Budget 2021: FWD responds

As Chancellor Rishi Sunak chooses to ‘invest’ rather than ‘retrench’ to build a stronger economy post-Covid, FWD Chief Executive James Bielby responds to the measures announced in today’s budget that most affect the sector.

Business rates

There will be new, temporary business rates relief for eligible retail, hospitality and leisure properties for 2022-23. Eligible properties will receive 50% relief, up to a £110,000 per business cap.

James Bielby: The 50% business rates discount for retail, hospitality and leisure is to be welcomed but this discount must also apply to the food and drink supply chain which supplies our vital public sector infrastructure in this country and that has received comparatively very little help from the government throughout the pandemic.

Alcohol duty

A new relief that recognises the importance of pubs and supports responsible drinking will be introduced, with duty rates on draft beer and cider being cut by 5%. The government is publishing a consultation on the detail of these reforms, which will close on 30 January 2022.

James Bielby: While we welcome steps to reduce alcohol duties, creating a distinction between the on and off trade is a harmful way of doing so. It will create costly administrative burdens for our members and risk an increase in alcohol duty fraud. We would urge the government to rethink this approach.

Driver shortage

To support the haulage sector and pandemic recovery efforts, the government will continue to freeze HGV VED for 2022-23 and suspend the HGV Levy for another 12 months from August 2022.

James Bielby: The shortage of HGV drivers has been a significant challenge for wholesalers. We welcome the steps announced by the Chancellor today to mitigate the impact of the shortage, however these measures are no substitute for placing HGV drivers on the shortage occupation list, providing access to a greater pool of labour.

Fuel duty

The government will freeze fuel duty UK-wide in 2022-23. This is the twelfth consecutive year of the freeze, cumulatively saving the average UK car driver £1,900 compared with the pre-2010 escalator.

James Bielby: We very much welcome the cancelled fuel duty increase, this is much needed support at a time of record fuel prices.

National Living Wage

Following the recommendations of the independent Low Pay Commission, the government will increase the NLW for individuals aged 23 and over by 6.6% from £8.91 to £9.50 an hour effective from 1 April 2022.

James Bielby: While our members support the NLW in providing a minimum wage standard, we have concerns regarding the forthcoming increase during a time of major economic upheaval. The Covid-19 pandemic and Brexit have seriously impacted wholesalers’ revenues and disrupted the growth of their businesses. Further costs will detrimentally impact the sector. Looking ahead, there should not be a fixed target to achieve 66% of medium earnings, the Government must and should consider the economic impact such decisions will have on the sector and the wider economy.

Alcohol budget business rates fuel FWD Government HGV drivers James Bielby National Living Wage Rishi Sunak