The coaltion government today published its emergency Budget, unveiling a series of measures to scale back the deficit. You can read about what it means for our industry here.

Reaction to the 2010 emergency Budget

“The NFRN is very aware of the position that UK PLC finds itself in today and was bracing itself for an austere package of reforms. Whilst the Chancellors` announcement was hard hitting, newsagents will experience different levels of impact on their businesses especially depending on their locality in relation to where the cuts and taxes fall.

"To what degree this will affect consumer spending we will have to monitor closely. The NFRN will continue to improve its support of independent newsagents, and in turn retailers everywhere should look again and raise their game to ensure that customers choose them ahead of the competition.”
Stefan Wojciechowski, head of news, magazines & public affairs, National Federation of Retail Newsagents

“The measures announced in the Emergency Budget will go a long way to reducing the deficit and will please the 93% of FSB members who called for a clear plan on tackling the country’s debt. The increase in VAT to 20% will, however, hurt small firms who will have to pass the increase on to their customers, unlike big business which can absorb the cost.

“We welcome moves to give a National Insurance holiday to start-up firms [but] need to see a full reversal of NICs increases to fully offset the ‘tax on jobs’ the previous administration initiated.”
John Walker, chairman, Federation of Small Businesses

“Local shops welcome the decision to reduce corporation and small business taxation, and the increase in the thresholds for employer national insurance contributions. These tax reductions will leave retailers better equipped to deal with the challenge of economic recovery, and will stimulate new employment in the sector."
James Lowman, ACS chief executive


“We recognise that this is a tough budget addressing serious issues. No one welcomes spending cuts or tax increases for their own sake. But we are relieved that the chancellor has confirmed that most foods will continue to be zero-rated for the life of this Parliament.

"We had argued against ending existing zero ratings as such a move would disproportionately impact the poorest in society, dampen consumer spending and fuel inflation – and are pleased that he has listened to our arguments."
Melanie Leech, FDF director general 

“We didn’t want a VAT increase. It’ll hit jobs, consumer spending, the pace of recovery and add to inflation but we accept the Government has no easy options. It’s some consolation that the range of VATable products isn’t being extended.

“Changing computer systems and shelf prices on tens of thousands of products is a huge, costly exercise for retailers. Planning for catalogues is a particular nightmare. The start date, in the middle of the busy and crucial post-Christmas sales period, will be difficult but retailers would rather have more notice than less. Six months to prepare is better than the rise coming-in this summer.

“Retailers will work hard to implement the increase smoothly but there must be a light-touch to enforcement at the time of introduction.”
Stephen Robertson, British Retail Consortium director general

“The much-expected rise in VAT may be the least bad option for increasing tax revenue but it does present a risk to local shops. It is a great relief the Chancellor has listened to us and not extended VAT into areas like food and newspapers.

“The delay allows retailers time to sell through products with price marks and avoids the previous error of introducing the change on the 1 January.”
James Lowman, ACS chief executive

"Many retailers have predicted this VAT increase and built it into their autumn deliveries with higher prices, while keeping stock levels tight because of the prospect of reduced demand; both measures set to boost inflation. The good news is that it has not been applied beyond existing categories.

"Consumers are already being far more considered with their purchasing as they face the prospect of job cuts, reduced pensions, a continuing difficult housing market and greater general austerity.  The benefit of a higher tax threshold for those on low incomes will be offset by the increase in VAT.

"The knock-on effect will be to reduce demand further and hit retailers’ profits, raising the prospect of further casualties in the sector. This in turn will hit employment in the retail sector, impacting the young, women and the low paid the most."
Maureen Hinton, analyst and practice leader, Verdict

On alcohol duty

“We offer a cautious welcome to this Budget if it signals the intention to introduce stability and sanity on duty rates. After successive increases in duty this news offers some respite, but it only adds to the chaotic approach to duty if next time rates go up again.

“The cider industry has a very long investment cycle. We need stability in order to plan and manage our businesses. For government, of whatever persuasion, to keep moving duty rates means very considerable disruption and a lack of certainty that undermines everything we do."

“Yet we have the recent history to show that stability on duty and policy creates a virtuous circle that means everyone wins. If this government promises us a sensible and stable duty regime we promise to do everything we can to grow our industry, invest further and make a greater contribution to help close the budget deficit.”
Henry Chevallier, chair of the National Association of Cider Makers

“Retailers have already seen significant duty increases this year, and the rates in the UK are still some of the highest in Europe. It is therefore a relief that the chancellor seeks to make no further rise."
James Lowman, ACS chief executive

“Supply and price are not the only factors that influence binge drinking; consumer’s demand for alcohol and our culture’s acceptability of drunkenness are key issues to be dealt with.
“Alcohol misuse costs the NHS in England £2.7bn per year and the financial, social, physical and emotional impact of alcohol misuse is felt by everyone in society. We need to tackle the problem head-on and through a coordinated effort."
Chris Sorek, Drinkaware chief executive

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