BUDGET: ACS welcomes investment incentives

The Association of Convenience Stores has welcomed the Chancellor’s action to support businesses through green investment incentives.

In his Budget speech to Parliament today, Chancellor Rishi Sunak MP announced that green investments such as solar panels and heat pumps would be exempt from business rates. Additionally, investment in improvements to businesses will not be subject to business rates for 12 months after that investment is made. Subject to confirming eligibility, local shops will also benefit from a 50% reduction in their rates bills for 2022/23.

On business rates incentives, 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 also announced widespread changes to the duty rates system, reducing the total number of alcohol duty rates from 15 to six in an attempt to simplify the system. However, the Chancellor is also introducing a new 5% ‘draught relief’ on draught beer and cider sold in the on-trade.

On alcohol duty rates, 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. We urge the Government to focus on tackling the billions of pounds worth of non-duty paid alcohol that is damaging responsible retail businesses and the communities that they serve.”

In April 2022, the National Living Wage will rise to £9.50 per hour for staff aged 23 and over, with the National Minimum Wage rising to £9.18 per hour. This is in line with the Government’s existing policy ambitions to raise the National Living Wage to two thirds of median earnings by 2024.

On National Living Wage increases, Lowman said: “The increase in the National Living Wage to £9.50 is in line with the established policy of this rate equalling two-thirds of median earnings by 2024. This will bring a pay rise for many of the 392,000 people working in local shops, but significantly increase the costs of those running these stores, who are working longer and longer hours to keep their businesses afloat.

“We now need to see an Employment Bill to tackle the burgeoning shadow labour market based on avoiding paying the National Living Wage and other costs, using gig economy practices to undercut the flexible and secure work offered by local shops.”

Meanwhile, the Federation of Independent Retailers (NFRN) says the spending review in Chancellor Rishi Sunak’s autumn Budget represented a double-edged sword for smaller businesses.

While pleased to learn the Chancellor has introduced a 50% discount on business rates for independent retailers, and scrapped the planned increase on fuel duty, it believes the increase in the national minimum wage from £8.91 to £9.50 an hour will undoubtedly have a serious detrimental effect on retailers’ ability to employ and retain staff.

NFRN National President Narinder Randhawa, said: “In an ideal world, we would all like to pay our staff more, and we can understand the Chancellor’s desire to help people at the lower end of the pay scale. But the headline increase in the wage rate does not include the increase in National Insurance and pension contributions, as well as the forthcoming social care levy, that employers also have to pay.

“Rather than boosting many shop workers’ incomes, the increase in the minimum wage will have the opposite effect of threatening jobs in the sector.

“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 and the inevitable knock-on effects will only make matters worse.”

“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 and the inevitable knock-on effects will only make matters worse.

“While we broadly welcome the decision to freeze business rates and offer a 50 per cent discount for one year, we will continue to push for long-term reforms to make the system fairer for the independent retail sector.