Following a business campaign led by the British Retail Consortium (BRC), the Chancellor has announced in his Budget that the move from RPI to CPI indexation will be brought forward by two years to 2018.
Helen Dickinson OBE, Chief Executive of the BRC, said:
“This is a hugely welcome and positive move. From being caught in a web of competing pressures from all parts of the economy, limiting the scope for action, it’s clear that the Chancellor has listened to the retail industry and the growing chorus from across business and commercial life who have spoken up in favour of action to mitigate rising rates bills. Crucially, this relief will unleash investment that retailers want to direct towards the needs of their customers. This will be particularly critical at a time when shoppers’ disposable income is being squeezed further and the growth projections for the economy have been downgraded.
“Introducing three yearly revaluations is also a positive move to improve fairness of the system. These are encouraging first steps, so now is the time to commit once and for all to putting the rates system on a more affordable and sustainable footing, to support local communities, shops and jobs. We are keen to work with Government to deliver on that.”
Both RPI (Retail Price Index) and CPI (Consumer Price Index) measure inflation. Both of them do it by taking a basket of goods – food, clothes, petrol – looking at what they cost last year, looking at what they cost now, and finding the proportional difference.
On the uplift in the National Living Wage Dickinson said:
“We welcome the Government’s approach to the National Living Wage for 2018. In a challenging environment, the retail industry has worked hard to implement the National Living Wage, with many paying beyond the legal requirement, as well as extending the rate to all staff irrespective of age.
“Wage growth in retail continues to outpace the economy-wide average. Maintaining productivity gains remains crucial to sustaining this wage growth as employers contend with recent and upcoming changes to statutory employment costs. Therefore, it’s important that future increases continue to be moderate to reflect this and are subject to a fully independent Low Pay Commission.
“We are also encouraged by the Chancellor’s commitment to keep under review the flexibility on how Apprenticeship Levy funds can be spent. Without such flexibility the retail industry will not be able to play their part in supporting the government to meet their three million target.”