As businesses wait for Rishi Sunak-led government’s first Spring statement, vehement calls are being raised to restore high streets, ease running costs, boost consumer confidence and create a business-friendly environment in the country.
On March 15, Chancellor of the Exchequer Jeremy Hunt will deliver his first Spring Budget. Insiders claim that Hunt has warned not to expect any major tax cuts in his March Budget. In a recent public interview, he also insisted the "best tax cut right now is a cut in inflation", arguing that reducing inflation was the "only sustainable way to restore industrial harmony" in Britain.
Sunak too, though has stressed his desire to cut taxes earlier, has warned voters they would have to wait due to after effects ofCovid-19 crisis and Russia’s current invasion of Ukraine.
As cost-of-living crisis continues to squeeze shoppers’ spending, retailers are also facing a series of other problems like high energy costs, fluctuating supply on some lines, hikes of food prices, squeeze of margin and staff shortage. Not to forget the lower footfalls in general.
No wonder, retailers have been keeping their wish list ready ahead of the Hunt’s budget announcement. The intention is to boost spend, restore consumer confidence, bring back footfall and ease costs of running business.
Bring back VAT-free shopping
World famous British fashion brand Mulberry recently announced the closure of its Bond Street, London store, saying high-end retail in London was becoming “unviable” after demise of VAT-free shopping.
Known as Tax Free for Tourists, the £1.3 billion scheme was part of the short-lived mini-Budget drawn by Liz Truss’s government during its turbulent 49 days in Downing Street.
When Hunt took over the reins, he reversed the decision as part of wider measures designed to soothe fears on international financial markets about the UK’s economy. He is due to outline his next set of tax in March and is rumored to bring back return of the rebate.
The move does not much affect grocery retail directly but it does impact overall footfall and general sentiment in high streets.
BIRA CEO Andrew Goodacre
BIRA CEO Andrew Goodacre calls the decision to remove the VAT exemption for visitors as “completely flawed”.
“I think we are no longer competitive as a tourist destination compared to others places in Europe. Visitors know they can buy the same product, possibly in Paris or Milan or anywhere else in Europeway cheaper,” Goodacre tells Asian Trader.
British Retail Consortium (BRC) is also calling to reconsider VAT exemptions.
Helen Dickinson OBE, chief executive of BRC, states that offering tax-free shopping for tourists would help strengthen the UK’s position as a top destination for international shoppers.
“As it stands, the UK is one of the only European countries not to provide a tax-free shopping scheme to encourage tourism, which is why we’re asking the government to look again at reinstating it,” Dickinson tells Asian Trader.
Business Rates
Although business rate bills are set to drop by a fifth in April, retailers want further overhaul reform of current “broken” system.
Shops will see a 20 per cent reduction in business rates bills from April according to the government's £13.6 billion support package announced in Hunt's autumn statement.
Business rate is linked to the underlying value of a property, but they are currently based on values from April 2015. Retailers have long argued that it does not reflect how real estate values in the industry have been hammered due to the pandemic and competition from online firms.
Concerning the issues, Dickinson from BRC stated that the government took an essential step towards longer term reform of the “broken Business Rates system” by the scrapping of downwards phasing of transitional relief.
“Finally, retailers are paying only what they owe, rather than overpaying their rates bill even when the value of their property had already fallen. Yet the need for Business Rates reform is far from over, and the changes made in the budget are a far cry from the fundamental reform promised in 2019,” Dickinson tells Asian Trader.
“The ‘broken’ Business Rates system is a drag on investment, jobs, and the vibrancy of town and city centres. For example, while other business taxes like Corporation Tax and VAT rise and fall with the changes in the economy, Business Rates must be paid in full whether firms are making a profit or a loss.
Helen Dickinson, Chief Executive of the British Retail Consortium
“This makes Business Rates a final nail in the coffin of many struggling stores- shutting shops, costing jobs and preventing new openings,” she says.
Stating how businesses are “rethinking their strategy”, Goodacre from BIRA is also reminding government to recognise that high streets are in a very “fragile” position due to low consumer spending.
“There's real concern for some clear program for economic growth and retailers are concerned about their future. I think this spring statement is an opportunity to start delivering what the government is going to do about stimulating growth in the economy.”
BIRA echoed BRC’s call to state that business rates still need wholesale reform, especially given that for smaller retailers, the rate able values are set to increase by 10 per cent.
“We welcome the higher level of retail discount that will come into force in April, but we also want to see the multiplier permanently reduced for the small retailers to further offset the increase in rate able values,” Goodacre said.
The Federation of Small Businesses (FSB) wants the Small Business Rates Relief (SBRR) threshold raised to £25,000 (it is currently £15,000), while introducing a new “large business multiplier” for properties with a rateable value above £500,000. This move would not cost the government anything, as said by FSB at the beginning of February.
