As he tried to repair the damage caused (at least in part) by the ‘kamikaze’ Truss mini-budget, chancellor Jeremy Hunt was keen to look like a man with a viable plan in today’s autumn statement.
Unlike short-lived predecessor Kwasi Kwarteng, Hunt was able to call on Office for Budget Responsibility (OBR) figures to support much of what he had to announce today, rather than the back of a cigarette packet.
Also unlike Kwarteng, the chancellor managed to confront some of the areas that really mattered to the food and drink industry – not least in the £13.6bn package of support to help stop an already embattled high street being flattened by disastrous business rates increases.
While confirming next April’s revaluation will go ahead, Hunt revealed the business rates multiplier will be frozen at its current level in 2023-24. This measure, plus the business relief for 230,000 retail and hospitality businesses, has been warmly welcomed.
“The announcements today show the government has heard the concerns of the retail industry,” said BRC CEO Helen Dickinson.
A similar note of optimism came from James Lowman, CEO of the ACS, who said the package of business rates measures “meets our asks to the chancellor”.
Even UK Hospitality boss Kate Nicholls described the plans as a “relief” in a rare outburst of optimism from the ravaged sector.
Yet elsewhere, there remains huge uncertainty for the industry, despite the chancellor’s best efforts to stabilise matters. There are particular questions about how the government will tackle the energy bills crisis, which threatens to pose perhaps an even bigger threat to survival than business rates, as we enter what the government officially admits is a full-blown recession.
As figures from the FDF show soaring energy prices now account for almost a quarter of the average food and drink supplier’s costs – while retailers are feeling a similar burden – this is a ticking timebomb that threatens to ruin Christmas for many a company.
Hunt today promised we will find out which businesses will receive further support from its Energy Bill Relief Scheme, which runs out in April, by the end of the year. But few are holding their breath. While the terms of reference for the government’s review are short on detail, they already make for grim reading.
Whilst acknowledging businesses “highly exposed” to energy prices may require additional support beyond the April cut-off, it confirms expectations that the support will be “significantly lower and targeted at those most affected to ensure fiscal sustainability”.
“Businesses should use the significant support provided over the initial six months of the scheme to identify measures that protect themselves from the impact of high energy costs,” the document states. Sadly, for many that is mission impossible. The suggestion might as well come with instructions that ‘this tape will self-destruct after five seconds’.
Of course, if anyone should recognise the challenges of rescuing a lost cause, it’s the new Tory chancellor. Rather than his words today, it will be his actions in the weeks and months ahead that prove whether he really is listening to industry – and whether those figures he is so keen on give him scope to offer the required help.
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