The PRA has welcomed some aspects of the mini Budget delivered today, but warned it may not be enough to offset the harm caused to the forecourt sector by rising energy prices.
Measures announced by chancellor Kwasi Kwarteng in today’s mini-Budget include:
- 40 new investment zones, providing targeted tax reliefs for new businesses;
- the April 2022 rise in employee and employer National Insurance rates will be reversed;
- corporation tax rates will be frozen at 19%;
- the Annual Investment Allowance will be permanently set at £1m from April 2023;
- beer, cider, wine and spirit duties will be frozen at their current levels from February 2023;
- reducing the basic rate of income tax to 19% from April 2023.
PRA executive director Gordon Balmer said: “Our members are extremely worried about soaring energy costs. While we are encouraged by the government’s recognition of this issue through the Energy Bill Relief Scheme, we are concerned that it will not be enough to mitigate the long-term effects of price increases.
“I would urge the government to extend the six months of support to a year for forecourts as they are essential to the functioning of the UK’s economy. This will give relief to our members and lower the chances of forecourts closures, which could be devastating for many communities who rely on the fuel and food they supply.”
He suggested there should be an option to renew the measure for an additional year, and added: “By extending relief, the Government can ensure fuel resilience and give the energy market time to stabilise.”
Balmer welcomed some of the measures announced by the chancellor. He said: “The reversal of the National Insurance contribution and the corporation tax hike are welcomed by the PRA. This will help our members during these critical times. A few days ago, PRA wrote to the Chancellor of the Exchequer urging government’s intervention to support forecourts businesses.”
In a further move to grow the economy, the Chancellor announced plans to accelerate building of new roads and rail. Balmer commented: “The promise to accelerate infrastructure projects is applauded by the PRA. Forecourts around the UK will benefit from an upgraded road system, and it will help deliver a high-growth economy in the future.’
He concluded “We are however deeply disappointed in the government’s failure to address the business rate relief that is due to expire in April 2023. The rising bills had a huge impact on businesses and the discount has been of crucial support for our members. The PRA will continue engaging in dialogue with the government to ensure that support for petrol filling stations continues.”
The Association of Convenience Stores (ACS) welcomed the chancellor’s measures to stimulate growth and cut taxes in the short term, but called for longer-term support on energy costs.
ACS chief executive James Lowman said: “We welcome that the government’s plan aims to stimulate growth and incentivise investment by businesses. In the last 12 months local shops have invested £605m in improving services, making their businesses more sustainable, and creating secure local jobs.”
However, he too highlighted the issue of energy costs. He said: “The biggest issue facing local shops in recent months has been the cost of energy. The support being provided in the coming six months will act as a lifeline for thousands of businesses, but the government must continue to support local shops in 2023, especially the most vulnerable facing difficult decisions in the spring.”
However, Howard Cox of FairFuelUK described it as a very disappointing mini-Budget for the UK’s 37 million drivers and the logistics industry.
He said: “Liz Truss and Kwasi Kwarteng should hang their fiscal heads in shame for not cutting fuel duty. Frankly this is the economics of an asylum. Their ignorance is jaw dropping.
“Low-income families, small businesses and the economy will continue to be crippled by high pump prices, punitive fuel duty levels and opportunistic profiteering in the fuel supply chain. Neither have been addressed by this continuing atypical Tory administration.
“I am disgusted that yet again drivers are being used as the Government’s cash cows. No promise of keeping Rishi Sunak’s 5p cut in duty and not matching the significant fuel duty cuts across Europe.
“It seems the Prime Minister is to continue Boris Johnson’s anti-driver policies and grass root voters who rely on their vehicles to survive.
“Net Zero will bankrupt the UK and the nation’s drivers will remail one of the highest taxed in the world on the back of a virtual signalling green ideal.
“No reduction in fuel duty means the economic trend growth aspiration of 2.5% per year is unlikely to be hit. It can’t be achieved without lower business costs. One of the largest is the price of transportation that significantly impacts on inflation and the cost-of-living crisis for all of us.
“Cutting the cap on bankers’ bonuses may attract more financial companies and investment in the UK. But cutting the costs of transport will attract manufacturers and other businesses to work from the UK, too. It really is a no brainer. Why has the government failed to recognise that for decades and is continuing to do so?
“Inflation fell by 0.3% last month. The reason for this welcome drop, despite food prices still climbing, is almost entirely due to a 10ppl fall in pump prices in August.
“Making a big cut in fuel duty would drive inflation down immediately and it could have been done by using the extra £3bn in VAT the government has received from recent very high pump prices. It would have reduced the huge burden on families and businesses and also boosted tax revenue to the Exchequer from the growth in the economy that would have come as a result.”
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