Retail sales up: but then January-March has been an exception

We shouldn't call recovery just yet.

With the British Retail Consortium showing that retail sales increased in March by 3.7 per cent on a total basis and by 1.9 per cent on a like-for-like basis, many are now suggesting that the beleaguered retail sector is seemingly moving into recovery mode. The March numbers follow on from an upbeat February and both have helped to contribute to first quarter sales growth which was the strongest of any three-month period since December 2009.

While such momentum is clearly welcome, in order assess the true strength of the recovery the figures do need to be set in a wider context.

With the earlier timing of Easter this year, it was always inevitable that March would be a good month for sales growth. What is perhaps surprising, however, is that given this sales growth was not higher. Indeed, despite the boost of Easter, both the total and like-for-like growth rates were relatively subdued to those seen in February. So, if anything, the March numbers represent a slight deterioration in growth momentum rather than a strengthening.

The other point to which attention needs to be drawn is that the growth was fairly unevenly distributed. Food retailers, helped in large part by inflation, saw some good gains. However, the clothing sector had a torrid time as the unseasonal weather drove down demand for spring merchandise.

Then there is the unusually buoyant demand for electricals. On this front, while there is inevitably strong demand for products like tablets, some of the growth reported by retailers is likely to have come from the collapse of chains like Comet and Jessops – the sales of which have been reallocated to those left standing. Neither the British Retail Consortium nor the Office for National Statistics adjust for such failures which means, in essence, that their aggregation of growth reported by retailers becomes divorced from a proper reading of actual underlying consumer spending growth. While the impact of this methodological anomaly should not be overstated, it is worth bearing in mind when assessing the growth figures.

None of this takes away, of course, from the strong growth seen in February which will, inevitably, be pointed to as a sign that things are getting better. However, even here context remains important. The February numbers were partly flattered by a weaker January when some spending was postponed due to the winter weather. This was especially true of fashion where not only did depleted footfall on high streets dint sales, but the cold temperatures were out of kilter with the spring stock which was on the shop floor towards the end of the month. Comparatively, most of February was fairly mild which encouraged consumers out onto the high street and into buying spring fashion lines.

So, in many ways, the first three months of this year have been fairly exceptional – in terms of the weather, in the timing of Easter, and in the amount of churn with various failures in the sector. As such, this is perhaps not the best period over which to pronounce that a meaningful and sustained retail recovery has begun. Only when we get into May and June will we have a more rounded picture of retail prospects.

Retail sales increased in March. Photograph: Getty Images

 Managing Director of Conlumino

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The problems with ending encryption to fight terrorism

Forcing tech firms to create a "backdoor" to access messages would be a gift to cyber-hackers.

The UK has endured its worst terrorist atrocity since 7 July 2005 and the threat level has been raised to "critical" for the first time in a decade. Though election campaigning has been suspended, the debate over potential new powers has already begun.

Today's Sun reports that the Conservatives will seek to force technology companies to hand over encrypted messages to the police and security services. The new Technical Capability Notices were proposed by Amber Rudd following the Westminster terrorist attack and a month-long consultation closed last week. A Tory minister told the Sun: "We will do this as soon as we can after the election, as long as we get back in. The level of threat clearly proves there is no more time to waste now. The social media companies have been laughing in our faces for too long."

Put that way, the plan sounds reasonable (orders would be approved by the home secretary and a senior judge). But there are irrefutable problems. Encryption means tech firms such as WhatsApp and Apple can't simply "hand over" suspect messages - they can't access them at all. The technology is designed precisely so that conversations are genuinely private (unless a suspect's device is obtained or hacked into). Were companies to create an encryption "backdoor", as the government proposes, they would also create new opportunities for criminals and cyberhackers (as in the case of the recent NHS attack).

Ian Levy, the technical director of the National Cyber Security, told the New Statesman's Will Dunn earlier this year: "Nobody in this organisation or our parent organisation will ever ask for a 'back door' in a large-scale encryption system, because it's dumb."

But there is a more profound problem: once created, a technology cannot be uninvented. Should large tech firms end encryption, terrorists will merely turn to other, lesser-known platforms. The only means of barring UK citizens from using the service would be a Chinese-style "great firewall", cutting Britain off from the rest of the internet. In 2015, before entering the cabinet, Brexit Secretary David Davis warned of ending encryption: "Such a move would have had devastating consequences for all financial transactions and online commerce, not to mention the security of all personal data. Its consequences for the City do not bear thinking about."

Labour's manifesto pledged to "provide our security agencies with the resources and the powers they need to protect our country and keep us all safe." But added: "We will also ensure that such powers do not weaken our individual rights or civil liberties". The Liberal Democrats have vowed to "oppose Conservative attempts to undermine encryption."

But with a large Conservative majority inevitable, according to polls, ministers will be confident of winning parliamentary support for the plan. Only a rebellion led by Davis-esque liberals is likely to stop them.

George Eaton is political editor of the New Statesman.

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