UK retail warns of inflation, job losses from budget, seeks Reeves meeting
Over 80 retail bosses sign letter to finance minister
Say retail faces 7 bln stg in extra annual costs from 2025
Wants to work with government to find solution
Adds latest number of signatories paragraph 2, comment from spokesperson for Prime Minister Keir Starmer 7 and 8
By James Davey
LONDON, Nov 19 (Reuters) -Britain's biggest retailers have written to finance minister Rachel Reeves to warn her that last month's budget will make both higher prices and job losses a certainty and dent investment.
The letter, coordinated by the British Retail Consortium trade body and signed by over 80retail bosses, including those at Tesco TSCO.L, Marks & Spencer MKS.L, Sainsbury's SBRY.L, Next NXT.L, Asda, Kingfisher KGF.L, Amazon UK, Greggs GRG.L and Boots WBA.O, called for a meeting with Reeves to discuss their concerns and work on a solution.
The new Labour government's Oct. 30 budget statement raised employers' National Insurance, or social security, contributions by 1.2 percentage points to 15% from April next year, and also lowered the threshold for when firms start paying to 5,000 pounds ($6,322) from 9,100 pounds per year. It also raised the minimum wage for most adults by 6.7% from April.
The letter said the UK retail industry, which has three million direct jobs and 2.7 million more in its supply chain, was facing a rise of 7 billion pounds ($8.8 billion) in annual costs from 2025 when higher business rates and the impact of new packaging levies are also taken into account.
"It will not be possible to absorb such significant cost increases over such a short time scale. The effect will be to increase inflation, slow pay growth, cause shop closures, and reduce jobs, especially at the entry level," it said.
The retailers want the government to phase the introduction of the new lower earnings threshold for National Insurance, delay the introduction of packaging levies, and revisit and bring forward proposed changes to business rates.
A spokesperson for Prime Minister Keir Starmer told reporters the budget measures were needed to fill a 22 billion pound "black hole" the Labour government inherited from the previous Conservative administration.
"The government had to make the difficult choices to... restore desperately needed economic stability, and it is economic stability which will allow businesses to thrive and grow in the long-term," the spokesperson said.
($1 = 0.7924 pounds)
($1 = 0.7909 pounds)
Reporting by James Davey; additional reporting by Elizabeth Piper; Editing by Paul Simao and Gareth Jones
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