A message from our CEO, Steven Medway:
Today’s Budget was sold as a package to boost productivity and address the UK’s stagnant growth. For us, it was a curate’s egg: good in parts for London, for hospitality and retail.
Business Rates relief extended
Smaller retailers obtained a reprieve from Business Rates hikes from April 2024 as reliefs on their bills were extended another year. The average restaurant will see their bills increase by around £20,000 – £25,000 and the average hotel will have to find an extra £30,000 in April. However, the year on year extension in Business Rates relief does lead one to think that the wholesale reform of Business Rates, long-promised, is becoming sorely overdue.
Relief from Business Rates costs for smaller businesses also fail to acknowledge the headwinds this year that businesses of all sizes have seen in the form of utility costs and retail crime; as the Knightsbridge Partnership, our Business Cost Reduction Scheme and Street Team respectively have helped our businesses to recover hundreds of thousands of pounds. It would have been good to see a gesture from Government to acknowledge these additional burdens.
Yet the inflationary rise in Business Rates will still bite for larger retailers
For larger retailers and hospitality, however, an inflationary increase in Business Rates of 6.7% from April will see larger businesses siphon funding away from the very investment that’s brought us back from the pandemic brink. For them, the expansion of full expensing may be helpful for purchasing plant and machinery, less helpful for the considerable budgets necessary to tempt shoppers both domestic and international, to our doors.
A glimmer of light on Tax-Free Shopping
On tax free shopping, the door was left ajar for the return of the scheme, an issue on which we have long campaigned. However, going into a (likely) General Election year it is vital that we continue to make the case to Government, as we did in our Autumn Statement submission, that we have seen negative impacts from the withdrawal of the scheme. In the ensuing debate on the Autumn Statement, the Chancellor has said that officials are ‘reviewing the numbers’ to see if tax free shopping is more affordable to the Exchequer than the £2.5bn-a-year that HM Treasury predicted. Since the CEBR and Oxford Economics, and many businesses besides, say it is, we’re optimistic that the Chancellor may yet see reason.
We will continue to work alongside partners to deliver this campaign for members. Today is the first signs of public movement we have seen in some months, and to be welcomed. That said, the longer Government delays, the longer business foots the bill. This mustn’t linger in the long grass.
Capital funding is still sorely needed for London’s transport
Part of being a world-leading city means having a world-leading transport infrastructure. We joined business leaders and local councils earlier this year in calling on the Chancellor to agree a funding package in the Autumn Statement. Within the next 15 years, London’s transport networks will need to cater for over five million additional trips every day, and the network is already creaking under existing pressure. There was no sign of the capital funding in today’s Autumn Statement, meaning on current trajectories that capacity won’t be met, and London will be on a road to nowhere. We need to start laying new track in earnest.