The March 2016 Budget is likely to be remembered by the general public for what ended up not happening, notably the review of benefits to the disabled. It may also be remembered for the announcement of the levy on companies selling sugary drinks.
I may be a cynic, but I think George Osborne identified this measure as an elaborate distraction for missing his growth and borrowing targets. And we should see it for what it is. Rather than the holistic obesity strategy promised, this is a stunt, and the industry is now going to have to work hard to get the government to go back to first principles: what are they trying to achieve in terms of public health and consumer behaviour, and is this an effective way to do it? These discussions are much better held as part of a consultation and whatever anyone’s views on the levy itself, this is unarguably a mess of a policy.
It’s also a shame that the Chancellor’s mis-direction tactics took attention away from some very good announcements on business rates. The increase in the threshold for 100% rate relief for businesses with a £12,000 rateable value, and the extension of the small business multiplier to businesses up to £51,000 rateable value, will bring significant cost savings for independent local shops. But, for most forecourts, the £12,000 threshold is too low to be of benefit, and many will be above the £51,000 threshold. What the forecourt sector needed was a re-think of the scheme that means much higher rates’ bills for forecourts than for comparable shops. This isn’t the only sector that gets special treatment, and the system is a result of poor availability of data on forecourt rents a problem that doesn’t exist for high street shops but does for pubs. A review of all these schemes was and is still needed, including looking at sectors that don’t currently have schemes, but where they could be used to make the rating system fairer.
This Budget needs to mark the start of a new chapter in the story of business rates’ policy, not the end. There is so much more work to do if we want to see a fairer system. The industry and the Treasury need to make time for this debate, and we shouldn’t be facing the needless distraction of the levy on sugary drinks’ manufacturers at such a crucial time for the UK economy.