The government has achieved the right balance between public spending cuts and tax increases in today’s Comprehensive Spending Review (CSR) but the cuts must be administered in the right way, according to the British Retail Consortium (BRC).
Stephen Robertson, BRC Director General, said this afternoon’s speech by Chancellor George Osborne contained “serious plans to tackle the Budget deficit and will remove some of the uncertainty which was driving down consumer confidence”.
“Beginning to deal with the deficit now is right - delays would just store up more pain for later, risking increased borrowing costs, higher taxes and more job losses,” he added.
Osborne’s speech revealed that around 490,000 public sector jobs are likely to be lost over the next four years as a result of the cuts.
He also announced that the pension age for both men and women will rise to 66 in 2020 – six years earlier than planned – and the amount of government money given to local councils will drop by 7.1 per cent from April.
There will be average cuts of 19 per cent to departmental budgets, with an extra £7 billion expected to be saved thanks to changes made to welfare policy.
Robertson said the BRC’s own research shows that uncertainty over where and how the cuts will be applied has had a negative impact on consumer confidence and resulted in sluggish growth in non-food retailing.
The government’s indication that quick decisions will be made is sure to be welcomed by the group and consumers alike.
“Individual households and communities will continue to be cautious until the impact on their future prospects is clear,” Robertson remarked.
“Retailers need the government to communicate exactly how the cuts will be delivered as soon as possible so that they can make investment plans.”