Spring Budget 2023: what do the latest measures mean for independent retailers?

Sarah Agnew on Unsplash

Chancellor Jeremy Hunt’s Spring Budget is already facing criticism over its lack of support for small businesses. However, many welcome plans to help parents and fuel the economy by getting people back into the workplace. Here industry insiders share their thoughts on the government’s latest measures…

“This budget may improve consumer confidence, but it does little to boost the confidence of businesses”

Andrew Goodacre, CEO, Bira

“The future from the Spring Budget looks brighter, but businesses are still in for a rough few months ahead. However, we hope today’s forecast for the future helps improve customer confidence and will drive economic growth.

“The chancellor was upbeat about the economy in that we are likely to avoid a recession and forecast growth is better than expected. We wanted to hear about plans for growth and we were told about new investment zones, increased capital tax allowances for business investment, and £200 million in local regeneration.

“These are positive measures, but in long term are not necessarily addressing the challenges faced by businesses on the high street today. While we are pleased with the focus on growth, many of the big announcements are focused on long-term investment.

“We hope that the better economic forecasts and more people returning to work will improve consumer confidence – often the key driver for high street economic growth. Unfortunately, though there was nothing to ease the fears of indie retailers dealing with the pressures of today.

“The pressures of inflation, high energy costs, and energy support are set to reduce by 95 per cent in April, and wages are set to increase by 9 per cent. This budget may improve consumer confidence, but it does little to boost the confidence of businesses on the high streets throughout the UK.”

“The broken Business Rates system remains a drag on business investment, jobs, and economic growth”

Helen Dickinson, chief executive, the British Retail Consortium

“In the face of volatile demand caused by high inflation and low consumer confidence, measures to support households with the cost of living, such as the ongoing energy bill support and changes to childcare costs, are welcomed. However, many businesses are weighed down by a myriad of higher costs right through the supply chain. Government must do more to limit one of the biggest drags to retail investment, which is oncoming regulatory burdens heading down the track, or risk a crash in business investment and further inflationary pressures.

“The chancellor understands the need to train people to re-enter the workforce, yet he missed a key opportunity to fix the issues with the Apprenticeship Levy system that would support this very goal. Over the last three years, businesses have lost £3.5bn in unused Levy funds. To break this cycle of wasted investment, it is vital that government allows businesses to use their hard-earned Levy funds for a wider array of skills courses. Without spending a penny, the chancellor would increase investment in our workforce, helping businesses to prepare the UK economy for the skills it needs.

“While the Autumn Budget brought in some welcome changes to the Business Rates system, further reform is needed. The broken Business Rates system remains a drag on business investment, jobs, and economic growth. Rates must be paid in full whether firms are making a profit or a loss. This makes Business Rates the final nail in the coffin for many struggling stores – shutting shops, costing jobs and preventing new stores openings. The chancellor should make good on the Conservative 2019 pledge to reform Business Rates and lay out a clear roadmap for future reforms.”

“While there are some positives, the government’s lack of support for small firms is glaring”

Martin McTague, chair, Federation for Small Businesses (FSB)

“The chancellor has set high expectations for supporting small firms during these challenging times, but today’s Budget will leave many feeling short-changed. The distinct lack of new support in core areas proves that small firms are overlooked and undervalued. Budgets are about tough choices, and with today’s £billions being allocated to big businesses and households, 5.5million small businesses and the 16 million people who work for them will be wondering why the choice has been made to overlook them.

“We’ve got a Budget that on energy helps households but not small firms.  On business taxes, it spends £27bn extra on big businesses, arguing that small businesses are already catered for. This will leave to a feeling of being left behind instead of being considered equal partners in economic recovery – trickledown economics here simply does not work.

“Proposals to help people with health conditions are ill-designed and won’t help people get back to work, and we fear the work capability assessment changes won’t happen for years. The chancellor has failed to take any action to make it easier for small firms to recruit people locked out of the labour market. Those with health conditions and disability have been let down by a government that does nothing to work with small employers and is continuing with its failing Jobcentre-focused approach. Small measures on subsidising occupational health are welcome but not the big bang needed.

“Measures on the over 50s are token efforts at best, though we are pleased the government is committing to the skills bootcamp model.

“The principle of what’s announced on childcare is positive – but this government’s Achilles heel is in delivery and practicalities, so there needs to be more work with providers to make sure it can work. Providers will be worried that funding will not meet the expectations set out. The government must remember that delivering safe childcare is not just a matter of social justice, but a matter of economic imperative. The key test for providers will be whether the funding still allows them to cover their costs – while balancing the books at the same time.

“The fuel duty freeze is a result of FSB’s campaigning and the springboard small firms need to help navigate the difficult roads ahead. This will save them money and provide some breathing space, allowing them to focus on growth.

“However, some of today’s smaller measures will benefit the economy. The increase in draught relief will also go a long way to helping the Great British Pub.  The enhanced R&D tax credit is a significant step towards promoting innovation. However, the large proportion of firms who fall outside of the 40 per cent intensity threshold will be left feeling mystified by the change in policy since last Autumn. R&D tax credits have been the most effective industrial policy of the last ten years, creating cutting edge products and services in the small business community.

“While there are some positive words in today’s Budget, the government’s lack of support for small firms in critical areas is glaring. The chancellor stressed that the UK is one of the best places to do business and we’ll avoid a technical recession this year – but small businesses need more ambition and more focus. Action is what counts if we are to reverse the 500,000 small businesses lost over the last two years. It’s high time the government put small firms at the top of the agenda and lend them the necessary support on the path to economic recovery.”