Following yesterday’s Budget, delivered for the first time by Labour’s Chancellor of the Exchequer, John Healey, numerous trade bodies, retail firms, campaign groups and others have now issued their responses.
Campaign win
The Federation of Independent Retailers (the Fed) welcomed what it called “a campaign win” following the announcement the Government would increase the eligibility for Small Business Rates Relief (SBRR) - although it added that the cost of business for small shops remains too high.
In the Budget statement, it was confirmed the minimum SBRR threshold was being increased by 50% to £18,000 rateable value from £12,000. This follows concerns highlighted after April’s revaluation that small businesses - like Fed members - were being brought into the scope of business rates, pushing up costs at a challenging time.
It was also revealed yesterday that the tapered-relief threshold for SBRR will also rise by the same amount from £15,000 to £21,000.
The Government has said it estimates a further 70,000 high street businesses will pay no business rates and that it believes half of all retail, hospitality and leisure properties will pay no business rates.
Wage changes
The announcement was accompanied by confirmation of the increase in the National Living Wage. Commenting, the Fed’s national president, Hemanshu Patel, said: “We’re looking closely at changes that look likely to be made to SBRR that could benefit some of our members.
“However, the message from the Fed remains that the cost of business remains too high. Our shops are crucial employers and a familiar face in the communities they serve. It’s important that the Government continues to engage with the Fed to ensure small retail businesses can survive.”
“For many independent retailers, these aren’t simply figures on a spreadsheet.”
Speaking on the new National Living Wage update, Patel added: “For many independent retailers, these aren’t simply figures on a spreadsheet. They affect decisions about whether they can afford to take on new staff, offer hours to younger workers or maintain their existing workforce.
“We’re concerned that without proper consideration of the cumulative costs facing employers, the Government risks making it harder for young people to find work and for independent retailers to continue providing jobs in their local communities.”
Serious blow
Also responding to the Chancellor’s business rates announcements, Vivienne King, chair of the Shopkeepers’ Campaign group, expressed concerns about the impact of inflation: “The Chancellor seems to think that freezing business rates in real terms is a freeze. It’s not – it’s a cash terms rise for retailers.
“Retail is the beating heart of any high street and, by letting business rates bills rise, the Chancellor has dealt high streets a serious blow. Retailers who were already being squeezed by the inflationary cost of goods are now being squeezed by inflationary tax rises. This will perpetuate price rises in the shops for all.”
King also said she wanted to see the rates multiplier scrapped completely, rather than it being continually tinkered with: “We wanted to see the higher multiplier scrapped. Large stores create the footfall to support entire retail ecosystems. Imposing a higher rate on retailer distribution warehouses will raise the cost of goods in the shops, which will be felt in the pockets of every household.”
“The immediate savings may not be as generous as the Chancellor suggests…”
King added that the new high rate relief figure of £18k wasn’t as generous as it seemed: “The raising of the threshold will be good news for small business, but the immediate savings may not be as generous as the Chancellor suggests, as many of those who will benefit were already seeing their liability increases capped at £800 per annum under the Supporting Small Business Relief scheme.”
Post Office
The Post Office has also been quick to comment on yesterday’s Budget, and said it believes it sent a clear signal that the Government continues to back its network and the vital role postmasters play in communities across the UK.
Post Office CEO, Neil Brocklehurst, said: “It’s clear the Government continues to back the Post Office network - both through the Budget and its new strategy to champion UK high streets.
“As part of his Budget, the Chancellor announced that the Post Office is upgrading 600 branches and is aiming to roll out up to 1,000 multi-carrier self-service Drop Boxes by the end of the financial year. Postmasters will now have the opportunity to bring the new technology into branches, reducing their costs and giving customers greater choice and flexibility.
“Together with the expansion of Post Office Plus, highlighted in the high street strategy, this investment will strengthen the role our branches play at the heart of communities across the country.
“This is a first step in the right direction…”
“The additional business rates support announced today for small businesses is also welcome news. Business rates relief for Post Offices is something we’ve been campaigning for, on behalf of our postmasters. This is a first step in the right direction and we’ll continue our conversations on further rates support for branches.”
Soft drinks
The British Soft Drinks Association (BSDA) also commented to the Budget, but through the lens of the upcoming Deposit Return Scheme (DRS), due in October next year across the UK.
BSDA director general, Andy Bagnall, said: “With our members already facing significant economic headwinds, we welcome the Budget measures that provide breathing space for businesses and consumers, particularly business rates relief.
“Soft drinks are integral to UK high streets, accounting for one in five convenience store purchases. We’d hoped to see movement on the decision to apply VAT to unredeemed deposits under the UK’s DRS.
“Applying VAT could divert funding away from recycling infrastructure and increase costs for consumers. The BSDA has pressed ministers on this issue for several years and will continue to push for progress in the coming weeks.
“It’s positive that the Budget made no changes to the Plastic Packaging Tax, including its rates and thresholds.
”The tax’s effectiveness should now be reassessed as part of a wider review of packaging policy, ensuring it works alongside the DRS, that the Packaging Recovery Notes system is overhauled and that hospitality businesses are not paying twice for packaging waste management.”
New beginnings
Finally, Michael Shapiro, a partner at law firm, Spencer West LLP, said the Budget could actually spell the beginning of a revival for smaller high street stores.
Shapiro said: “The headline change for UK businesses is the help needed to protect the high streets we know and love by increasing the business rates threshold.
“As we know that every relief needs a source to pay for it, it was perhaps a shrewd move to align this with taxes on gambling and carving out adult games centres and vape shops from this relief. Business rates are to be devolved by the end of the decade so that 20% of revenue will remain in the area they’re collected.
”These measures combined might encourage the smaller, independent and artisan shops back on the high street…”
“These measures combined might encourage the smaller, independent and artisan shops back on the high street and return them to thriving hubs of retail, leisure and community through sustainable and longstanding businesses.
“On the face of it, not going ahead with funding business rate cuts through the mooted tax of warehouses run by large online retailers abates the risk of these taxes ultimately being passed onto the consumer.
“Pleasingly, for high street businesses and their customers, all of these measures should promote some level of confidence and certainty for the future.”
No comments yet