As chancellor Rishi Sunak announces this year’s Budget, industry figures from retail, wholesale, hospitality and finance share their reactions
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Steven Alton, CEO, British Institute of Innkeeping
“With the package of support from government laid out, our pubs can begin to look to the future of their businesses once more. The extension of furlough to September will help our pubs to manage the return of their teams until they are able to trade freely again. The confirmation of further reductions in business rates will allow them time to recover, but until our nation’s pubs are able to return to normal trading, the vast majority of these businesses will still be loss making.
“The extension of the VAT cut is welcomed, helping food businesses through the summer, however for our community wet-led pubs, the benefit will be extremely limited and they will not be able to trade profitably until all restrictions are removed.
“The news on further grants is positive, but in no way covers the basic running costs of our closed pubs or compensates them for the lost income over the last 12 months. For many of our members, these grants will not even cover the furlough contributions that will be needed to safeguard their teams until May, let alone June.
“The support announced gives our sector an opportunity to rebuild as they reopen in line with the government roadmap, however, any changes to their plan will need to be matched with appropriate support measures.
“I have no doubt that customers will return to their local pubs at the earliest opportunity and once again be given a fantastic hospitality experience. Our members have shown throughout this crisis their commitment to their local communities, and their ability to keep customers and staff safe. They will need all of our support over the coming weeks and months, as we all return to the great British pub.”
Paul Baker, founder, St Pierre Groupe
“The past 13 months have challenged all of us and I don’t think anyone envies the role of Rishi Sunak today. That said, I am encouraged to see more bespoke support for an industry which has not wavered despite the challenges thrown at it.
“The UK food and drink industry as a whole contributes £121 billion to the economy in normal times – almost 10 per cent in 2018. Whilst the nation is told to stay at home, those who work in the food and drink industry continue to work relentlessly to ensure the food supply chain keeps moving.
“Additional pressure has been put on supermarkets to feed the nation and the hospitality sector has been left in tatters. So, to see special measures announced for the hospitality sector, in particular, will provide a glimmer of hope for many UK businesses. The restauranteurs of this country were responsible for £24bn revenue in 2019, boosting other industries such as tourism and leisure – it’s great to see a government acknowledging their contribution and working to protect them.
“The extension of VAT reduction is a lifeline. Cut Tourism VAT Campaign warned that VAT rate reverting to 20% in April would mean the loss of 310,000 more jobs in hospitality and tourism, so it’s a relief to many to hear VAT will remain at 5 per cent. The gradual return to 20% over 12 months will also take the pressure off.
“Hospitality operators have been well supported with an extension to the holiday on business rates. Last year, that holiday negated the economic impact of the virus by £10.13bn, money that many operators would struggle to find – especially whilst they’re unable to open up again until later in the year. My only criticism of this, is the gradual increase from June. Despite the roadmap, businesses have a lot of lost time to make up for and whilst it displays confidence in a return to ‘normal’ from June, many businesses will still struggle to manage even the proposed third of the business rate after spending more than a year unable to operate.
“Admittedly, it’s encouraging to see that no major increases on corporation tax will be introduced until 2023. The dichotomy of increasing corporation tax to protect the voting public, balanced against the need to engage big businesses who will be relied upon to save and create millions of jobs over the coming 12 months, is no doubt a difficult juggling act.
“Today’s budget had to deliver confidence for businesses and the announcement of the ‘Super Deduction’ is evidence of its aim to do exactly that. Businesses, particularly those like our own which drive international growth, taking British brands abroad, are ready and willing to invest and the super deduction certainly looks as though it will be easier to commit to doing so.
“Whilst I suspect we’ve not yet heard the last of plans to recoup the costs of this crisis, I commend the decision not to pull back support just yet. We’re not out the other side of this and to try to claw back costs now could jeopardise the long road back to ‘normal’. We recognise, as a leading food and drink business, that we have a key role to play as part of a national effort to bounce back. St Pierre Groupe doubled its headcount during 2020 and has no plans to slow down, providing roles and support for the industry when it needs them most. The best government can do for the time being, is to support businesses who will be key to economic recovery”.
Minette Batters, president, NFU
“The support offered to businesses by the government throughout the pandemic has been incredibly important in keeping many viable over the past year.
“In the longer-term, farm businesses can play a key role in the investment-led recovery that the chancellor has set out today. With an ambition to reach net zero by 2040, British farming can be a pivotal part of meeting our climate ambitions and increasing productivity.
