Autumn Budget 2021: experts analyse what the new measures mean for indies

Following Rishi Sunak’s Autumn Budget 2021 announcement, retail insiders dissect what the new measures could mean for fashion indies…

“Reducing rates by 50 per cent next year is in fact a 100 per cent increase on what businesses are actually paying”

Andrew Goodacre, Bira, CEO

“The devil is in the detail. The rates bill for this year was reduced to 25 per cent (of normal levels) in response to covid. Therefore reducing rates by 50 per cent next year is in fact a 100 per cent increase on what businesses are actually paying. On top of everything else, this will be a challenge.

 

“We believe more could have been done. This is especially true considering all the other inflation-busting increases such as wages, energy, supply chain, etc.

“We also welcome the use of rates relief to encourage investment in properties and the shorter time periods between rates reviews (reduced from five years to three years). The problem is that 2022 will more about survival than investment. It will be a really difficult year for the high street and we hoped for more recognition of this to protect local communities, jobs and livelihoods.

“The business rates relief ‘cap’ of £110,000 has also raised questions with Bira and we are seeking clarity on whether this is per property, or per business.”

“The announcements fall short of the truly fundamental reform of business rates promised in the government’s 2019 manifesto”

Helen Dickinson OBE, chief executive, the British Retail Consortium

“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.”

Business Rates

“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 per cent 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 per cent 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

“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

“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.”

On Apprenticeships

“The Government’s commitment to deliver apprenticeship system improvements in the coming year, including its objective of supporting increased flexibility in apprenticeship training models and streamlining employer support mechanisms, is welcome. Reform is essential if retail is to maximise its use of the Apprenticeship Levy to support the development and upskilling of its workforce.”

This article is being regularly updated – check by later for more analysis. 

Photo by Philip Veater on Unsplash