Firms call pricing cuts a ‘slap in the face’

• Small businesses have called government programme to decrease prices a “slap in the face.”
• Federation of Small Business says it is unrealistic to want businesses to “soak up expenditures”.
• Advertising campaign was suggested by David Buttress, the government’s new cost of living tsar.

A new government initiative to push companies to lower their pricing to aid consumers with living expenses has been dubbed a “slap in the face” for small enterprises.

According to the Federation of Small Businesses, it is unrealistic to want struggling businesses to “soak up additional expenditures.”

It is one of many organisations that have criticised the idea of a taxpayer-funded advertising campaign that would see businesses cutting their prices starting in July.

The government will “shortly” introduce an official name and branding.

The advertising campaign was suggested by David Buttress, the government’s new cost of living tsar, but a government source told the BBC that companies won’t receive any funds or subsidies in order to lower costs.

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The majority of small businesses, according to Martin McTague, national head of the FSB, are “far past the threshold of being able to absorb more costs without passing them on, which is sometimes a last choice.”

“It’s a slap in the face for government to spend the extra tax it is raising from businesses on state-run marketing campaigns,” he told the BBC. “They are probably focused on big businesses with corporate offers that can now be rebranded as helping the cost of living crisis, and so boost their sales.”

“Asking this group to absorb further expenses just isn’t realistic, especially when so many are concerned about basic survival and have already reduced all spending, even critical ones,” the author writes.

The government should do “far more to help,” according to Mr. McTague, “rather than just a marketing effort utilising taxpayer monies to put government branding in store windows,” including lowering VAT rates to exempt more small businesses from business taxes.

In response, the administration said that hiring Mr. Buttress on an unpaid basis was “the latest measure taken by the administration to ensure we’re doing everything we can to help folks in this country with the growing cost of living.”

According to a spokesman, “He will work in collaboration with the private sector to find, create, and promote new and existing business-led programmes that empower people by urging firms to do more to advertise discounted prices or product offers.”

Prices are rising at their quickest rate in forty years, with UK inflation reaching 9.1 percent, the highest level since March 1982. Due to record-high fuel prices, it is encouraging consumers to limit their grocery shopping and driving to save money.

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