“Farm businesses, and their diversified enterprises, will welcome the chancellor’s decision to extend the reduced rate of VAT for retail, hospitality and leisure, extend business rates relief, offer further grants for the self-employed, introduce a new recovery loan scheme and make restart grants available for tourism and hospitality businesses. These are all measures that will support rural businesses to recover from the impact of Covid-19.
“The announcement of the UK Infrastructure Bank to finance green investment could be a crucial tool in stimulating investment and driving green economic growth. The launch of the Levelling Up Fund could also be positive for rural areas in narrowing the growing divide between rural and urban. We look forward to receiving more detail on how this may work in practice.
“However, we are disappointed that the ‘super-deduction’ on machinery investment is only applicable to limited companies and not available to all businesses, especially when significant investment in new farm technology is required.
“With all of these announcements, it’s incredibly important that the needs of rural businesses are accommodated and that they are able to access appropriate funding. Our new ‘Levelling up rural Britain’ report highlights how investment in British farming and rural Britain can bring huge benefits to sustainable food production, but also the entire nation; delivering jobs, green growth, exports and wellbeing for the entire nation. It’s vital it is embraced by the Treasury and the government.”
David Beadle, vice president - senior credit officer, Moody’s
“The restart grants will provide a much needed boost for many small businesses in the hospitality sector, from pubs and restaurants to hotels. We expect pent up demand to drive a strong summer across the sector but the journey on the road to full recovery to pre-pandemic levels of credit quality will be long and arduous.
“High failure and closure rates in the restaurant and pub industries will boost the credit quality of survivors. However, large operators such as Stonegate Pub Company Limited will also have to contend with continued lower footfall in city centres as work from home practices stick for many office workers.
“An extension of the business rates holiday until the autumn will be welcomed by store-focused retailers, especially those categorised as non-essential and forced to close stores for large parts of the past year. The planned easing of restrictions on opening and social distancing in the coming months is credit positive for these companies as even with growing online presences physical store estates remains the engine for profit and cash generation for most.
“We see scope for improvement in credit quality of affected retailers such as Marks & Spencer and Matalan but execution remains key in the face of intense competitive pressures, in particular from online specialists like Asos and Boohoo which have bolstered their strong organic growth by recent acquisitions of former sector stalwarts.”
Miles Beale, chief executive, Wine & Spirit Trade Association
“The decision to freeze wine and spirit duty comes as a huge relief for British businesses, pubs, restaurants and its suppliers following the crushing – and continuing – closure of the hospitality sector, for months on end, during the pandemic.
“Chancellor Rishi Sunak seems to “get it”. He understands that supporting our industry will allow it to recover, rebuild, create jobs and, in time, replenish revenues to the treasury. He has also shown he is in touch with people from all walks of life who want to enjoy their chosen tipple without getting stung by further tax hikes.
“We will all raise a glass to the chancellor tonight – and look forward to more permanent support for the sector following the review of alcohol taxation.
“We also welcome the extension to the VAT cut for the hospitality sector, but it is disappointing that the chancellor did not extend this to include alcoholic drinks, which would have given the trade a real boost when they are finally allowed to re-open their doors to the public.”
James Bielby, chief executive, FWD
“It’s essential that guidance is issued immediately for the £425m allocated for discretionary business grants, explicitly fast-tracking food and drink wholesalers for the support they’ve been denied elsewhere.
“After a year of burning though their cash reserves, with food and money thrown away because of the government’s short-notice announcements of lockdowns and bungled reopening of schools in January, wholesalers simply don’t have the cash to restock ahead of their hospitality customers reopening.
“The government has relied on this industry to bail it out on several occasions over the last 12 months and there simply isn’t enough left in the coffers to give Mr Sunak the surge in eating out that he’s banking on to revive the hospitality sector.
“With no support for wholesale there’s no food for caterers and no economic recovery for the high street.
“It cannot be the chancellor’s intention that pubs and restaurants will be handed £18,000 to stay closed until mid-April at the earliest, while their wholesalers – who have had to remain open throughout the pandemic, trading at a loss to supply schools, care homes and hospitals – have no direct support.”
Mona Bitar, UK & Ireland consumer leader, EY
“The rumoured online sales tax did not appear in today’s Budget announcement, leaving the retail sector still waiting for details on the chancellor’s intentions. As the sector navigates post-pandemic recovery, greater certainty is needed in this area. With tax consultations deferred until 23 March, the sector will be hoping for more information then.
“Most physical retailers are trying to grow their online business while managing a portfolio of stores as footfall declines. Any new taxes on online sales will need to be set at the right level and introduced at the appropriate time to benefit, rather than hinder, these businesses as they seek to recover from the impact of Covid-19.
