Convenience retailers in England face a mixed picture from Chancellor John Healey’s Autumn Budget announced today (Oct 28), with a higher business rates relief threshold offering potential savings, but a 3.9 per cent increase in the National Living Wage adding to staffing costs.
Healey also extended the 5p-a-litre fuel duty cut until July, providing continued support for retailers and households facing high fuel prices.
Raising the business rates relief threshold will take 70,000 more businesses out of paying business rates altogether. The Chancellor said that the Government had already cut 20 per cent of business rates from pubs, clubs and music venues from April next year.
Vape shops will be excluded from business rate reliefs.
Healey told the Commons: “I’m increasing the threshold for Small Business Rate Relief for retail hospitality and leisure businesses from £12,000 to £18,000.
“That means, for 70,000 more businesses I’m not just cutting their rates, I’m taking them out of paying business rates altogether, meaning half of our shops, restaurants and gyms will now pay no business rates at all.
“For all other businesses in these sectors, I will freeze their rates in real terms so that none face an above-inflation rise for two years.”
Delivering his maiden speech, Chancellor vowed to give households “breathing space” from the rising cost of living.
“It’s a Budget for business, big and small, delivered at a time when global uncertainties and pressures are swirling worldwide and hitting people here in Britain," he said. “A Budget built on fiscal discipline, which matches immediate action today, with clear direction for the future.”
The Chancellor extended the 5p-a-litre fuel duty cut through to July, citing continued pressure on petrol and diesel prices amid the conflict in the Middle East. The extension follows the Government’s earlier decision to maintain the temporary reduction.
Rachel Reeves, Mr Healey’s predecessor, had planned to raise the tax by 5p a litre. However, she changed position in the wake of the conflict in the Middle East.
Healey said: “For millions of people, the cost of living and the cost of doing business are the same. The home is the office. The van is the family car.
“Earlier this year, the Government extended the 5p cut to fuel duty and slashed red diesel to its lowest rate in over 20 years, With the war in the Middle East still driving high fuel prices, I am extending these tax cuts for motorists through the winter and spring to July.”
On wages, the National Living Wage will rise by 3.9 per cent, taking it above £13 an hour for the first time. The increase is expected to add to costs for businesses employing staff on the minimum rate. The increase represents a fresh headache for businesses already struggling to cope with rising operating costs.
Healey has claimed that Britain is “defying expectations” under a Labour Government.
The Chancellor pointed to forecasts that the UK economy would slow down in the face of global economic shocks including the war in Iran.
“Those predictions of gloom were about as accurate as some of the predictions of who was going to be Chancellor,” Mr Healey joked.
He continued: “Britain is defying expectations, In the first half of this year, our economy was the fastest growing in the G7, alongside the US. That is testament to the British people – the innovators, the business leaders, and the workers on the front line.
“And it’s testament to the Labour decisions taken over the last two years. Government investment, up. Business investment up. Productivity, up. And real wages, up, more since the election than in the first ten years of the previous Conservative government.... I will never be complacent, but these are signs of resilience in the UK economy.”