Chancellor Philip Hammond has announced his Autumn Budget, unveiling an increase to the national living wage, an April switch to CPI for business rates - and a surprise freeze in beer duty. Here’s how key industry bodies and companies have reacted.
North Europe president Jason Warner said: “We welcome today’s announcement by the Chancellor to freeze beer duty, providing a timely boost to this iconic industry. As a leading brewer, we look forward to continuing to work with the Government to promote a smart drinking culture in the UK, especially in relation to lower-strength products. In the meantime, we join the industry in saying Cheers to the Chancellor.”
President Alex Probyn said: “Even with rates rises limited next year to September’s CPI rate of 3%, this still drives revenue receipts up by £884 million with the struggling retail sector shouldering £226 million of that rise. A switch to CPI brings a concession in tax rises of about £266million, but this is a pretty cheap giveaway by Government. The Chancellor should have gone further. A rates liability freeze was the minimum that business needed.”
“Arla Foods UK was disappointed by the Chancellor’s omission of plans for the UK’s £100 billion agri-food industry in his Autumn Budget. As we prepare to leave the EU, it is important now more than ever to take a long-term view to fiscal policy to help lay the groundwork for a successful departure. This is crucial for the UK’s world-class agri-food industry, as one of the areas to be impacted the most as the UK moves to leave the EU and replace its Common Agricultural Policy (CAP).
“Arla Foods UK believes that, for the Arla cooperative and the farmers who own it, the replacement of the CAP should be a key priority for the Government, especially as agriculture relies on far longer planning cycles than the broader economy and a successful departure from the EU will rely on farmers.
“We welcome recent indications that a period of implementation after March 2019 is preferred, as our farmer owners will need sufficient time to prepare for any changes, but urge the Government to have a domestic framework formulated now rather than deferred until the moment of full departure to allow for the planning cycles agriculture demands as a sector. Only by acting now to ensure we have the relevant mechanics in place can we future-proof farming and ensure a Brexit that maintains our agricultural competitiveness.”
Association of Convenience Stores
The 4.4% increase in National Living Wage will mean retailers have to make tough choices
Chief executive James Lowman said: “We welcome the introduction of more frequent revaluations but only if this doesn’t place more burdens on retailers to assess and relay information on their properties to the Government. The introduction of more frequent revaluation must be delivered hand in hand with a simplification of the business rates system, where possible removing the smallest business from the burden of rates. ”
“The move from RPI to CPI for business rates indexation will reduce rates bills for local shops. However, the Government needs to ensure that existing reliefs are getting through to local shops that need it, currently 81 councils still haven’t set up schemes to distribute discretionary rate relief despite this being announced and funded in the March 2017 budget.”
On the increase to the living wage: “The 4.4% increase in National Living Wage will mean retailers have to make tough choices in order to maintain staffing levels by delaying investment, reducing staff hours or reducing the number of people employed in their stores. We will continue to work with the Government to help them understand the impact the employment costs are on having on the convenience sector.”
On the alcohol duty freeze: “The Alcohol duty freeze will be welcomed by local shops across the country. We are also pleased the Chancellor has heeded our advice to delay future alcohol duty changes until 1st February each year so retailers are not burdened with changes prices during the busy Christmas period.”
On tobacco duties: “Every time the Chancellor increases tobacco duties he drives more consumers to the illicit market and away from local shops. Last year we saw lost tobacco tax revenue to the exchequer increase by £100million, urgent action is need to provide HMRC and Trading standards officers with more funding and powers to tackle the illicit tobacco market.”
British Beer & Pub Association
Beer drinkers will raise a glass to the Chancellor tonight!
Chief executive Brigid Simmonds said: “The Chancellor’s decision to freeze beer duty and cancel his planned rise is an early Christmas present for beer drinkers and pubgoers worth £117 million this year and in subsequent years. It will secure over 3,000 jobs in pubs and the wider beer supply chain that would otherwise have been lost. This real-terms duty cut shows he has listened to our campaign and the concerns of pubs and pubgoers, and acknowledged the special role that beer and pubs play in the nation’s social life.
