17th October 2021
Today’s budget statement may have raised an eyebrow or two across the Country. Although many initiatives had been trailed across the media, much to the Speaker’s ire, there was still a sense of questioning as to why we were getting a £150 billion giveaway, when we had just been through a pandemic lockdown costing just south of £400 billion.
The answer is simply paying that enormous sum back over the long term on low interest rates is not nearly as impactful on yearly horizons as we may think, and with economic growth and forecast growth way ahead of expectations, the Chancellor was in the very happy position to hand out some sweeties.
I will not go into all the detail on the budget. If anyone wants the detailed summary please drop me a line, but below are a few key announcements relevant to our business.
- As a top-line we did get something we argued for in our budget submission and lobbying, namely an extension of business rates relief for the Retail, Leisure and Hospitality Sector, albeit at 50% rather than the 100% requested. We still have yet to see or the detail, but if confirmed, this is a major win for members and will really help cement the recovery. This is up to a cap of £110K.
- Also on rates, every business will from 2023 be able to make property improvements without paying extra rates for 12 months.
- Also good news was that gaming duties will rise with inflation. No one likes an increase of course, but the temptation to introduce above inflation increases most have been achingly tempting.
- National Living Wage – The Chancellor announced that on 1 April 2022 the National Living Wage (NLW) will rise by 6.6% to £9.50 an hour.
- National Minimum Wage – The government is also increasing the National Minimum Wages, for young people
- Alcohol Duties – Planned increases in alcohol duty cancelled, duty will remain frozen for the second year in a row, with duty rates on draft beer and cider being cut by 5%.
- Kickstart scheme – funding to extend the Kickstart scheme to March 2022, which has supported nearly 95,000 young people to date, and investing over £60 million over the next three years in the Youth Offer, which helps young jobseekers gain new skills, build their confidence and find lasting work.
- Apprenticeships – The government is increasing apprenticeships funding to £2.7 billion by 2024-25 – the first increase since 2019-20.
- Apprentice hiring incentive – Government will also be extending the £3,000 apprentice hiring incentive for employers until 31 January 2022).
- Retraining – The government will increase skills spending by 26% over this Parliament including an increase in apprenticeships funding, expanding the Lifetime Skills Guarantee on free Level 3 qualifications.
The Chancellor also spoke a lot about ‘Levelling Up.’ This is one of the key government themes and will be so through to the next election, and incidentally one with which our industry can very constructively chime. Most of the money flowing from this political ambition was for some big funds and initiatives, but one did catch my eye as potentially of value for AGCs. The High Street Heritage Action Zone programme – provides funds to regenerate historic town centres (and has existed in a slightly different form for a couple of years).
A couple of other things I noted:
- High-Skilled Migration – The government is implementing changes to the UK’s immigration system to attract highly-skilled people to the UK. This includes a new Scale-up Visa, launching in spring 2022, that will help the UK’s fastest-growing businesses to access overseas talent. The visa will be open to applicants who pass the language proficiency requirement and have a high-skilled job offer from an eligible business with a salary of at least £33,000.
- Fuel duty will remain frozen (it was due to go up).
I would be very interested in members reaction to the budget so I can feed this into the inevitable questions we will be asked by Government.