Budget: Key points for retail
Rishi Sunak stood up to deliver his first joint Budget and spending review at the House of Commons today.
He says jobs, growth and wages are all going up, and there will be a pay rise for more than two million people. He also said there are “challenging months ahead” but his Budget sets out a plan for a “new economy, post-Covid. An economy fit for a new age of optimism”.
Responding to the Chancellor’s Budget announcement today, Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “Today, the Chancellor spoke of a new age of optimism, but retailers will struggle to share his confidence after a Budget that does not do enough to reduce the burden of costs bearing down on our shops, our high streets and our communities. This budget is a missed opportunity for retail and the three million people who work in the industry, and it prevents retail from maximising its contribution to the government’s levelling up agenda.”
On Business Rates:
The government today introduces a new business rates improvement relief which will see every single business pay no extra business rates for 12 months.
“Millions of businesses will see their tax bills rise without intervention,” Sunak warned.
The budget has also announced today for one year a new 50 per cent business rates discount for the retail, leisure and hospitality sector. This marks a tax cut of almost £1.7 billion.
“This marks the biggest single year tax cuts to business rates in over 30 years,” Sunak said.
Responding, Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “It’s a mixed bag of announcements from the Chancellor which falls far short of the truly fundamental reform that is needed and was promised in the government’s 2019 manifesto.
“With firms still stuck on property valuations from 2015, the move to a three-year revaluation cycle, supported by a properly funded VOA, is welcome and is a clear acknowledgement that rates have fallen well out of kilter with the wider property market. The freeze in the multiplier is positive, though the evidence is clear that the current rate – over 50% in England – is already far too high.
“We also welcome the property investment relief and green investment relief, both of which the BRC has called for, which will provide some support for much needed investment in green technology and property improvements.
“While the Government’s 50% bridging relief for 2022/23 may prove to be beneficial for the smallest businesses, it will do little to support the businesses that pay two thirds of retail business rates and employ 1.5 million people. With no reduction in the burden, this will lead to the unnecessary loss of shops and jobs and fails to incentivise investment in all parts of the country. This is bad news for every member of the public who wants a vibrant high street in their local community, with retail at its heart.”
National Living Wage:
Sunak confirms the rise of national living wage by 6.6 per cent from April – increasing by 59p per hour for those aged 23 and over. The National Living Wage will rise next April from £8.91 to £9.50 per hour.
Responding, Helen Dickinson said: “The retail industry strongly supports the intention to raise wages in the industry and has been working hard in recent years to secure the productivity improvements needed to ensure such increases are sustainable. Currently, retailers are grappling with an assortment of government-imposed costs – higher National Insurance Contributions, higher Corporation Tax, sky high business rates – at a time when sales are slowing and supply chains are experiencing significant disruption. Unfortunately, the combined impact of additional costs will add to the pressure on prices – with three in five retailers saying that prices will rise before Christmas.”
On supply chains:
To address the HGV driver shortage, the government is introducing temporary visas, tackling testing backlogs, changing cabotage requirements, and today announced new funding to improve lorry park facilities.
Sunak said: “We’ve already suspended the HGV levy until August, and I can do more today, extending it for a further year until 2023, and freezing Vehicle Excise Duty for heavy goods vehicles.”
According to Sunak, these are “shared global problems, not unique to the UK”.
Responding, Helen Dickinson said: “Positive news for our nation’s HGV drivers. The BRC strongly supports the investment in lorry driver facilities around the UK, and we hope this makes lorry driving a more attractive career to those who may be considering it, as well as helping to retain those hardworking drivers already in post.”