Wages and staff shortage
Labour shortage is a persistent problem now which impacts grocery sector at multiple levels.
To tackle the same, British Chamber of Commerce is calling on to reform the Shortage Occupation List to help firms fill urgent job vacancies from outside the UK when they cannot recruit locally.
There is also buzz that the government is considering extending the working hours limits for foreign students studying in the UK. An expansion of free childcare could also be announced to help parents get back into work.
Retail trade union Usdaw in its formal representation to HM Treasury has asked for a new deal for retail workers with an immediate £12 per hour minimum wage along with an end to one-sided flexibility, ban on zero and short hour’s contracts to provide much needed security of employment and income.
iStock image
Usdaw is also calling for a fundamental overhaul of the Universal Credit system to support the incomes of working people and reform in childcare policies.
FSB is also demanding to bring in a measure to increase employers’ Employment Allowance in line with the National Living Wage, increase tax-free childcare to £3,000 and more help for over 50s employment.
FSB Policy Chair Tina McKenzie said that there is an urgent need of a strong agenda for growth.
“Hopefully, there is a recognition in government that too many initiatives of the past have ignored the small businesses that make up such a large chunk of UK firms, and that we need to focus on small firms when making economic policy,” McKenzie said.
Overall, FSB is calling on the Chancellor to bring forward bold measures to create a budget that drives economic growth and fosters a business-friendly environment.
Energy Bill Relief
From April retailers will be at even greater disadvantage as the government’s support to businesses to cope with the jump in energy bills is set to be slashed significantly, raising energy costs for small businesses by around 80 per cent.
Whilst wholesale energy prices have fallen, the cost to businesses remain very high and the energy support for indie retailers will fall from £6,400 per annum to £400 per annum (based on government figures).
Goodacre points out that with energy companies making record profits, the windfall tax received by the government will be higher than expected, and should allow the government to do more to support businesses. This support could be in the form of grants to improve the energy efficient of the business.
“BIRA would also like to see those business who signed contracts when prices were at their highest last year, be allowed to renegotiate so they can benefit from lower wholesale prices The government should also commit to reviewing the energy support scheme again in October when costs normally increase,” he said.
Business groups including the Association of Convenience Stores (ACS), FSB, and BIRA have written to the Business Secretary, calling on him to rethink plans to slash the support provided to shops and other local businesses amid fears of widespread closures in the summer.
Strongly condemning the government over its failure to help businesses, ACS chief James Lowman has warned that without urgent intervention to allow businesses to renegotiate fairer contracts, local shops will be forced to shut down.
Photo: iStock
ACS has been demanding more support for rural areas as part of the government’s ongoing leveling up agenda, particularly as supporting investment in digital infrastructure to provide rural shops with reliable broadband and mobile coverage, and enabling rural shops to maintain a viable network of free to use cash machines.
In light of slashing subsidies, trade bodies like FSB also want government to provide “Green” vouchers to small businesses to help them invest in environment-friendly sustainable improvements in their premises, including heat pumps, better insulation and solar panels. To implement the same, FSB has proposed a “Help to Green” voucher worth £5,000 with renovations.
What’s Ahead
Overall, small local retailers are worried over the sustainability of their businesses.
As Goodacre points out, consumer habits have changed post-pandemic and footfall will never be the same again. However, small changes, like providing better accessibility for all age groups, parking spots, can go a long way in welcoming shoppers back to high streets.
“Stimulation of economy, increase in consumer confidence, investment in high streets and better support system is what retailers are seeking at the moment,” he concluded.
The last two years have been marked by a period of rapidly rising inflation, majorly driven by energy and food prices. Despite the need and expectations, it is being said that Hunt will be able to offer only modest help in the upcoming budget and no immediate major relief because of tight constraints on the public finances.
It all implies that from April 2023, businesses will be facing highest tax burden since Second World War. The picture will become clearer when Hunt will present his “make or break” budget on March 15.
Britvic, the soft drinks manufacturer set to be acquired by Carlsberg, has posted robust annual results after investment in marketing and product innovation helped it maintain demand for its brands.
Over the year to Sept 30, the company’s pre-tax profits climbed 10.5 per cent to £173.2 million despite a £21.3m hit related to the proposed Carlsberg deal. Britvic stated that its growth was driven by both volume and price-mix, with strong demand for brands such as Pepsi, Tango, Lipton, MiWadi and Ballygowan.
The group noted that scaling up new brands such as Plenish, Jimmy’s, Aqua Libra, and London Essence helped it build its presence in fast-growing categories. Meanwhile, it increased advertising and promotional (A&P) spend by 30.9 per cent to “support long-term brand growth”.
Volumes grew 3.1 per cent, driven by both organic growth and the acquisitions of the Extra Power and Jimmy’s brands.
