UPDATED: The government have committed to slashing energy bills for businesses over a 6 month period, with the potential to extend the scheme further still. The aid will apply to fixed-term contracts agreed on or after April 1st 2022, and apply to energy usage from October 1st. The fixed rate is expected to be set at £211 per K/Wh for electricity and £75 per MWh for gas usage; effectively more than halving the previously anticipated prices that were causing businesses so much grief.
As the new government cabinet gets to work, the retail sector is bracing for the announcement of the autumn mini-budget from newly minted Chancellor Kwasi Kwartang this week.
The contents of that red briefcase will significantly impact businesses up and down the country, and retail stores, both large and small, will need to understand the implications of the new budget. In line with policy changes by the new, Truss-led government, we can anticipate several announcements that will specifically impact those in the retail sector.
First and perhaps most sought-after by both individuals and businesses is the suggested cap on energy bills and further measures to support taxpayers with the impact of energy spending. As the retail sector grapples with the rising cost of energy in particular, with long-opening hours and the need for large-scale refrigeration, many are looking for the government to clarify their plans to keep spending down during the 6-month energy support scheme for British businesses. As of now, retailers can only speculate as to the specifics of this scheme. However, with the government expected to borrow more than £100B to fund this support package, Britain’s around 50,000 independent retailers could be looking at relatively substantive aid.
(SEE UPDATE ABOVE FOR DETAILS)
It should be noted, however, that as per a Financial Times report on the subject, government aid to businesses may not be in place until November of this year. The government has nonetheless, if necessary, committed to backdating payments to the start of October.
Equally, many retailers are turning their attention to the ‘golden quarter’ of the fiscal year, as the sprint towards the Christmas period would ordinarily yield a marked increase in average consumer spending. With the cost-of-living crisis affecting millions of households, there has been a growing concern among businesses that consumers will tighten their pursestrings for the remainder of the fiscal year. Independent retailers will be looking to the mini-budget in the hopes of seeing measures designed to increase the public’s spending power to mitigate the impact on businesses.
The chancellor is expected to announce new tax cuts, in line with Liz Truss’s campaign promises, aimed at lessening the consequence of income tax; alongside changes to national insurance that could save the individual consumer anything from £1,800-£7,000 per anum. This, coupled with suspected cuts to corporation tax, helps to mitigate a rise in the sale-price of consumer goods aught to help businesses bring customers into stores throughout Q4 of 2022 and beyond.
In a letter to the Government this week, Helen Dickinson: Chief executive of the British Retail Consortium, stated that:
“We need policies that ensure our survival through the winter which will allow us to invest in the long-term potential of our sector”.
No doubt independent retailers will look past whatever measures are announced by the Chancellor on Friday, and further into the future, as the long-time financial implications of government aid packages and policy changes take effect. As soon as October for example, retailers will begin changing their practices in line with new HFSS (High Fat, Sugar & Salt) trading standards.
In the short term, however, the sector can breathe a sigh of relief.
Help is coming for the winter.
Let us know what you think of the Autumn Mini-Budget and what impact it will have on your business by emailing:
info@c-talk.co.uk.
