As the UK waits for Prime Minister Rishi Sunak to name the date for the General Election, Andrew Vaux outlines the KBB retail industry’s hopes and fears for a new incoming government
There’s no doubt that retailers across the UK continue to face several challenges including low growth, a cost-of-living crisis, recruitment difficulties and the continued fall-out from pandemic-induced changes.
But on top of this, there’s another issue which is causing added pressure – the next General Election. This means uncertainty over policies moving forward, while businesses face anxiety about rising costs and energy bills.
So, what are the hopes and fears over this? A recent survey by leading insurance provider Simply Business asked small business owners what they think a new incoming government should do. Two thirds (66%) said they would like to see support with tax incentives and breaks, while a third (34%) said they wanted increased funding to support energy payments.
The ongoing uncertainty has sparked comments from many leading industry experts. Adam Kerr, managing director of commercial law firm Primas, says: “Outside of the particulars of the various policies included in campaign manifestos, the issue for business is the dreaded uncertainty that comes with a general election.
“The main consequence of this is that many businesses press the pause button on major decisions until the ground beneath their feet settles. They don’t move to new premises, make capital investments, or recruit that expensive new hire.”
Kerr adds: “In advance of the upcoming election, I think we’re going to see an interesting push-and-pull battle for commercial activity play out. The pull is the commercial inertia I’ve mentioned above.
“This will be compounded by the fact that the cost of borrowing is comparatively much higher than it has been for a long time. That environment doesn’t encourage investment in the way that it has done in recent years.
“The factor that may push businesses against their natural inclination to wait it out is the prevailing view that we’re going to see a change in government at the next election; a change from Conservative to Labour.”
And Marco Forgione, director general of the Institute of Export & International Trade (IOE&IT), comments: “Whoever enters 10 Downing Street later this year, we’ll be looking to ensure their government is committed to free trade and has a strategy in place that enables investment in UK business.
“This strategy also needs to address some of the systemic problems we face, including declining productivity and the need to bolster supply chain resilience.” So, what are the views of high-street KBB retailers?
The word on the street
Richard Reynolds, chairman of CP Hart which has 15 luxury bathroom showrooms across the UK, says: “When I think about the forthcoming general election, it’s mainly fear. Everyone is rightly disenchanted with the Tory government, and pollsters seem confident that they’ll be replaced by Labour.
“It’s hard to imagine a party less fit for government, a group of career politicians without any real-world experience pretending that they have the loony, leftist fringe under control – and the fear is that they’ll do what every Labour government always does: talk big, spend bigger until the electorate sees through it all and loses patience with the omni shambles that they’ll create. The best thing a new government could give to the KBB sector is confidence and stability in the UK property market.”
Justine Bullock, director of The Tap End Bathrooms, states: “Small, medium, and independent businesses (including but not limited to the KBB sector) need the same thing, a long period of stability. The government and national press perpetually report negative news about the high streets and the economy. Discussion and news on this topic needs to be more balanced as it becomes a self-fulfilling prophecy.
“Speaking on behalf of just our small high street bathroom design studio we’d love to see more in the way of grants available to allow us to train apprentices or under-qualified people, so we could provide more jobs to the people who need them in our community but who don’t have the right experience or qualifications. Also, more support and action in terms of business rates, high street regeneration and corporation tax just to name a few.”
Ciaran Leyne, director of Trilogy Designs Limited, comments: “With the challenges of Covid, the cost-of-living crisis, the war in Ukraine, inflation, and recent issues in the Red Sea, it seems as though external factors have significantly impacted our business for years, depriving us of the ability to shape our own future.
“First and foremost, I’d love an incoming government to address the skills shortage within our industry. We need good tradespeople, and I fear for the industry in 20 years’ time. Additionally, a significant investment in housebuilding would also be welcomed, benefiting the country as a whole and particularly boosting the KBB sector.
“However, I believe the government’s main priority should be fostering economic growth, and I’m of the opinion that tax cuts are the quickest way to achieve this.”
Meanwhile, Frazer Goodwillie, director of Billingham Kitchens, says: “In a depressed market, we need a government to inspire confidence and drive growth.
“Speaking to various retailers and national suppliers, the mid-market is almost completely missing and this must be a combination of increased costs biting into the budget, lack of confidence and high borrowing costs. Without these customers shopping for kitchens, I’d foresee more companies going out of business and a gloomy economic outlook.”
The retailers’ views are echoed by leading industry body the British Retail Consortium (BRC). Chief executive Helen Dickinson states: “The UK has one of the most developed retail offerings in the world, employing three million people.
“As political parties gear up for the next election, we need a different way of working with government so that we can use the industry’s size, scale, and reach to deliver more. That means removing the blockages which hold the industry back, preventing it reaching its full potential.
“By delivering a more business-friendly approach to retail, the industry can deliver on its own vision – a net zero, digitally transformed industry which provides higher skilled, better paid jobs, and more investment in local communities.”