“With over 80% of the beer drunk in the UK brewed in the UK, he has understood the important capital investment made in the UK by our members. This is absolutely the right step towards a fairer deal for Britain’s beer drinkers and pubgoers and a vote of confidence in a very British manufacturing industry worth £23 billion to the UK economy. Beer drinkers will raise a glass to the Chancellor tonight!”
British Poultry Council
Chief executive Richard Griffiths said: “We welcome the vision for Britain highlighted in the Budget statement today and share the Government’s commitment to use Brexit as an opportunity to invest in skills and infrastructure that will support jobs of the future. We welcome the Government’s focus on technological revolution and investments in innovation. We would like to see more Government-backed fiscal incentives for investments in new infrastructure and green technology that will ensure that more British food is available, reduce resource use, lower emissions, boost rural growth, and increase business productivity.
“The Chancellor’s commitment to work with businesses and build flexibility into the Apprenticeship Levy will go a long way towards nurturing our talent, promoting the poultry meat sector as a career option, boosting rural employment, and strengthening our economy.”
British Retail Consortium
The announcement of an investigation into how a tax on single use plastics can reduce waste is interesting
Chief executive Helen Dickinson said the decision to bring the move from RPI to CPI forward by two years was a “hugely welcome and positive move”.
“Introducing three yearly revaluations is also a positive move to improve fairness of the system. These are encouraging first steps, so now is the time to commit once and for all to putting the rates system on a more affordable and sustainable footing, to support local communities, shops and jobs. We are keen to work with Government to deliver on that.”
On the new tax system for single-use plastics, Dickinson said: “The announcement of an investigation into how a tax on single use plastics can reduce waste is interesting. It begs a number of questions about how the scope of any taxes might work, the timeframe for introducing them, what Ministers hope to do with the receipts, and the impact on consumers and businesses.
“We look to Government to ensure this investigation takes a comprehensive approach to waste, recycling and the circular economy, of which single use plastics and drinks bottles are but one component. Decisions on specific products need to be taken in the context of the circular economy where all resources are valued and reused. We also still await Defra’s 25 Year Environment Plan and a waste and resources strategy. What is needed is a broad, coherent approach rather than numerous piecemeal announcements and initiatives.”
On the increase to the living wage, Dickinson said: “We welcome the Government’s approach to the National Living Wage for 2018. In a challenging environment, the retail industry has worked hard to implement the National Living Wage, with many paying beyond the legal requirement, as well as extending the rate to all staff irrespective of age.
“Wage growth in retail continues to outpace the economy-wide average. Maintaining productivity gains remains crucial to sustaining this wage growth as employers contend with recent and upcoming changes to statutory employment costs. Therefore, it’s important that future increases continue to be moderate to reflect this and are subject to a fully independent Low Pay Commission.
“We are also encouraged by the Chancellor’s commitment to keep under review the flexibility on how Apprenticeship Levy funds can be spent. Without such flexibility the retail industry will not be able to play their part in supporting the government to meet their three million target.”
National Chairman Colin Valentine said: “Pub goers were fearing the worst from this Budget but will now be raising a glass. Freezing beer duty will help arrest rising beer prices and keep the British pub going tradition affordable. I will be celebrating this decision in my local this evening and I hope millions of beer lovers across the country will be doing the same. Now, to make a real, lasting difference we hope that this move represents the first step towards a long-term freeze. CAMRA is calling on brewers to match the Chancellor’s support by holding beer prices so that local pub goers benefit.”
On cider, Valentine added: ”This will be disappointing news for a number of traditional cider producers who will be hit by this measure unless an exemption for traditional produce can be secured.”
Bruce Ray, vice president corporate affairs, for Northampton-based Carlsberg UK, said: “Today’s announcement about a freeze in beer duty will be welcomed by brewers, publicans and everyone who enjoys a glass of beer in the pub. It will support continued innovation and investment, create new jobs, attract tourists and ultimately benefit our beer-loving nation. This is a wonderful achievement secured through cross-industry work, and we are pleased that government has recognised that a thriving and prosperous beer and pub industry is what our nation needs.”
