‘Political choice’: Retailers urge government to act on rising costs
Retailers have urged the government to cut tax and red tape to counter soaring energy costs caused by the Iran war.
The British Retail Consortium (BRC), an industry trade body, has accused Labour of making a “political choice” not to cut energy taxes and delay costly regulation to avoid the worst shop inflation.
The effective blockade of the Strait of Hormuz during the Middle East conflict has sent the costs of energy, fertiliser and shipping soaring, and leading supermarkets have warned that food prices will go up as a result.
Four in five Brits are worried that the conflict will push up food prices, while 73 per cent are bracing for other consumer costs to rise, according to new polling by Opinium for the BRC.
Reeves urged to slash tax
The trade body, which represents over 200 major retailers, said rising energy costs come on top of stifling tax and regulation which has been piled onto high street business in recent years.
The rising cost of employment – caused by hikes to national insurance contributions and the minimum wage – has hit retailers with £6.5bn in extra bills in the past two years, the BRC claims.
The trade body says the Extended Producer Responsibility regime – a sustainability tax on packaging – has cost retailers £1.6bn since it was introduced last year.
Ministers are reportedly reviewing whether they could scrap or water down the packaging levy to ease the costs facing retailers, but the BRC has called on the government to go further.
Supermarket bosses and the BRC met with Rachel Reeves last month, and scrapping the EPR tax was one of three demands they put to the Chancellor.
‘The window to act is closing’
These leading retailers also called on Reeves to scrap “non-commodity” costs on energy bills and to delay the implementation of a new healthy food regime which retailers say will force them to scrap entire product lines.
Helen Dickinson, the chief executive of the BRC, told Morning Wire last month that it is a “source of frustration” in the industry that Reeves is yet to respond to these demands.
Dickinson said on Wednesday: “Retailers are working hard to hold prices down, but they cannot do it alone. Every cost [the] government chooses not to address is a cost that will find its way into someone’s shopping basket.
“That is a political choice, and it is one [that] ministers still have time to change – but the window to act is closing.”
Dickinson called on Labour to match the German government’s response to the Iran war, after it cut electricity costs for businesses by slashing green levies from their bills.
She said: “The UK should be moving in the same direction, not treating global instability as cover for inaction on costs of its own making.”