The British Retail Consortium (BRC) has called on Government negotiators to put consumers first in the forthcoming Brexit talks by ensuring their sights are firmly set on keeping shop prices low once the UK leaves the European Union.
Pledging a positive and constructive approach to achieving the best possible outcome from the negotiations starting in March, the BRC said in a letter to Secretary of State for International Trade Liam Fox that the Government’s strategy must focus on finding opportunities for lowering import costs as well as avoiding any increase in tariffs.
BRC Chairman Richard Baker spelled out the importance of achieving trading arrangements with the rest of the world that do not put household budgets at risk. “We will be supporting the Government through this complex and difficult process, helping them analyse how increased cost pressures on retailers could mean higher shop prices and identifying any opportunities for new trade deals that could benefit individuals and families” he said, launching the BRC’s Brexit campaign.
He added: “The retail industry is the UK’s biggest importer, and has huge experience of importing from every corner of the world. We will be engaged in a constructive dialogue with government that will bring our experience to bear on the Brexit talks to the benefit of everyone in the UK.”
The BRC went on to says that while UK retailers have been very successful in insulating consumers from the cost of rising business rates and labour, the recent devaluation of the pound in relation to our most important trading currencies is compounding economic headwinds, while years of deflation have left little margin to absorb added cost from import tariffs and administrative burdens.
Moreover, failure to strike a good Brexit deal by 2019 would have a disproportionately severe impact on retailers and their customers, because if the UK fell back on to World Trade Organisation rules the new tariff rates that the UK would apply to imports from the EU would be highest for consumer staples like food and clothing.
The BRC added that falling back on to WTO rules would also increase the cost of sourcing from beyond the EU. And whilst there will also be opportunities to reduce the costs of international trade outside the EU, some of these may take time to materialise given that free trade agreements typically take five or six years to negotiate.
But other opportunities to liberalise trade could be realised more quickly, the BRC said. For example, the UK would be free to adopt its own scheme of trade preferences (GSP) for developing countries as soon as it leaves the EU.
Meanwhile, the BRC’s campaign is also calling on the Government to introduce only such domestic legislation and regulations on the retail industry that will promote growth during what will be a challenging time for retailers and the three million people they employ.
The BRC said that while retailers are happy to play their part in working for a constructive outcome to the Brexit talks, they will also be dealing with the impacts of a challenging economic outlook, intensifying competition and rapid structural change – making it considerably more difficult to protect consumers from the impacts of a greater regulatory burden.