The Spring budget brought no relief for retailers yesterday, instead underlining the difficulties they will face over the next few years.
Retailers face the biggest shake-up in the business rates system for almost a decade, with rises due to hit retailers already dealing with increased costs, many of them caused by Brexit.
The Budget will not bring any change in policy considering the outcry and media coverage. Considering the £30 billion revenue business rates generated, there was no reversal, just a few oddments that will no doubt involve a lot of administration to gain any return, including:
• £435m in further support for firms affected by increases in business rates, and
• £300m discretionary hardship fund for small businesses worst affected.
Helen Dickinson, chief executive of the BRC, said: “Any review needs to incorporate business tax in its entirety and not be constrained by the technicality of fiscal neutrality around business rates.
“We hope that the relief measures will help some of those businesses hardest hit by the revaluation, albeit only temporarily. However, more short-term relief measures continue to add complexity to an already impenetrable system.”
“£435m is a drop in the ocean compared with the £25bn a year that the tax raises. This is yet another sticking plaster on a chronically ill patient – an unsustainable property tax higher here than anywhere in the developed world.”
Apart from this the Budget, with its forecasts from the Office of Budget Responsibility (OBR), only underlines how it is going to become even more difficult to get consumers to spend money while we negotiate Brexit.
Though the OBR forecasts stronger GDP growth for 2017 (2%), it expects this to slowdown in 2018 and 2019 and predicts higher price inflation.