With the cost of staple Christmas foods due to go up by 6% come December, we speak to an expert from the National Retail Consortium to see how people will be affected.
00:00The Chancellor announced some quite major tax rises in her last budget in last October now, which came into effect in April.
00:08Those were changes to national insurance contributions, changes to the national living wage, and there's also a new packaging tax that comes into force in October.
00:17So that all totals £7 billion of additional costs this year.
00:22And you've forecast the food inflation up to maybe 6% by the end of the year.
00:27It's not only higher prices that we're seeing, and as you say, 6% food inflation by the end of the year is looking very likely now.
00:34We've also seen 100,000 jobs in retail be lost over the past year.
00:39And we've also seen store closures across the country.
00:43And we'd really like to see, you know, vibrant high streets return.
00:46But unfortunately, it's a very difficult policy environment at the moment for retailers.
00:50What specific changes is the BRC hoping to see in the autumn budget?
00:54One of the big problems about the national insurance changes and why it's caused a massive headache for retailers is because the threshold at which you pay national insurance on your employees has been cut in half, essentially.
01:05Now, retail employs a lot of part-time staff.
01:08So suddenly, you've now got loads of staff who you might not have been even paying national insurance on before.
01:12You're now paying for each of those employees.
01:14And ultimately, businesses have to try and survive.
01:17And if they have to raise prices or cut jobs, then they'll have to do that.
01:21So we really want to avoid a situation where, you know, these job losses continue to spiral and the prices continue to rise.
01:28So we really would urge the Chancellor to take some decisive action this autumn.
01:32How do you expect this is going to affect families' ability to actually afford something like a traditional Christmas dinner this year?
01:38You're right. It's going to mean that the Christmas shop is more expensive than was originally anticipated.
01:45And I think the Chancellor's made a big deal about, you know, wanting to help working people and putting money back in the pockets of people.
01:53But ultimately, I think what the government now has to realise is that taxing the businesses that are putting food on the table is just going to lead to higher prices.
02:02And that is going to affect, you know, working families across the country.
02:06With this ongoing price pressure, do you foresee shoppers maybe cutting back significantly in the festive season?
02:12I think it will be a case of consumers looking to shop around, trying to find the best deal.
02:17I'm sure retailers will be doing their best to try and offer that.
02:21However, it's not going to be at the price that we originally expected.
02:25And I think consumers should be expecting to pay a bit more for their Christmas dinner this year, unfortunately.
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