Greetings retailers disappointed as Chancellor fails to help High Street
The significant cut in national insurance rates and a small raise in the vat threshold were the only glimmers of hope for independent retailers in the spring budget, as greeting card and gift stores were largely disappointed with the Chancellor’s recent Budget.
The Treasury estimates the latest cut to ni, which drops it to 8% following the autumn statement reduction from 12% to 10%, will give an average worker on £34,500 more than £900 a year, giving them more disposable income.
But there was no reduction in business rates in the Budget announcement by Chancellor Jeremy Hunt on Wednesday, 6 March, and the vat registration threshold only rose to £90,000 from £85,000 so there’s not much movement in growth opportunities there.
“I’m extremely disappointed the Chancellor has chosen not to do more to support the High Street,” said Anne Barber, owner of greeting card and gift indie In Heaven At Home in Market Harborough.
“With our increased salary costs, high utility bills and customers suffering from the whole cost-of-living crisis, in particular, high mortgage interest rates, food and fuel costs, it would have been much appreciated if the chancellor could have seen how very tough things are for small businesses and done something more to help.
“As always, we are resilient and will battle on and serve our lovely customers with a smile on our faces, but it really is very hard to make a decent living with so many negative impacts.”
And David Lorimer, co-owner of seven Brocante stores in Devon and Cornwall, said: “We felt the Budget did nothing to support the small businesses who are over the vat threshold. The only positive was the cut in ni which means people will have a small amount more to spend.”
As the government ignored pleas from some of the biggest names in retail along with continuous lobbying by retail trade associations, British Independent Retailers’ Association ceo Andrew Goodacre expressed his disappointment at the lack of action on business rates, although he said he hoped the “positive impact” of the ni cuts “will boost consumer confidence, enabling them to spend more on the High Streets”.
But he added: There is a missed opportunity in not addressing the planned 7% increase in business rates, which remains a concern for the retail sector.
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Above: Brocante’s David Lorimer (right) and co-owner Kieron Cockley thought the ni cut is positive
“We remain cautious about long-term economic growth, and there is the need for initiatives that drive employment and production. The association believes sustained economic growth is crucial for the growth of businesses, and more measures are needed to support this aspect
At Bill & Bert’s in Colchester co-owner Bill Nettlefield was pleased that the November Budget had confirmed the 75% discount on retail and hospitality rates would continue through to 2025, commenting: “It will now be down to whoever wins the next election to announce as soon as possible that this level of discount will continue, and give us all as much notice so we all know where we stand.
“Obviously there is no appetite to reform the rates, so the knowledge early about the discount is vital for business planning. Nothing announced on Wednesday will change mine, or indeed most people’s outlook on 2024, so with this in mind we, as independent retailers, must carry on doing what we all do best – customer service will remain our top priority.”
And Jon May, co-owner of Mooch Gifts & Home in Bewdley and Stourport-on Severn, was despondent: “Mr Hunt has done nothing to support small business or, indeed, boost consumer confidence so people go out and spend on the High Streets. It really is time for a change. Our country is broken.”
It was “the Budget that wasn’t” for ParcelHero’s head of consumer research David Jinks who explained: “Hundreds of sme retailers and local companies were waiting desperately for urgent reforms to their business rates, as well as specific tax cuts for those in the hospitality sector and on foreign tourists’ retail spending. It’s distressing that none of these widely-expected reforms actually happened.
“The government has again failed to tackle business rates reform, leaving many retailers and businesses in a state of limbo. Businesses will find it hard to plan for the future until there is a proper solution to the vexed issue of rates. There was a woolly reference to further business rates support, together with £200million more for the post-pandemic Recovery Loan Scheme/Growth Guarantee Scheme – that’s not enough.
‘Business rates devour a significant amount of most local shops’ annual turnover. News that film studios in England will get 40% relief on their gross business rates until 2034 is welcome but will do little to help our favourite local High Street stores.”