“For an online sales tax to be successful, there needs to be a very careful and balanced consideration for different businesses within the sector. Increased online sales do not necessarily mean large profit margins, particularly where businesses are having to invest in their technology and fulfilment infrastructure. Innovation and entrepreneurship should be recognised and supported, particularly in the context of post-pandemic recovery and Brexit.”
Mark Bridgeman, president, Country Land & Business Association
“The extension of the 5% VAT rate is a lifeline for many small tourism and hospitality businesses who have faced crippling consequences of the Covid-19 pandemic. It will allow tens of thousands of businesses breathing space to begin their recovery in 2021, further boosted by hopes of a bumper summer season as lockdown restrictions are eased further.
“But the extension is a short-term crisis response. Government should now begin thinking of how the UK’s tourism and hospitality sectors can thrive in the long term. If we are to compete with other major tourism destinations in Europe – all of whom have VAT rates far below 20% - the UK’s VAT rate should remain at 5% permanently. We estimate this move would add £4.5bn to the national economy, leading to more demand, more investment and more good jobs being created.
“The past 12 months has led to huge changes in the performance of many rural businesses especially in the leisure, hospitality and tourism sectors, with reduced turnover combined with extra costs of sanitisation. Therefore, an extension of the Business Rates holiday until the end of June is welcome news for the sector and is something the CLA has been lobbying intensively for.”
Chris Brook-Carter, chief executive, RetailTrust
“We welcome the promises of today’s Budget announcement and the desperately needed certainties that it provides the UK’s more than four million retail workers.
“Extending the furlough scheme will safeguard roles during the uncertain reopening period, while extending the business rates holiday and providing access to the new restart grant will help get retailers back up and running so that staff can get back to work as soon as possible.
“Retail will have an absolutely vital role to play in tackling issues like youth employment and social mobility as we move out of this crisis, so decisions taken now will not only protect vital jobs and businesses but the social, economic and cultural importance of the sector to the UK.
“People working in retail have been hit hard financially, emotionally and physically during the entire course of the pandemic. They have had to cope with extremely difficult changes in their working conditions, livelihoods have been placed on hold during the lockdown periods, and, very sadly, tens of thousands of people have been left with no jobs to return to due to the pandemic’s devastating impact on shops and businesses up and down the country. This has led to record demand for RetailTrust’s services.
“It is essential that the government and businesses now work together to safeguard our colleagues’ long-term interests and their wellbeing. And as a sector, we all have a responsibility to come together and make the most of initiatives which will help to protect, support and create roles.”
Richard Burnett, chief executive, RHA
“This has been a Budget that is good for business and good for people.
“The chancellor’s announcement of a fuel duty freeze for the eleventh year in succession comes as very good news for the hundreds of thousands of commercial vehicle operators who have been struggling as a result of the pandemic.
“As with every Budget, it contains much more detail than first meets the eye but overall, we consider it to be a Budget based on optimism and right now, that’s something that we all need.”
James Calder, chief executive, The Society of Independent Brewers
“Today, the chancellor spent an extraordinary amount of taxpayers money to help keep the economy moving and jobs protected, pledging almost £59bn to policies including furlough extensions, continued business rates cuts, grants for hospitality of up to £9k and a series of investment initiatives.
“Whilst this is helpful to the broad hospitality sector, it does nothing for the nation’s struggling independent breweries, who desperately needed direct tax cuts and targeted grant support to help them survive until the economy re-opens. What is the point in helping hospitality if there aren’t vibrant, diverse and local beers on offer when the economy re-opens?
“As a result of today’s announcements, more breweries are now more than likely than ever to close, just as there is light at the end of the tunnel.
“Breweries and wet-led pubs will not benefit from the VAT cut extension as it does not apply to alcohol. Breweries will still be paying full business rates, VAT and duty and will not receive specific grant support - and whilst freezing beer duty is welcome, the chancellor is still intending to increase the tax bill for at least 150 small breweries from next January with ruinous changes to small breweries’ relief, putting jobs and the recovery at risk.
“The recovery loan scheme which takes forward CBILS and Bounceback loans will benefit breweries and many will take advantage, but will continue to saddle them with debt, rather than direct grant support, inhibiting growth and investment in the sector for years to come.
“Restart grants of up to £18k per hospitality business will help businesses plan, but once again, it doesn’t look like breweries are automatically included within the definition, therefore are at the mercy of discretionary grants. Different local authorities may grant one business support, one not. One may do this in weeks, others in months.
