John Healey, Chancellor of the Exchequer
Chancellor John Healey has laid out the Government’s plans for the economy in his inaugural Autumn Budget, stating that he will provide business and families “breathing room”.
Healey set out three priorities for the Government: easing the cost-of-living pressures facing households and businesses; supporting British enterprise to drive innovation and growth across the country; and addressing major challenges in energy, national security, public sector procurement and reform, and housing.
The budget addressed the issue of boarded-up high street shop, with an increases in the business rates applied to high street stores.
From April, the business rates threshold will increase from £12,000 to £18,000 across the retails, hospitality and leisure sectors.
Healey said: That means 70,000 more businesses. I’m not just cutting their rates, I’m taking them out of paying business rates altogether. That means half of our shops, restaurants and gyms pay no business rates at all.”
Speaking on what the budget means for retailers, Helen Dickinson, Chief Executive of the British Retail Consortium, said: “Today’s Budget will see retail costs keep climbing as the Chancellor failed to provide the breathing space he promised.
“Retail faces £41 billion in business taxes this year, over 120,000 jobs have been lost in just two years, and one in seven shops lies empty. Yet employment costs continue to rise. Business rates continue to rise. The Government cannot keep talking about reviving high streets while failing to address the rising tide of costs that holds them back.”
Ms Dickinson also commented that the Budget was a “smoke and mirrors announcement” on business rates.
She added: “The Chancellor’s headline announcement that he will ‘freeze [retail, hospitality and leisure] rates in real terms’ means a 3.5% increase – another body blow to high streets already struggling with rising costs and empty units.
“It will add around £250 million to retailers’ bills next April as one in seven shops lies empty. And while we welcome the decision to remove 70,000 small high street businesses from paying business rates altogether, the overwhelming proportion of employment and rates come from the 500,000 medium and larger retail outlets whose bills will go up once again.”
Conversely, Andrew Goodacre, CEO of the British Independent Retailers Association, said: “This Budget has not contained any of the nasty surprises from the past two years. In fact, we are pleased to see Small Business Rates Relief increased by 50%, and all other rates increases next year linked to inflation.
“Bira raised these issues as genuine concerns on several occasions in the run-up to the Budget, and we are delighted that the Treasury has listened. This is a real win for independent retailers. We would rather not have seen any increases at all, and we will push for that next year.”
The National Living Wage and National Minimum Wage will rise by 3.9%, an increase of 50p per hour for workers aged 21 and over, with lower increases for those aged 18 to 20. However, there were no changes to employer National Insurance contributions or to energy costs.
Mr Goodacre added: “On the negative side, the lack of measures to reduce the cost of employment and energy is disappointing. Increasing the Employment Allowance would have been a real help to small employers, and this was a missed opportunity.”
