The UK grocery sector anticipates the new Labour government’s Budget, focusing on key changes that could impact businesses and consumers nationwide.
- Businesses are calling for a revamp in the business rates system to support brick-and-mortar stores and ensure online businesses contribute fairly to taxes.
- Employment rights are under review, with hopes for supportive legislation that aligns with business growth and economic stability.
- Farmers seek government action to balance the supply chain, ensuring fair deals from supermarkets and strengthening British farming.
- There are concerns about potential tax hikes and their effects on employment and business investment, particularly in the retail sector.
As Chancellor Rachel Reeves prepares to deliver the first Budget for the Labour government, the grocery sector has a clear list of priorities. Business leaders are highlighting the need for significant changes in the business rates system to support physical stores and equitably tax online businesses. This structural issue sees retailers contributing disproportionately to the economy, accounting for 5% yet shouldering over 20% of business rates. Major players like M&S and Co-op are advocating for these reforms to revitalize UK high streets.
The Budget also addresses employment rights, with businesses like John Lewis and Co-op engaging in discussions. They support the government’s intent to grow the economy, anticipating employment legislation that will aid business operations and align with existing company practices. Such legislative changes are expected to foster a supportive environment for businesses to thrive.
In the agricultural sector, farmers are urging the Budget to rectify supply chain imbalances, with voices like Guy Singh-Watson emphasizing the need for equitable treatment of farmers. Farmers are pushing for enhancements to the Groceries Code Adjudicator’s power to address supermarket-driven pressures and support local produce opportunities. The National Farmers Union is calling for the continuation of underspent agricultural funds to bolster the sector.
Concerns are growing over prospective increases in National Insurance, seen as a tax on both large employers and their suppliers, potentially hindering job opportunities. Retailers are wary of additional tax burdens that may force difficult decisions around investment and services, stressing the need for fair tax distribution to maintain business viability.
The grocery sector is also closely watching fiscal policies affecting interest rates, wine duty, and health-related taxes. There’s an emphasis on measures that could spur economic growth, such as interest rate reductions to boost household spending and reforms in wine duty to support industry growth. Proposals for health taxes are viewed with caution, advocating for comprehensive approaches rather than isolated tax measures to drive healthier consumer behaviors.
The upcoming Budget presents a pivotal moment for the grocery sector, offering opportunities to address key issues affecting businesses and communities across the UK.