“The ‘Super Deduction’ policy announcement, giving companies investing in qualifying new plant and machinery assets a 130% super-deduction capital allowance on their tax bills may be beneficial, but detail as to which taxes can be offset against is not yet published.
“Whilst this Budget will likely be celebrated by the broader hospitality sector, it comes as a disappointment to the nation’s struggling small breweries and their supply chain, who have once again been de-prioritised by the chancellor.”
Rob Coleridge, senior associate and consumer sector expert, Irwin Mitchell
“The Chancellor’s £5bn shot in the arm for retail and hospitality firms will go some way to helping some of the smaller businesses reopen, but a wider and more holistic package of support is needed to help them deal with the new normal where online dominates.
“The announcement recognises that the high street requires specialist and more bespoke financial assistance, which it desperately needs and I hope that this is not too little too late.
“High Street businesses are dealing with the multitude of issues which for many include the need make major changes to their business. Challenges to businesses include pivoting to online sales being their dominant revenue source, innovating in how existing high street premises can be used to add value and to interact with consumers in safe but experiential way, and supporting employees that are reluctant to return to work as a result of Covid anxiety.
“Above all, although we are emerging from Covid, there is still a lot of uncertainty which means businesses need to be robust and agile enough to cope with the exaggerated fluctuations in demand and exciting new opportunities that may arise.”
Helen Dickinson, chief executive, British Retail Consortium
“The chancellor has listened to many of our concerns and we welcome the extension of key business funding schemes. This announcement provides some targeted support to struggling businesses across the country. However, for many retailers the devil will be in the detail, with caps on funding limiting access to this support. Retail accounts for over three million jobs, spread across every region of the UK. Supporting the success of our industry will be essential to unlocking consumer spending and driving forward the UK’s economic recovery. The chancellor must keep the situation under review, as we wait to see how the economy responds to reopening.
“The chancellor has taken steps to avoid the business rates cliff edge on 1 April, and the three-month extension will provide essential funding at this challenging time. Beyond this point, relief is capped at only £2m for closed businesses, a tiny fraction of their total liability. Without further funding, it is likely that many ‘non-essential’ retailers will struggle under sluggish consumer demand and high Covid costs. The business rates system remains broken; it is vital that the ongoing business rates review delivers on its promise to reduce the burden on retail which already results in store closures and job losses.
“Restart grants provide a vital injection of funding during this extremely challenging period. No businesses have remained untouched by the pandemic and we welcome this cash to help ‘non-essential’ retailers improve safety measures, build up stocks, and prepare for reopening. However, the chancellor gave no clarity on EU state aid rules - if these continue to apply to grants for closed businesses, then many larger companies, employing hundreds of thousands of people, will miss out on millions of pounds of vital support. We need an immediate amendment to the state aid system which is stopping impacted companies from accessing the grants which were announced today, and earlier this year.
“We hope the loan scheme will play an important role in addressing the cash flow challenges that many firms are facing. But it is vital that the aspirations of the chancellor are met by action from commercial lenders to ensure that this all important finance reaches its destination quickly.
“We welcome the extension of the furlough scheme, which provides retail colleagues with a safety net against unnecessary job losses. This generous scheme will help protect the future of the 600,000 retail employees currently on furlough.”
“We understand the need for increased taxation to restore public finances and cover some of the vital spending on business support. Corporation tax is a fairer way to achieve this as it ensures those with the broadest shoulders take the largest burden. However, increases in corporation tax must go hand in hand with bringing business rates down to a sustainable level and prevents the shuttering of many more local shops. On its own, corporation taxes would just be another tax on an industry that has faced rounds of forced closures, high costs of implementing Covid-safety measures, and the recent scrapping of tax-free shopping. It is vital that the ongoing business rates review meets its objective to reduce the rates burden on retail, which is causing stores to close and jobs to disappear.”
“The additional incentive to take on new apprentices is welcome, but what is most important to the success of such training and the upskilling of our future workforce would be greater flexibility in how firms are able to spend their Apprenticeship Levy funds.”
“The UK retail industry is a global leader in digital innovation and online retail has provided a vital lifeline for many households across the country over the course of this pandemic. Support for businesses to improve digital skills and develop their online offering will boost an already dynamic sector.
“The ‘super deduction’ must include investment in new technology. The UK retail industry’s investment in digital innovation, which is already world-beating, could be further boosted if this is tailored appropriately. This in turn will create more high value jobs and added value for UK plc.”
Simon Geale, senior vice president, Proxima
“The retail sector will have breathed a sigh of relief at the announcement of an extension in the furlough scheme and restart grants to help high streets get back on their feet. Shops may be welcoming back customers in April, but the impact of lockdowns on the bottom line will linger for many months to come.
