Autumn Budget addresses wages, business rates and alcohol duty

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Chancellor Rishi Sunak confirmed in the Autumn Budget that the National Living Wage will rise to £9.50 from 1 April 2022, representing an increase of 59 pence or 6.6%.

Bryan Sanderson, Low Pay Commission Chair, said: “The pandemic has been an exceptionally difficulty period for businesses and workers alike, but the labour market has recovered strongly and the economy is expected to continue to grow over the next year.”

However, the NFRN has warned that the move will threaten jobs in the sector. National President, Narinder Randhawa, said: “Independent retailers have already been hit hard by the Covid pandemic, with many having to reduce staff levels and hours and take on more of the work themselves. This increase to the national minimum wage will only make matters worse.

“At a time when small businesses need help and support more than ever, this move by the government feels like a kick in the teeth for those that are already struggling to survive.”

Sunak also pledged to make business rates fairer, with more frequent revaluations from 2023. He said the government will introduce tax relief for businesses who adopt green technologies, such as solar panels, and for those who want to improve their properties.

In addition, businesses in the retail, hospitality and leisure sectors – which have been hardest hit by the pandemic – will get a new 50% business rates discount, lasting for one year. Any eligible business can claim a discount on their bills of 50%, up to a maximum of £110,000.

ACS Chief Executive, James Lowman, said: “It was great to see the chancellor announce action to incentivise investment through the business rates system, something we have been calling for in our discussions with Ministers for many years. The 50% relief on 2022/23 business rates is a significant step towards our recommendation for a full exemption for premises under £51,000 rateable value. While these measures are welcome in the short term, they must be supported by long term reform of the business rates system that ensures that retailers can focus on driving growth, efficiency and productivity. Convenience stores have kept Britain going through the pandemic and are at the heart of our recovery and future growth.”

The Chancellor said the UK will carry out the “most radical simplification of alcohol duty” for more than 100 years. He said there will be just six duty rates on alcohol, which will mean that some stronger spirits and wines will become more expensive, but weaker alcohols like beer and rosé will become cheaper. Duty is also being cut on fruit ciders to bring it in line with apple ciders, he said.

Lowman said: “On one hand, the chancellor is implementing reform of duty rates to make the system simpler, but on the other, the new ‘draught relief’ will make the system more confusing. As the line between on-trade and off-trade becomes increasingly blurred, duty should be applied at the highest point of the supply chain.”

In addition, he revealed that the price of a pint will fall by 3p and the planned increase of duty on spirits will be cancelled.

In response, Karen Betts, Chief Executive of the Scotch Whisky Association, said: “By freezing duty, the chancellor has given welcome relief to all distillers, specifically in Scotland where 92% of all UK spirits are produced or bottled. It’s confirmation that the UK government wants to support one of Scotland’s most important industries and will take action to protect jobs, investment and exports, and to bolster the recovery in hospitality and tourism.”

Wine Drinkers UK added: “We welcome the cancellation of the planned increased in all alcohol duty and the government’s long overdue decision to abandon the ‘super-tax’ on sparkling wines.

“On the proposed wider reform of the alcohol duty we await clarification from HM Treasury in the coming days. We hope this will put a stop to the historic unfairness of favouring one drink over another.”

Sunak said the Budget funds the government’s ambition to have 20,000 new police officers and provides an extra £2.2bn for courts and rehabilitation services. It will also spend £3.8bn for the “biggest prison-building programme in a generation”. The Budget also includes an extra £435m for more CCTV and streetlights.

The chancellor said the planned rise in fuel duty will be cancelled because, with fuel prices at the highest level in eight years, he is “not prepared to add to the squeeze on families and small businesses”.

Randhawa said: “With petrol and diesel prices at an all-time high, the cancellation of a planned increase on fuel duty will come as a relief to those retailers who provide home delivery services – something that has increased markedly since the start of the Covid pandemic.”

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