With the 2011 Budget Fast Approaching UK Business Calls for a 'Business Budget'

The retail industry has been hit hard over the last few years and many companies have struggled to survive. Recent Government policy decisions have hit the retail industry hard, and now the British Retail Consortium (BRC) has urged the Chancellor, George Osborne, to introduce measures to support the struggling British economy in this month's budget.

January's increase in VAT to 20 per cent and a 2.2 per cent rise in the minimum wage last October have already hit the retail sector. And, with rises in fuel duty, national insurance and business rates set to be introduced in the next few weeks, the situation could get worse. And, after inflation further exceed the Government's targets in January, the Bank of England may have to increase interest rates. This will increase the cost of borrowing on business loans and commercial mortgages for many companies.

Other industries have joined the BRC in calling on the Government to support the private sector. The manufacturing organisation, the EEF, has also asked the Chancellor to help the struggling economy by boosting innovation and investment in the private sector.

Rises in taxes (including the bank levy and VAT) and austerity spending cuts have already been introduced by the Government to try and cut Britain's record budget deficit. These have already had a harsh impact on many businesses.

In its budget submission, the BRC has urged the Chancellor not to levy any further costs on the retail industry otherwise they would "undermine its ability to maintain and create jobs". The BRC argues that the retail industry is vital to the economic recovery in the UK and that additional costs would stifle this recovery.

The Chancellor has been requested to be considerate in the budget come April, as their sudden increase of minimum wage in October was seen as unfair as there was not enough notice given. Therefore one of the requests was to offer more notice before such increases in future, as well as the idea of freezing certain levies on smaller businesses in the coming year.

Paraphrasing the Chancellor's own words, Stephen Robertson, director-general of the BRC, said: "Retailers accept 'we are all in this together' but they are already 'in this' more than many. The sector is not asking for handouts but is saying any new impositions will undermine its ability to maintain and create jobs, costing the Exchequer."

The EEF, the UK's major manufacturing lobby group, has joined the BRC in calling for Government help. They are looking for a reform of the taxation system in order to help the manufacturing sector and have asked the Chancellor to produce a clear strategy as to how the UK's economy will recover. Furthermore, the EEF are concerned about the lack of commercial mortgage finance available to small businesses and want the banking system overhauled to deal with this problem.

Since the 'credit crunch', many small businesses have struggled to obtain the loans and commercial mortgage investment they need to expand their operations. The EEF has asked the Chancellor to monitor banks to ensure that they are lending to small and medium sized businesses, without whom the economy will continue to stagnate.

Without the ability to obtain credit, new and small businesses are unable to expand, and expansion includes the employment of new or further staff. It is therefore being called that the Government address the lack of assistance from banks to ensure that businesses are still able to grow if our economy is to recover at all.


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Timothy Frodsham writes for Just Commercial Mortgages.com the UK's No.1 site for the latest commercial mortgage rates and commercial property finance news.