“Retailers must now begin thinking about how they will use these grants to prepare their facilities to welcome back customers again, and how they can begin bringing their employees back onto the payroll without jeopardising the overall financial health of the business. There are still tough times ahead for the retail sector, but these support measures will provide some welcome relief.”
Michael Harte, managing director, Bridge Cheese
“This was a Budget which probably predicted more pain down the road but it will undoubtedly be broadly welcomed by most small businesses, which include many of our customers in the high street and their suppliers.
“I’ll be interested to understand the detail around the super deduction tax relief for manufacturers who invest. Few will be planning major cash splurges on big investments this year while the wider economy recovers over the pandemic and issues remain with the existing trade agreement with the EU.
“However, we are a sector business which is looking to grow this year and are planning to expand our facility in Telford. So we will be keen to see if that investment will have additional benefits for Bridge Cheese with these new announcements.
“We were very pleased to hear that supporting businesses and jobs was top of the shop in the budget, and that key initiatives introduced last year to help companies through the pandemic will be here to stay for a few more months – like the extension to the furlough scheme, and the VAT cut.
“We also welcomed the news that corporation tax changes will be delayed and new increases to tax on profits will be tapered. As a medium-sized business which is scaling rapidly, it’s important that we are allowed to develop and expand our operations without being punished with a big tax bill for being agile and adapting to the hostile trading conditions caused by Covid and the UK’s EU exit.”
Will Hawkley, global head of hospitality & leisure, KPMG
“Measures announced by the chancellor recognise the devastating impact that the pandemic has had on the hospitality and leisure sector and go some way to supporting operators through the short-term challenges to come, although at the heart of it all they just want to be open and serving customers again.
“Extensions to vital Covid support packages and a freeze on alcohol duty will be welcomed as will access to restart grants of up to £18,000 per premises. The recovery loan scheme - assuming payments can be made speedily – should provide some temporary relief as operators face a long wait until they can reopen. The extension of the 5% VAT rate until 30 September 2021 followed by a 12.5% rate until April 2021 provides the sector with an opportunity to rebuild as it reopens in line with the government’s roadmap.
“The extension of the business rates holiday until the end of June, followed by a two-third discount until the end of March 2022, will give operators in the sector time to catch their breath and re-build their businesses after a difficult year. However, the time bomb of the backlog of rent still remains. This could be a massive issue for pubs and restaurants who need to know when and how this debt will be repaid and could be catastrophic for some operators once government support ends.
“The pandemic has shone a light on some long held issues impacting the hospitality sector, including the rise of online channels, the review of which was not mentioned today. The question of how best to design a new system of taxation for our diverse hospitality and leisure sector is one that requires detailed analysis from the government. The current business rates system has failed to keep up with the pace of change that the sector has faced over decades, but it’s important to get any reform right.
“In addition for the need to address the business rates issue, there is a broader operator versus property owner agenda that needs resolving. The key aim has to be for operators and landlords to work more closely together, with changes such as the introduction of turnover-based rents becoming more commonplace. However, large numbers of rent payments are still not being made, and without a change to the current system, the knock-on effect could see more pubs and restaurants fail, and retail landlords unable to keep up with their financial obligations. This will have much broader term implications for the overall economy.’’
Robert Hayton, UK president of property tax, Altus Group
“The chancellor has struck a decent balance with the roadmap out of restrictions and the overall basket of support. After the three month exemption period, the caps on the value of rates relief available makes the support targeted, a key ask, whilst the lower level of discount once all restrictions are removed, still supports those sectors most impacted by the pandemic in the longer term. Both of those measures together deliver the best value for taxpayers but must be kept under constant review.”
Danni Hewson, financial analyst, AJ Bell
“The chancellor has continually promised to do “whatever it takes” to support businesses and workers through lockdown so it’s come as no surprise that both the furlough and SEIS schemes have been extended, at least for a little while.
“There’s a clear change in focus from getting through to getting out, with a new £5bn scheme for small companies being labelled a ‘restart’ grant, there’s money for the arts and a bid for the 2030 World Cup all optimistically hinting at better days to come.
“But there’s still a long, difficult spring to overcome and optimism that the vaccine rollout will bolster consumer confidence must be translated into quick revenue if more businesses aren’t to fall by the wayside.
“Investors will be monitoring markets carefully over the coming weeks making sure change, however it comes, doesn’t leave them behind.”
Helena Hudson, founder, Real Eating Company
“The combination of the restart grants, VAT reduction and business rates holiday extension is a powerful cash injection into the high street, which small, agile businesses are well-placed to take advantage of.
