Following Chancellor Rishi Sunak’s budget announcement on 11 March 2020, business owners up and down the country can breathe a sigh of relief. Amidst promises to support businesses during the current coronavirus (COVID-19) uncertainty, the Chancellor also announced long-term changes to help future growth. These measures included relief from business rates and freezing duties on alcohol and fuel.
At Regency Purchasing Group, we’ve been considering how the Chancellor’s budget will benefit the 3,000+ businesses that we support and source produce for from various markets, locally, regionally, nationally and internationally.
A small sense of relief
The budget has certainly been well received by many. There are many positive points that we, and our members, can take from it. From the pressing issue of coronavirus to business rates for the leisure and hospitality industry, the budget covered a wide range of important issues and business owners can almost certainly come away from it with a small sense of relief as a result.
Tackling the impact of coronavirus
For businesses across the UK, the outbreak of coronavirus has been a rapidly growing cause for concern. Although there remains uncertainty about what government measures will be taken over the coming weeks, the Chancellor’s budget took steps to provide some certainty for business owners and employees in the present. The Chancellor’s promises that statutory sick pay will begin from day one, rather than day four, for those asked to self-isolate and that firms with fewer than 250 staff will be refunded for these sick pay payments, can be welcomed as clear messages of support and action from the government.
Business rates and National Insurance contributions
However, we’re keenly aware that coronavirus is not the only issue in the current economic climate: Even before coronavirus, a large proportion of businesses were struggling. Increasing wage costs due to changes to minimum wage, pension contribution and rising cost of product, meant margins were being squeezed. In the worst cases, this was forcing businesses to close.
The new measure on the removal of business rates to leisure and hospitality businesses with rateable values under £51,000 is very welcome news and will certainly create some well needed breathing space for those struggling. Similarly, raising the threshold for National Insurance Contributions will increase consumers’ disposable income, which will have a positive, knock-on effect for the leisure, hospitality and retail markets.
Continued freeze on duties for 10th consecutive year
In addition to the headline measures, the Chancellor announced a series of further changes that will be welcomed by business owners in leisure and hospitality. The freeze on duties on spirits, beer, cider and wine means that landlords and business owners won’t have to make the difficult decision of whether to absorb an increased cost or pass it on to their customers. Similarly, the announcement that fuel duty will remain frozen for the 10th consecutive year is a relief to wholesalers supplying produce to the industry, who have had to navigate this cost in the past.
Supporting the farming industry
A final show of support from the government went to the farming industry, who will continue to benefit from red diesel fuel subsidies. Over the past year, there has been a growing feeling that the UK should be more self-sufficient in the production of its own food, initially prompted by the potential difficulties of trade after Brexit and the carbon footprint that comes with importing food. Now, with the potential impact that coronavirus may have on supply and travel, it is abundantly clear that the more we support our farmers and the more we can produce in the UK, the stronger and more sustainable we will be.