Below are the headline areas of impact across the Retail and Consumer Sector.
A full copy of the Budget can be found here.
A rejuvenation of the high street was a key focus of this year's budget. Specifically, the government aims to take "long-term action to help high streets and town centres evolve and keep up with changing consumer behaviour so that they can remain at the heart of local communities":
- Business rates will be cut by a third for retail properties with a rateable value below £51,000 for a period of 2 years from April 2019. The government claims that this will benefit up to 90% of retail properties, but doesn't address the problem for larger occupiers. Arguably, therefore, it would not have prevented many of the high-profile retail collapses that we have seen in recent months.
- A £675m Future High Streets Fund will invest in improvements to town centre infrastructure, including to increase access to high streets, reduce congestion, support redevelopment around high streets and enable housing and new workspaces to be created. Further details of how the fund will work are to follow.
- The government aims to modernise planning rules to support the transformation of the high street. Consultations will focus on supporting the conversion of commercial properties into offices or homes and the use of mixed-use business models to form "the vibrant high street of the future".
- There will be a trial register of empty commercial properties to help marry prospective retailers with retail space in a bid to tackle "fragmented ownership" on the high street.
- The regeneration of the "heritage high street" is also an area of focus, and the government intends to help Historic England restore the historic buildings "that make our high streets special".
Tackling the problem from another angle, Philip Hammond also announced a new digital services tax, which aims to target the very biggest online businesses (those generating at least £500m a year in global revenue), potentially from April 2020.
Whether the government's efforts to turnaround the UK's high streets have an appreciable effect remains to be seen. However, with an increase in the National Living Wage from £7.83 to £8.21 an hour, and an increase in the personal allowance from £11,850 to £12,500, consumers may well have more money in their pockets to spend.
In other news…
- Producers of beer and spirits will welcome the duty freeze on those products. However, as previously announced at the Autumn Budget 2017, the government will introduce a new duty band for still cider and perry with an ABV of 6.9% to 7.5%, with the aim of targeting "white ciders" and their "excessive consumption by the most vulnerable people".
- Consumers are increasingly concerned about the UK's reliance on single use plastic. In response, a new tax is to be introduced on the manufacture and import of plastic packaging that contains less than 30% recycled plastic. The government will also reform the Packaging Producer Responsibility System, with the aim of increasing producer responsibility for the costs of their packaging waste, including plastic. This system will provide an incentive for producers to design packaging that is easier to recycle and penalise the use of difficult to recycle packaging, such as black plastics.
- However, there are no current plans to introduce a levy on disposable plastic cups.