“Looking ahead, it would be helpful for the government to listen more to the grassroots of hospitality through a dedicated minister for hospitality. Our industry has the potential to harbour the next wave of growth champions but we need collective support to help bring life and energy back to high streets across the UK in the long-term.”
Nigel Jenney, chief executive, Fresh Produce Consortium
“FPC welcomes the extension of measures such as the Job Retention Scheme, grants for High Street businesses and restart grants. It’s good to see the chancellor recognises that there is a long way to go for many businesses to start to recover from the pandemic.
“However, those wholesalers which supply into the hospitality and foodservice sectors will still be reliant on their local authority to dispense available funds to those businesses which it deems need support. This could become a lottery for some businesses rather than a sure-safe means of protecting businesses from going over the cliff edge in the coming weeks.
“Without guaranteed financial support some wholesale fresh produce, flower and plant businesses won’t be there to supply their customers when they want to restock and reopen. We ask all local authorities to be mindful of the wholesale and foodservice fresh produce businesses which supply their restaurants, pubs, hotels, hospitals and schools.
“We also encourage market landlords to support their tenants proactively by influencing their local authorities to prioritise the sector and provide the necessary support consistently.”
Vivienne King, CEO, Shopkeepers’ Campaign
“While I’m pleased the chancellor has recognised the essential need to support bricks and mortar retail with extensions to the business rates holiday, the truth is that business rates relief is no more than a temporary fix for an embattled sector and retail property owners are still denied equivalent relief on empty units which they cannot let - where’s the justice in that?
“It’s clear the business rates system is totally out of step with the current economy. Retail meets around 25% of the bill which with a corporation tax increase takes the total tax bill paid by our high street businesses to even more unsustainable levels. If we want to safeguard the future of our town centres which are the lifeblood of our healthy communities, it is now even more critical we see the fundamental reforms that the chancellor has promised, which include deep cuts to rates from April 2022.”
Martyn Jones, CCO and retail expert, VoCoVo
“These measures will help breathe life back into retail in the short-term but alone it’s not enough. The problem is not an unwillingness to head to the high street, it’s retailers accessing support and delivering the best consumer experience to ensure there is still a high street in years to come.
“Our recent research found that nearly two-thirds of UK shoppers have no plans to stop shopping in-store, which is a positive sign. Additional financial support, regeneration and tax relief are all crucial to level the playing field with online but physical retailers also have distinct advantage – and that’s the unique in-person social experience that shoppers clearly crave.”
Melanie Leech, chief executive, British Property Federation
“The extension of the furlough scheme, £5bn of restart grants and the business rates relief extension will bring many retail, hospitality and leisure businesses back from the cliff edge, providing them with much-needed breathing space as they prepare to re-open their doors to the public.
“Longer-term town centre recovery, however, will require root and branch business rates reform. This can has yet again been kicked down the road, but fixing business rates is fundamental to any ambition that wants our high street businesses to start planning for their futures beyond the next few months.
“The chancellor has provided a significant package of additional support for retail, hospitality and leisure which should give the minority of businesses who have not yet engaged with their property owners a platform to do so.
“With further rates relief and new grants, high streets businesses should be confident in approaching their property owners today to forge an economic partnership in which they can agree how to manage rental debt fairly. Rational property owners will not want to evict – empty properties generate no income and are a blight on our high streets.
“The chancellor has equally ignored calls to abolish empty business rates. It is fundamentally unfair that after having supported businesses so extensively and for so long, property owners are then left footing the business rates bill when stores are left empty. Our tax system must not penalise property owners for having empty stores, when their support has been critical to saving as many businesses and their stores as possible throughout this pandemic.
“Of course despite government and property owner support, stores are still closing. But, with over 16,000 store closures in 2020, charging empty rates takes investment capital from the very stakeholders that want to invest in repurposing and reimagining our high streets.
“The Government needs to unleash the power of the private sector. This is crucial to the success of the levelling up agenda and the reinvigoration of town centres, for unless ministers are prepared to think radically around the mechanisms that will unlock private sector investment, the government’s ambitions will fail.”
James Lowman, chief executive, Association of Convenience Stores
“We strongly welcome the short term measures that the chancellor has announced to avoid a sudden shock in business rates increases for local shops. The upcoming review of business rates will be crucial in shaping our economic recovery from Covid-19. We have long argued for the system to be designed to promote and reward investment. It is therefore encouraging to see the chancellor sharing our focus on promoting investment through his announcement of the new ‘super deduction’.”
