Wholesalers’ body reacts over ‘little support’ given to sector in Autumn Statement

Wholesalers’ body Federation of Wholesalers and Distributors (FWD) gave a lukewarm welcome to Autumn Statement unveiled today (22), saying “little support” has been made available for wholesale sector which is tasked with keeping the nation fed.

The Chancellor of the Exchequer Jeremy Hunt has today (22) delivered his Autumn Statement in the House of Commons, where he unveiled the government’s latest tax and spending plans.

A series of measures have been announced to boost business investment, including the extension of the 75 per cent rates discount and the freezing of the small business rates multiplier.  

While the Autumn Statement has been drawing mixed responses from retail industry, wholesalers gave lukewarm welcome to Hunt’s offerings.

“With inflation at 4.6 per cent and food price inflation at 10.1 per cent, little support has been made available for a vital sector which is tasked with keeping the nation fed,” James Bielby CEO FWD said.

On the eve of delivering a mid-year budget, Hunt  announced that  Britain’s minimum wage will increase by 9.8 per cent to 11.44 pounds an hour from April 2024, making it one of the highest as a share of average earnings of any advanced economy.

FWD stated that due to the increase, wholesalers will need to “find space within budgets”.

“Against the context of increasing costs in every single discipline and no further financial support from the Treasury, wholesalers will need to find space within budgets to contend with the single biggest rise in the National Living Wage. FWD support paying vital workers in the wholesale space fairly, but against the incredibly tough economic backdrop, and with no support from Government, this is a very challenging requirement,” Bielby stated.

“By requiring the public sector to operate within the constraints of the Autumn Statement, this essentially means that inflation will need to be absorbed. This will result in reduced budgets for public sector food, which will be to the detriment of both wholesalers and the vulnerable people being fed in education, hospital, and care settings.

“Wholesalers are struggling in the here and now, and public sector budgets should be adjusted to account for this. Whilst we welcome the re-commitment to increase the education budget, this will not come into effect until 2024-25. Wholesalers are struggling in the here and now, and public sector budgets should be adjusted to account for this.”

FWD has welcomed further business rates support for organisations across hospitality, retail, and leisure settings, though Bielby stated that it is unclear whether the wholesale sector will be eligible for support.

“There is no retail, hospitality, or leisure without supply from wholesale, and yet the Treasury seems unable to grasp the full value of our sector.”

Additionally, the government has frozen all alcohol duty until August 2024.

FWD, whose members are large alcohol and tobacco excise duty payers, both directly and indirectly, has welcomed the freeze in alcohol duty until August 1 2024, saying this freeze is essential to combat rising inflation and the cost-of-living crisis.

“However, increases in duty rates, as we will see for hand tolling tobacco, will have implications for the illicit market and its knock-on effects for revenue lost by the Exchequer, undermining public health and legitimate business objectives. The government should focus resources on enforcement activity to remove criminals from trading in illicit and non-duty paid goods,” Bielby stated.

Bielby further appreciated the government’s commitment to advancing apprenticeships by earmarking £50 million to stimulate training in growth sectors and overcome barriers to entry in high-value apprenticeships. 

“While we welcome this investment, it’s imperative that the Government addresses the challenges associated with the current apprenticeship levy. Our members contribute hundreds of millions of pounds into the apprenticeship pot but since the levy only allows funds to be spent in an overly restricted way, wholesalers cannot use the money to fund any relevant courses – effectively rendering it a tax on businesses.

“To encourage greater investment in skills and training businesses need increased flexibility in allocating funds to train staff. Expanding the apprenticeship levy into a wider skills levy will give businesses more flexibility to allocate the money to train staff and will bring significant benefits to the wholesale sector.”

FWD also welcomed the announcements to allocate £4.5 billion to bolster British manufacturers on their path to net zero, saying that the diverse funding package will be instrumental in supporting the decarbonisation of businesses nationwide, particularly the targeted support for the automotive industry and the zero-emission automotive transition.

“While we are grateful for the support provided, it’s evident that we need a more comprehensive approach which considers infrastructure, skills and provides long-term clarity to business through well-defined roadmaps and strategies. With this, we look forward to reading the outcome of the Winser Review, recognising the potential to deliver the critical grid upgrades needed for the decarbonisation of our economy. The commitment of FWD and its members to achieving net zero targets by 2040 remains resolute; nevertheless, realising this ambitious goal requires stronger and more strategic support from the government,” he concluded.