Mark Tighe, CEO of Catax, said: “In terms of future-proofing the UK economy, this was an extremely encouraging Budget. The fact that the Chancellor focused on the need for innovation so early in his speech shows the structural importance of R&D to the modern UK economy. The increase in the Research and Development Expenditure Credit from 11% to 12% is a crucial step forward for UK research and development. With Brexit looming ever closer, the need for the UK to position itself as a major centre for global R&D has never been more important. An increase to 15% would have been a far more robust statement of intent, and many in the industry had quietly been hoping for it, but a rise to 12% should be applauded.”
Diageo Great Britain
MD Charles Ireland said: ”The duty freeze provides some respite for Britain’s drinkers, although taxes on spirits remain amongst the highest of any major economy in the world. We have been greatly encouraged by the fantastic support of Parliamentarians from all parties, especially Ruth Davidson, David Mundell and the other Scottish Conservative MPs, who have called for a fairer deal for Scotch and spirits: an industry that generates £5 billion of exports and employs 50,000 people. We now repeat our call for a review of the alcohol duty system to deliver fairness for Scotch whisky, which is exactly the kind of unique British product the UK needs to thrive after Brexit.”
Federation of Wholesale Distributors
James Bielby said: “We have told HMRC that legislation is the only way to regulate the sale of white ciders, as asking wholesalers to voluntarily de-list or sell above market prices has a serious knock-on effect on other product sales. We will work with HMRC on any increased duty rate and with cider producers to look at how lower abvs will perform in the channel.”
Food and Drink Federation
Director general Ian Wright said: “We welcome the focus on investment in skills, infrastructure and R&D in the Chancellor’s Budget statement today. If we are to unlock the productivity potential within UK food and drink manufacturing then boosting skills, innovation and exports will be critical. We hope to see an acknowledgement of the progress of our work to support these priorities in next week’s Industrial Strategy White Paper.”
Thanks to the chancellor more and more smokers will buy illicit tobacco
Simon Clark, director of the smokers’ group Forest, said: “This is the second increase this year. Tobacco duty is already punitively high. A further tax hike discriminates against smokers who are less well off. Once again the poor are being sacrificed on the altar of public health. The prime minister famously said her government wanted to help those who are just about managing. Instead of helping, the chancellor will push more people into poverty unless they quit smoking or turn to the black market. Thanks to the chancellor more and more smokers will buy illicit tobacco at home or purchase their tobacco abroad. The loss of revenue to the Treasury will far outweigh any health benefits to the nation.”
Founder and owner Steve Perez said: ”This is great news from the government, and I am pleased the Chancellor has listened to the industry. It’s great news particularly for pubs who have been under pressure due to increased business rates and minimum wage. We will toast The Chancellor with a gin and Franklin’s Tonic this Christmas and make the most of it until the sugar tax comes in force in April!”
Simon Mydlowski, a partner and leisure and hospitality expert at Gordons law firm, said: “The freezing of alcohol duty on beer, wine, cider and spirits is a clear recognition of the thriving independent hospitality sector in the UK. We have seen significant increases in independent bars and restaurants opening year-on-year. Consumers have been voting with their feet and supporting these establishments as a lifestyle choice rather than being economically driven and the freeze on duty will mean growth in the sector is not hampered by price rises. Support has also been shown for small pubs with the extension of the £1,000 discount for pubs with a rateable value of less than £100,000 until March 2019.”
Institute of Economic Affairs
Mark Littlewood, Director General, said: “The Budget featured a vast array of spending commitments without a great deal of clarity on how they will be funded. Several of them are ill-thought-out and minuscule measures. A young person’s railcard is a device to make it easier for people in their 20s to travel from a house they cannot afford to a well-paid job they do not have.
“[However] the Chancellor should also be commended for avoiding some obvious pitfalls – such as the lowering of the VAT threshold – and resisting calls to ratchet up most excise duties and end the cap on public sector pay. He should, however, have considered an end to national pay setting to allow greater flexibility.”