Emma McClarkin, chief executive, British Beer & Pub Association
“We welcome the chancellor’s announcement of continued support for the devastated pub sector in the form of additional grants, as well as extensions to the job retention scheme, 5% hospitality VAT rate and business rates holiday.
“The new grants are worth £400 million for pubs and will go some way in helping many of them survive through to the time when they can reopen and operate viably. It is, however, crucial that the government ensures all pubs benefit, including those that are part of a group, by removing the current State Aid cap.
“The extension of the job retention scheme until September will help save thousands of pub jobs. Worth £700 million to our pubs and brewers, it gives the sector time to reopen and rebuild trade before bringing all staff back, which would otherwise be too costly and unviable whilst still facing trading restrictions until end of June.
“It is imperative that the government allows pubs to operate without restrictions as planned from 21 June. This will give them the best chance to get back on their feet and serve their communities.
“Extending the 5% VAT hospitality rate until September and at 12.5% thereafter is most welcome. We calculate it is worth £485 million to pubs. With all pubs having been closed for so long, the lower VAT rate has been of limited benefit so far, tens of thousands of pubs will not benefit from this until they reopen on 17 May at the earliest and then still at reduced capacity. However, wet led pubs will be especially disappointed again that the reduction will not apply to all beverages so they too can benefit from this.
“We campaigned hard for an extension of the business rates holiday and the chancellor announced a 100% cut on rates until June and up to a 66% cut for the following 9 months. This is good news, but the proposed cap will mean many pub businesses will not benefit fully from this. We await to see more detail.
“Having called for a cut in beer duty and being a staunch supporter of the Long Live The Local campaign, a beer duty freeze will be seen as much needed short-term relief for the sector. However, the chancellor has only partially listened to the 500,000 campaign supporters who signed the petition calling for a cut in beer duty. We now hope the government will use the ongoing Alcohol Duty Review to cut beer duty to support our brewers and pubs and level the playing field with other brewing nations. The government must support and promote Britain’s extraordinary pub and brewing sector in the way other governments support their domestic industries.
“Overall, this is a good Budget for pubs and breweries in the short term, reflecting just how vital they are to the social, cultural and economic fabric of our communities.
“However, this is just the start of the journey on the hard road to long-term recovery for our sector. The chancellor has made it clear today he recognises the vital role local pubs play in their communities. Now he must continue that commitment by ensuring Britain’s pubs and breweries are supported in the long term. This should start by extending the VAT cut on hospitality to all drinks until at least the end of the year. We also need a fundamental reform of VAT, business rates and beer duty to ensure that the thousands of pubs and breweries across the UK can thrive and help drive the social and economic recovery we urgently need.”
Dayalan Nayager, managing director, Diageo Great Britain
“We thank the chancellor for providing much-needed stability by freezing alcohol duty. The last year has been incredibly tough and today’s decision, along with other measures to help the trade, gives the industry confidence to meet the ongoing challenges in these critical last months before reopening.
“Commitments such as Diageo’s £30m to help pubs and bars operate safely through our Raising the Bar programme, will give even further assurance. We now look ahead to the Alcohol Duty Review and welcome the opportunity to work with government to bring greater fairness to the duty system and spirits producers across the UK.”
Stuart Reddish, national president, NFRN
“Overall, the Budget is probably as good as we could have hoped for, particularly the assistance with business rates. Although this is not as supportive as in Scotland, where it is 100 per cent for the whole year, it is still welcome and we look forward to a full review of business rates in the autumn.
“The grant scheme to help retailers who have been forced to close to get back on their feet is also good news, as is the decision not to increase duty on fuel.”
Silvia Rindone, UK & Ireland retail partner, EY
“This Budget has brought a range of measures intended to help retailers across the lockdown finish line. The extension of the furlough scheme and the announcement of restart cash grants is welcome news, particularly for non-essential retailers who are dependent on continued support until they can reopen.
“While the hospitality sector has been offered more support, such as higher grant amounts and an extension to the VAT reduction, the retail sector should also consider this a positive, as hospitality’s recovery will help to drive footfall to physical stores.
“Together with the government’s anticipated timeline for exiting lockdown, the sector now has some of the clarity that it needs to be able to plan for recovery. This is a pivotal moment for retailers. To achieve success, they must not only navigate through the roadmap out of lockdown, but make the bold, strategic decisions necessary to position for longer-term growth.
“The chancellor has also answered the sector’s calls for an extension to business rates relief – a much-needed measure given the cashflow challenges many businesses are facing – and avoided a ‘cliff-edge’ by setting discounted rates after the holiday ends. But with the government delaying its business rates consultation report until the autumn, retailers will need to see if there will be the fundamental reform that many in the sector may feel is necessary for the high street’s long-term recovery.”