Chief Executive Simon Litherland said, “We have delivered another excellent financial performance this year, with strong growth across our markets and portfolio of market-leading brands. We have also continued to ensure the business is fit for the future, adding more capacity, investing in our people, and significantly increasing investment in marketing and innovation.
“I am confident that the prospects for our brands and people are extremely positive, and I look forward to them going from strength to strength,” concluded Litherland.
Subject to approval by the regulatory authorities, the £3.3bn acquisition of Britvic by Carlsberg is expected to be completed in the first quarter of 2025.
The Metropolitan Police has identified two new suspects in its investigation into possible criminal offences as part of the Post Office Horizon scandal. This takes the total number of individuals to four as the force also revealed it believes more suspects will be identified as the inquiry progresses.
Scotland Yard said members of the investigation team met with Sir Alan Bates, the leading Post Office campaigner, and fellow victims to update them on the development.
A Met spokesman said: “On Sunday Nov 17, members of the investigating team met with Sir Alan Bates and a number of affected sub-postmasters to provide an update on our progress and next steps, following an invitation to do so.
“Our investigation team, comprising of officers from forces across the UK, is now in place and we will be sharing further details in due course. The team is preparing to contact other affected sub-postmasters soon. While four suspects have been formally identified at this stage, this number will grow as the investigation progresses.”
However, Sir Mark Rowley, the Met Commissioner, has warned it could be years before anyone faces charges because of the “tens of millions of documents” that must be worked through.
Speaking previously on the matter, he said, “I think at the core of this you’ve potentially got fraud, in terms of false documents, if it’s for financial purposes.
“Clearly, we have to prove beyond all reasonable doubt, so really it’s 99.9 per cent, that individuals knowingly corrupted something. So that’s going way beyond incompetence, you have to prove deliberate malice, and that has to be done very thoroughly with an exhaustive investigation.
“So it won’t be quick. But the police service across the country are alive to this and we will do everything we can do to bring people to justice if criminal offences can be proven.”
More than 900 sub-postmasters were wrongfully prosecuted between 1999 and 2015 as a result of the Horizon scandal, in which the faulty computer software incorrectly recorded shortfalls on their accounts. Of these, hundreds of people are still awaiting compensation despite the previous government announcing that those who had convictions quashed were eligible for payouts of £600,000.
Oral evidence at the Post Office inquiry concluded this month.
New research by American Express Shop Small reveals the nation’s top 10 hotspots for independent shops, showcasing the small businesses and the valuable role they plan in their local communities.
American Express partnered with retail experts GlobalData to identify the top high streets for independent shops through ranking factors such as the number of independent outlets, variety of business types, and vibrancy of the high street.
The list also took into consideration the number of Gen Z and Millennial independent business owners (those aged between 18-43) in each location, factoring in how these younger generations are investing in the future success of UK high streets. Across the top 10 hotspots, on average over a third (36 per cent) of all business owners are in these age cohorts.
The research identified bustling St Mary’s Street in Stamford, Lincolnshire, as Britain’s top hotspot for independent shops – scoring highly across all the factors and delivering a unique experience for shoppers.
Britain’s top high street hotspots for independent shops:
St Mary’s Street, Stamford, Lincolnshire
Devonshire Street / Division Street, Sheffield, Yorkshire
Gloucester Road, Bristol
Market Street / Bridge Gate, Hebden Bridge, Yorkshire
Stoke Newington Church Street, Hackney, London
High Street, Narberth, Pembrokeshire
Oldham Street, Manchester, Greater Manchester
Bailgate, Lincoln, Lincolnshire
Byres Road, Glasgow
The Lanes, Norwich, Norfolk
Beyond their contribution to local communities, the research also revealed how living near a vibrant independent high street can benefit home valuations.
Dan Edelman, general manager, Merchant Services at American Express, said, “Small businesses play a crucial role in supporting local economies up and down the country, and it’s pleasing to now see their impact beyond the high street. Through our Shop Small campaign and support of Small Business Saturday we’re proud to be championing and shining a spotlight on the diverse and vibrant independent businesses who help our local communities thrive.”
The research is released ahead of this year’s Small Business Saturday (Dec 7), of which American Express is founder and principal supporter. Small Business Saturday is the UK’s most successful small business campaign. Over the years it has been running, it has engaged millions of people and seen billions of pounds spent with small businesses across the UK on the day, with an impact that lasts all year round.
Michelle Ovens, director of Small Business Saturday, said, “The nation’s 5.5 million small businesses bring incredible value to the UK’s economy, society and communities, and this research underlines the material impact they have in boosting local areas. On Small Business Saturday, and beyond, we are asking the nation to throw their arms around their favourite local small businesses and show them how much they mean to us all and the wider community. Public support is so vital for small businesses, particularly for the next generation of owners.”