COO Michelle Carvell said: “We welcome the government’s confirmation of plans to call for evidence for introducing taxes or other charges on single-use plastics. Following the successful introduction of key plastic waste reduction measures such as the plastic bag charge, the UK has a real opportunity to develop a strong reputation for best practice in tackling this international issue, provided that the approach taken is both strongly collaborative and broad in scope.
“The need to cut down single-use plastics waste is not just a UK issue – plastic wastage is a global problem. A uniform approach is key to establishing a successful solution. Many of our clients have a presence in multiple markets worldwide, which brings with it an awareness of just how widely environmental obligations can differ from country to country; even in nations which are also part of a single entity such as the EU.
“Differences in approach add both complexity and cost to environmental compliance for firms, and slow down this essential process of change. It’s critical, therefore, that the government works closely with businesses to ensure the view taken to solve this issue is both panoramic in breadth and strongly collaborative to determine the best solution for all parties.”
National Association of Cider Makers
”We are pleased that the Chancellor has listened to our concerns about the long-term decline in cider. This freeze in excise duty announced in the Budget today is much needed, as it will work towards supporting the industry and our rural communities. However, we were disappointed that the Chancellor has been unable to respond to our call for a reduction of 2p per pint that we believed would have helped bring the industry back into growth in the longer term.
With the announcement of a new cider duty band, we look forward to working with government on the responses to the consultation. We will be looking at the details of this new duty band to ensure that it does not adversely impact the ongoing success of cider makers across the UK, whatever their size.”
National Farmers Union
President Meurig Raymond said: “We are disappointed to see no meaningful measures to help prepare farming businesses for life outside the EU in today’s Budget statement. With most of the emphasis on urban growth, there is little in the way of measures to benefit rural communities. We do, however, appreciate that this is a fairly stable Budget that does not appear to have any adverse impact on our industry.
“In these times of uncertainty, and ahead of significant upheaval, we need to have sustainable and viable businesses producing the nation’s food. Our calls to create the right environment for investing in farming, to mitigate risks, are yet to be answered. We will look with interest to next week’s Industrial Strategy launch and hope it will include specific measures to support the agri-food sector.”
Mark Easy, Business Sector Specialist at NFU Mutual, said: ”It was encouraging to see some measures made by the Chancellor to keep the vibrant social spaces of the community alive – our high streets and pubs.“It is promising that concerns about the unfairness of business rates are being listened to, although further reform to the business rates system is needed to provide retailers with the security they need. Bringing forward the switch to the CPI inflation index to April 2018, and the ability for businesses to have rates revalued, will go some way to improving the fairness of the system in a measure that the Chancellor says will save businesses £2.3bn. Pubs with a rateable value of under £100,000 will welcome the continuation of the £1,000 discount rate for a further year, but they alongside retailers and other businesses under the current rating system will be seeking further assurances to give them confidence for the medium to long term future.”
CEO Dominic Taylor said: “We’re relieved to see today’s announcement that business rates will switch from RPI to CPI in 2018, coupled together with a move to revaluations every three years, and so will the majority of the UK’s 50,000 strong convenience store market. While the changes are welcome, more can still be done to ensure that an outdated and flawed system is overhauled. As yet, we still have no detail on the timeline for business rate reform.
“The convenience sector is one of the most democratic around and stores are located in every type of neighbourhood – from the wealthiest to the most deprived. For some people, they’re the only easily accessible place to pay bills, take out cash, and collect parcels, as not every neighbourhood is adequately served by cash machines, supermarkets or Post Offices. The business rate system based on transitional adjustment limits the amount bills can go down and that’s simply unfair. It’s wrong that retailers located in areas where property prices are going down should have to face disproportionately large bills. More frequent revaluations will go some way to help by at least allowing stores up and down the country to benefit from fluctuations in the property market.”