Chirag Shah, CEO, Nucleus Commercial Finance
“SME owners across the country have been longing for a clear road map out of lockdown. Today’s announcement by the chancellor combined with the recent lockdown exit strategy will provide businesses with a glimmer of hope, and give them the additional lifelines they need to survive.
“With our own research showing that seven in 10 business owners were calling for a furlough extension, today’s announcement comes as welcome news to all. Combine this with an extension of business rates relief, this will provide a significant boost to those in the hospitality and retail sectors.
“These measures will undoubtedly help SMEs in the short-term, but now the government needs to create a long-term environment where businesses can prosper. For too long, businesses, particularly those on the high street, have faced tough measures, including increased rents and high business rates. Looking ahead, we need a system that will reflect the new world we live in, one which supports SMEs and allows them to thrive.”
Adam Sopher, co-founder, Joe & Seph’s
“It’s positive that the budget has increased incentives for hiring trainees. This will have a positive impact on recruitment. Here at Joe & Seph’s, we have used the scheme to hire and train three new people to work across our gourmet popcorn business in our Popcorn HQ.
“I was also really pleased to see an expansion of the Culture Recovery Fund, which will provide financial support to our vital cinema industry. Cinemas are a crucial part of the high street and British culture, so it is crucial that they are protected after the crippling effects of Covid-19.
“At Joe & Seph’s we’re proud to handcraft our gourmet popcorn in our London kitchens. We’re constantly innovating and bringing in new machinery to ensure we can make the most exciting and best tasting popcorn products. Today’s announcement on the Super Deduction investment tax break for businesses therefore looks very positive. We need to see the full details, but it has the potential to allow us to bring forward our innovation pipeline by investing in new machinery sooner, bringing our new products to market quicker than planned.”
John Webber, head of business rates, Colliers
“The chancellor has followed through on expectations that he will extend the current 100% 2020/2021 business rates holiday for the retail, hospitality and leisure sectors for an extra three months to the end of June and then provide an up to two thirds business rates holiday for the following nine months.
“However such moves are not enough. Colliers were calling for businesses in those sectors to have at least a 6 to 12 months full rates holiday, allocated on a needs basis, giving businesses proper time to recover from the impact of the pandemic and lockdowns, particularly given the staggered planned reopenings. In Scotland, a 12 month extension of the rates holiday has already been announced for these sectors.
“The announcement today also gave little to help businesses in other sectors who have not had the advantages of the business rates holiday who have also seen genuine hardship. This would include the aviation industry, businesses in manufacturing (particularly those that supply retail/hospitality and leisure) and many offices businesses.
“The chancellor has failed to do anything about these 350,000 MCC business rates appeals snarling up the system, tackle the business rates multiplier now at outrageous levels of £0.51, commit to a 2023 Rating Revaluation, clarify confusing rules on State Aid limits or bring in a business rates arrears moratorium for those businesses, who because of the pandemic have been unable to pay their business rates bills.
“And to cap it all the chancellor has granted the VOA a sabbatical for 3 months for no apparent reason - bad news for office ratepayers whose 2021/22 bills are being printed as we speak.
“Even the rates holiday for retail, leisure and hospitality is not as simple as it sounds. After the first three months it looks like it is going to be really cumbersome for businesses to apply and up to the already over stretched billing authorities to sort out.
“Whilst we were already disappointed that the chancellor had delayed the business rate review until the autumn, we had hoped there would have been something more to say today. It’s been disappointing that yet again he has failed to grab this opportunity. Only skimming the surface on this issue will have dire consequences for many struggling businesses across the board.”
Ian Wright, chief executive, FDF
“Food and drink manufacturers will welcome today’s Budget. The chancellor’s announcement struck the right balance between supporting recovery and acknowledging the difficult choices that have to be made to restore the country’s finances. Food and drink businesses supplying the hospitality and food service sectors will welcome the extension of the furlough scheme. However, we have concerns that support tapers too soon and should be kept under review.
“As the UK’s largest manufacturing sector, we welcome the news that the Bank of England and the chancellor are doubling incentive payments for businesses hiring apprenticeships. However, increased flexibility of the apprenticeship levy would enable the system to work for the wider food and drink supply chain, particularly SMEs, and must be considered in relation to any new incentives.
“The chancellor rightly expressed his firm intention not to increase the cost of living and has recognised the importance of encouraging investment as the key driver of recovery. He should therefore review proposed regulatory changes that will increase food prices.”