Retail didn’t feature in the government’s industrial strategy but there is plenty that could be done to help the industry remain a strong foundation of the economy, argues BRC chief executive Helen Dickinson
Last week, the government published its long-awaited industrial strategy. The nearest retail got to a mention was the claim that growth in the creative industries will “create opportunities for the hospitality and retail industries”.
We shouldn’t be surprised – or affronted – by the lack of retail front and centre of an industrial strategy, and I have seen many. Retail is not going to ’turbo charge’ the country’s economic growth at the speed of AI tech, life sciences, or parts of advanced manufacturing. But it has something different – something special, something government or society should ignore at its peril.
Retail is the everyday economy that chancellor Rachel Reeves argues is “the services, production, consumption and social goods that sustain all our daily lives”. It is a foundation of our economy. And no government can create economic growth without the right foundations.
Retail has lost 350,000 jobs since 2015, more than are employed by the fishing, car production and steel manufacturing industries combined. Where was the outrage? Surely, to let this trend continue risks unsettling the very foundations of the everyday economy the government should want to protect.
Retail remains the largest private sector employer, with almost 3 million jobs, and another 2.7 million in the supply chain. Importantly, these jobs are across the whole country, from the village shop to the city flagship, to the regional DC. They provide incalculable social value, giving so many a first experience of work and opportunities for all, regardless of qualifications or background.
At the very time government wants to get more people back into work, the availability of such flexible, part-time and entry-level jobs offered by retailers should be embraced, built upon, supported – not undermined – to keep the foundations strong.
The rise and fall of prices in our shops and online does more to change our standard of living than access to ChatGPT ever will
The rise and fall of prices in our shops and online does more to change our standard of living than access to ChatGPT ever will. The cost of living for everyday people is also a foundation of our economy, determining the spending households have for everything else.
But here we are, with the industry still reeling from the last Budget that added £7bn in additional costs because of changes to employer National Insurance, increases to National Living Wage, and the new packaging tax. Food inflation has hit 3.7% in our latest Shop Price Index; retail showed the fewest jobs in the first quarter since records began in 1996. While government acknowledges hard choices must be made, it is vital that they make the right ones now.
So, what is the government to do? Well, there are plenty of policies that could meaningfully impact the industry’s ability to remain that strong underpinning of the economy. All it would take is the right government choices.
It is time to choose the everyday economy.
The Employment Rights Bill, without the amendments we seek, will limit job creation and harm the flexibility of existing jobs. Whether to amend it is a choice. The Growth and Skills Levy funds need to be able to improve skills and productivity, rather than effectively being a tax. How to evolve the levy is a choice. New packaging taxes create new costs for the industry, but currently without any guarantee that the money will be used to improve recycling systems of local authorities. Whether and how local authorities will be held accountable is a choice.
The government has pledged to cut business rates for retail, hospitality and leisure: a cost that will be paid for by a higher rates bill for all properties with a rateable value over £500,000. How this is implemented is a choice.
Whether the reduction is sufficiently meaningful to change investment decisions is a choice. Ensuring no shop ends up paying more is also a choice. Large stores, whether on high streets, retail parks, or elsewhere, drive traffic to smaller stores, cafés and services. The high street is more than the sum of its parts, and if you increase taxes on one part, you harm all of it.
They say being in government is about choices. It’s time for government to make some good ones that will support the foundations of the everyday economy.
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