The British Retail Consortium (BRC) has called for the Government to focus on spending cuts, not tax hikes, ahead of this month's Emergency Budget.
In its Budget submission, published today, the BRC says it supports the Government's aim of seeking an 80:20 split in public cuts relative to tax increases, but warns against making cuts too quickly.

BRC director general Stephen Robertson 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."

The retail organisation spoke out against VAT increases, saying this would have "negative impacts on retailing and the wider economy" and "hit the most vulnerable members of society the hardest". It also welcomed the Government's proposal to take a tougher stance on tax evasion.

The BRC is also calling for future increases in the National Minimum Wage to be "no higher than average earnings in the wider economy", and wants all businesses affected by Business Rate Supplements to be given a mandatory vote before the levy can be applied.

Mr Robertson added: "Retailing is the UK's largest private sector employer with nearly 3m people working in the industry. Placing damaging new costs onto 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."

Meanwhile, the British Chambers of Commerce (BCC) has called for interest rates to be kept low, ahead of the Monetary Policy Committee (MPC) meeting on Thursday.

BCC chief economist David Kern said: "In view of the dangers still facing the economy, the MPC must persevere with expansionary policies. Any thought of raising interest rates will merely heighten the risk of a major setback, and must be rejected until the recovery is more secure."

He added: "The MPC will only be able to maintain low interest rates for a prolonged period if the Chancellor presents a credible medium-term plan for tackling the UK's deficit in this month's Budget. Putting the country's public finances on a sound footing will reduce threats to our credit rating and to inflationary expectations, and it will help create the stable background businesses need to drive recovery."

The Government's Emergency Budget is due to be announced on June 22.