Consumers: Expenditure

Treasury written question – answered am ar 8 Ebrill 2024.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Lord Taylor of Warwick Lord Taylor of Warwick Non-affiliated

To ask His Majesty's Government what assessment they have made of recent trends in consumer spending; and what assessment they have made of the impact of this on (1) the retail sector, and (2) the wider economy.

Photo of Baroness Vere of Norbiton Baroness Vere of Norbiton The Parliamentary Secretary, HM Treasury

Consumer confidence has strengthened considerably over the past year. The March 2024 release of the GfK index indicated that consumer confidence was 15 points stronger than in March 2023.

Government continues to back consumers and retailers. With the economy beginning to turn a corner, we are now able to make responsible tax cuts to boost growth while meeting the fiscal rules to ensure sustainable public finances. These include cutting the employee main rate of National Insurance to 8%, which will make an average worker on £35,400 over £900 a year better off than before.

At Autumn Statement 2023 we extended Retail, Hospitality and Leisure relief for 2024-5, a tax cut worth £2.4 billion, and froze the small business multiplier for a fourth consecutive year. At Spring Budget 2024, the government went further still by supporting small retailers by increasing the VAT registration threshold to £90,000 and extending the Recovery Loan Scheme, now the Growth Guarantee Scheme.

Consumer confidence is intrinsically linked to inflation, household finances and the broader economic outlook. To sustain consumer confidence, consumers need to feel assured that their government is taking the long-term decisions necessary to strengthen the economy and build a brighter future.

Combined, recent policy measures will place more money in people’s pockets, helping boost consumer confidence, and strengthen the UK’s retail sector.

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