BRC warns the Government not to cut deficit too quickly; THE UK'S PRIVATE SECTOR WILL DRIVE RECOVERY - RETAILERS.
RETAILERS are urging Chancellor George Osborne to protect the UK's economic recovery by halving the country's gaping budget deficit over four years, rather than the three years planned.
Ahead of this month's emergency Budget, the British Retail Consortium (BRC) warned against increasing VAT and supported plans to crack down on tax evasion.
The BRC backed the Government's intention to favour slashing public spending over tax hikes.
But it also warned against doing this too quickly, and recommended halving the pounds 156bn deficit over four years, rather than the Government's suggested three years.
Stephen Robertson, BRC director-general, said: "The sheer size of the deficit means action must be taken, but the response mustn't harm the fragile recovery.
"It's the right approach to focus on public spending cuts, rather than tax increases. But the Government mustn't risk cutting too quickly.
"The best way to protect long-term growth is to halve the deficit over four years, rather than three."
Mr Robertson warned that increasing VAT would hit the most vulnerable members of society.
Mr Robertson said: "Zero-rated items, such as food, books and children's clothing, shouldn't have VAT applied to them as it would hit the most vulnerable members of society the hardest.
"The latest figures show tax avoidance costs the economy around pounds 40bn in lost revenue every year.
"We welcome the Government's proposal to take a tougher stance on tax evasion and believe more resources should be devoted to improve the payment level of money owed. "The Government must make long-term decisions that result in a consistent and predictable business environment - this will encourage investment."
In addition to addressing the public finances, the BRC is calling for future increases in the national minimum wage to be no higher than average earnings in the wider economy. Mr Robertson added: "It's the private sector that will drive the UK on the path to sustained recovery, with retail playing a crucial role.
"Retailing is the UK's largest private sector employer with nearly three million people working in the industry.
"Placing damaging new costs on to retailers , big and small, will hamper their ability to maximise their contribution to the recovery. The Chancellor must help retailers continue to maintain and create jobs."
In its emergency Budget submission, the BRC is also calling on the Government to consider a scheme to subsidise early investment in new innovative low-carbon goods and services.
Mr Osborne said he will deliver his first emergency Budget on June 22, exactly six weeks after the new coalition Government took office.
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Jun 7, 2010|
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