Matt Piner, research director at GlobalData, commented on the findings, “Independent shops bring something different to high streets, offering uniqueness and propositions that are finely tuned to the needs of their local communities. As younger generations of shoppers are attracted to their local high streets, so too are shop owners, with a new breed of Gen Z and Millennial entrepreneurs helping to keep them thriving.”
As part of this year’s Shop Small campaign, American Express has pledged £100,000 worth of grants to small businesses. The Champion Small initiative encourages Cardmembers to nominate their favourite independent small business, with 10 set to receive a £10,000 grant. Those who nominate a business will be entered into a prize draw too, with a chance to win one of 50 x £1,000 statement credits.
Shoppers who walk and wheel spend more than those arriving by car, states a recent report, demonstrating the significant economic and social benefits of investing in walkable town centres, challenging traditional views on urban accessibility.
The findings published in third edition of "The Pedestrian Pound Report", recently published by Living Streets, the UK charity for everyday walking, come at a critical juncture for British high streets, with a record number of retail failures in 2022 and a vacancy rate of nearly one in seven by the end of 2023.
The launch of the report is backed by Scotland’s national walking charity, Paths for All, underscoring the need to make walking a central feature of Scotland’s high streets.
“Making high streets and town centres more walkable increases time – and money – spent in those businesses,” says Catherine Woodhead, Chief Executive of Living Streets. “It’s slowly being recognised – the majority (95 per cent) of London’s Business Improvement Districts identify a good walking environment as important to business performance.”
The report highlights encouraging data from Scottish towns, such as Nairn, where public space improvements and community events have significantly bolstered foot traffic. In 2022, a Christmas event in the town drew 7,800 attendees, including 600 new visitors, while a classic car show in 2023 attracted over 10,000, with 80 per cent saying they would return even outside of events.
Kevin Lafferty, Chief Executive of Paths for All, emphasised the broader benefits, “These findings show that when we put people first and make walking and wheeling the easiest, most natural choices, we don’t just get an economic boost – we build communities that are happier, healthier, and more sustainable for everyone.”
The report highlights that 85 per cent of Scottish adults walk or wheel regularly, contributing to both economic and health benefits.
In Scotland alone, the health benefits from walking to work are valued at over £600 million annually in prevented deaths. Community-focused initiatives, such as the Alloa Hub, are proving successful in encouraging residents to travel into town centres, with research showing that 56p of every £1 spent in community businesses stays in the local economy.
The report is timely, with investment in active and sustainable transport cut by £23.7 million by the Scottish Government this September. The Pedestrian Pound provides an excellent case for these vital funds to be restored.
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Home secretary Yvette Cooper speaking at the annual conference hosted by the NPCC and APCC on 19 November 2024
Home secretary Yvette Cooper has announced plans to rebuild neighbourhood policing and combat surging shop theft as part of an ambitious programme of reform to policing.
In her first major speech at the annual conference hosted by the National Police Chiefs’ Council and Association of Police and Crime Commissioners on Tuesday, Cooper highlighted four of the key areas for reform: neighbourhood policing, police performance, structures and capabilities, crime prevention.
The initiatives she announced include:
a Neighbourhood Policing Guarantee to get policing back to basics and rebuild trust between local forces and the communities they serve
a new Police Performance Unit to track national data on local performance and drive up standards
a new National Centre of Policing to harness new technology and forensics, making sure policing is better equipped to meet the changing nature of crime
The home secretary also announced more than half a billion pounds of additional central government funding for policing next year to support the government’s Safer Streets Mission, including an increase in the core grant for police forces, and extra resources for neighbourhood policing, the NCA and counter-terrorism.
In her speech, Cooper said that without a major overhaul to increase public confidence, the British tradition of policing by consent will be in peril.
“I am determined that neighbourhood policing must be rebuilt,” she said, pointing to its decline over the past decade. Cuts to community-based roles have left town centres vulnerable to rising crime and antisocial behaviour, she added.
“Shop theft is up at a record high, street theft is up 40 per cent in a year… Criminals – often organised gangs – are just getting away with it. We cannot stand for this,” she said.
Cooper reiterated the government’s commitment to deliver an additional 13,000 police officers, PCSOs and special constables in neighbourhood policing roles, adding that further steps will be announced in the coming weeks.
The reforms will restore community patrols with a Neighbourhood Policing Guarantee and an enhanced role for Police and Crime Commissioners to prevent crime. The changes will also ensure that policing has the national capabilities it needs to fight fast-changing, complex crimes which cut across police force boundaries.
“The challenge of rebuilding public confidence is a shared one for government and policing. This is an opportunity for a fundamental reset in that relationship, and together we will embark on this roadmap for reform to regain the trust and support of the people we all serve and to reinvigorate the best of policing,” Cooper said.