000 bonus for every staff member kept on for three months beyond when the furlough scheme ends in October.

Businesses with staff on the scheme will be expected to contribute 5% beginning in August, going up to 20% in October when the scheme will stop.

Sunak said extending the furlough scheme indefinitely would be “just as irresponsible as it would have been back in June to end the scheme overnight”. However, Labour shadow chancellor Anneliese Dodds said “many of the big decisions” had been “put off until later” by the government.

The chancellor also announced a cut to VAT on food, accommodation and attractions from 20% to 5% and an “eat out to help out” scheme, which will give customers 50% off meals out, with conditions, in August.

A £2bn initiative aimed at creating thousands of job placements for people aged 18-25 and new payments for businesses hiring apprentices were also announced.

Sunak said he would “never accept unemployment as an inevitable outcome” of the pandemic but warned that “hardship lies ahead” as the economy continues to reel from the effects of the three-month lockdown and markedly depressed customer confidence.

The measures have been welcomed by UKHospitality and the Confederation of British Industry, but the lack of retail-specific measures was met by anger and disappointment from some retail representative groups.

BRC chief executive Helen Dickinson said she was “disappointed” the measures extended to hospitality and tourism had not been passed on to retail.

She said: “The chancellor’s proposals of a VAT cut will be important in reviving these sectors and the 1.8 million people who work there. However, it was disappointing that the chancellor did not extend this measure to the retail industry and the 3 million people it employs. It was a missed opportunity and we hope that the government will reconsider this ahead of the autumn Budget.”

National shopworkers’ union Usdaw went a step further and said it was “shocked” at the lack of specific provisions for retail.

General secretary Paddy Lillis said: “We listened carefully to the chancellor’s statement today and we are truly shocked that he made no mention of the huge challenges the retail industry faces. We recognise the value of a VAT cut for the hospitality sectors, which should have been extended to retail.

“The government’s response to mitigate the impact of the coronavirus emergency on the retail industry, in the form of small business grants, business rates relief and VAT deferral, has helped take some pressure off. However, these interim measures will not sustain the industry for long. We needed to hear today that the government will adopt an urgent retail recovery plan.”

The union called for a “recovery plan to be developed with unions and retail employers”, which it said should include: fundamental business rates reform; an “immediate and comprehensive” review of rental values and lease arrangements; reform of the UK tax law to stop offshoring and tax avoidance; greater funding for local authorities; investment in retail workers’ skills; and a guarantee of a real living wage.