Petrol Retailers Association
Chairman Brian Madderson said: “Whilst it is a welcome announcement from the Chancellor that the government will freeze both petrol and fuel duty for a further 12 months from April 2018, it falls a long way short of demands from our members and the haulage industry for a significant cut to fuel duty. This budget represents a missed opportunity to fuel economic growth and minimise inflationary trends. The PRA will continue to press for fuel duty cuts to boost our economy and to move the UK towards a level playing field with fuel duty levels in EU countries as we head towards Brexit. At present over two million foreign trucks enter the UK via the short-sea ferry, and tunnel routes having already filled their long range tanks with low tax diesel on the near continent. These vehicles unfairly compete with UK based hauliers and contribute little to the Treasury from fuel taxes. This is a harsh anomaly, which the Government needs to address without further delay.”
Alan Laing, Managing Director, United Kingdom and Ireland, said: “We welcome the government’s additional funding and support for digital skills and retraining programme with the CBI and TUC – particularly in computer science and those jobs augmented by technology. In this “technological revolution”, we must enable the UK to accelerate its ambition of closing the skills gap; and ensure all Small and Medium sized businesses receive the necessary support at local level to upskill workers and adopt readily-available technology applications to potentially unlock £39.9bn for the UK. Today, 120 days every year is being lost on admin within every small and medium business, equating to 5% of manpower, resulting in poor productivity and the stilted growth reported by the OBR today.”
“We also welcome the £500m investment into the UK’s technology sector, universities and R&D, but cannot overlook the need to invest in a wider understanding around bias and ethics to ensure that we are fully aware of how these technologies are being developed prior to applying them to our businesses.”
Scotch Whisky Association
Karen Betts, Scotch Whisky Association chief executive, said: “We welcome the freeze in excise duty on spirits, which helps support the competitiveness of Scotch – a major UK export - in uncertain times. My thanks go to all MPs and MSPs who have supported Scotch and helped convince the Chancellor that a second duty rise in 2017 would have hurt the industry and consumers.
“But tax on Scotch is still very high. £4 in every £5 spent on Scotch goes to the Treasury, and we believe this is a missed opportunity. We believe a cut would have delivered more revenues to the government as well as underscoring government support for an important UK manufacturing industry, which supports 40,000 jobs across the UK.”
Chief executive Jonathan Neame said: “Today’s Budget will be welcomed by the leisure industry. The freeze on alcohol duties has been long awaited following a barrage of unprecedented economic headwinds from Brexit to inflation. The increase in duty this spring saw 35 million fewer pints sold year-on-year, demonstrating the direct effects of Government intervention on one of the most over taxed industries in the UK. More support for the sector is required. Businesses like Shepherd Neame must be encouraged to further invest in new pubs, hotels especially in this time of uncertainty as we navigate our way through Brexit.”
Solar Trade Association
Leonie Greene, head of external affairs, said: “It isn’t right that solar is being put at a disadvantage in the UK where it does not benefit from any of the tax breaks available to fossil fuels. The Chancellor recognises our economy has no future without a planet, but is bending over a North Sea barrel to offer fossil fuels even more tax breaks. Importantly, the Budget states that apart from honouring existing commitments, there will be no new public support for renewables that lead to an increase in consumer bills, until 2025. There is also no increase in carbon pricing, meaning no clear long-term signal for investors.
“Let’s be clear; the solar industry is not asking for any new public support – but we urgently need just some of the tax breaks available to fossil fuels today. And the whole energy industry needs a clear signal to continue to invest in low carbon power. We also believe solar can win effectively subsidy-free clean power (CfD) contracts today, so we now hope to see clean power auctions for established technologies resume on that basis.The Chancellor still has an opportunity to take a small step in the right direction by including solar under the eligible technologies list for Enhanced Capital Allowances in the Finance Bill, when it goes to the Commons.”
Wine and Spirit Trade Association
Miles Beale, Chief Executive of the Wine and Spirit Trade Association said: “We are pleased that the Chancellor has found his festive spirit and listened to the call from the WSTA and its members and has frozen wine and spirit duty. He has shown the Government is in touch with what consumers want and is supporting an industry which is proving to be a real asset to British business. He has recognised that rebalancing the UK’s excessive duty rates is a win/win for both the Treasury, the wine and spirit trade – not to mention consumers. This decision will be celebrated by millions who will raise a glass this festive season!”