London, UK: Here are the industry’s responses to Jeremy Hunt’s autumn statement, a £55bn package of tax rises and spending cuts to put the UK “on a balanced path to stability”.
Shane Brennan, chief executive, Cold Chain Federation, said: “The Chancellor has confirmed today that the overall scale of energy bill relief for businesses post-March 2023 will be significantly lower, and that the scheme will be targeted at the businesses that government considers most affected.
“We can expect further detail when the government’s review is published later this year. The Cold Chain Federation is providing evidence to government to emphasise that storing and distributing fresh and frozen foods at consistent, reliably low temperatures will require more energy, rather than less, as the weather turns warmer in Spring 2023,” Brennan said.
“The cold chain is critical national infrastructure and we are urging government to continue meaningful energy relief for operators to not only ensure the stability of cold chain businesses and the wider food supply chain, but to help minimise food price inflation too.”
Logistics UK is “encouraged that the government has prioritised stability for the economy after a period of volatility, which will help restore confidence for businesses.” Kate Jennings, policy director, Logistics UK, said there is also disappointment that some of the measures announced could stifle the switch to greener energy.
“The government’s announcement of continued infrastructure investment for Northern Powerhouse Rail, the HS2 extension to Manchester and the East West Rail link is good news for logistics businesses looking to strengthen cross-country connections with their customers,” she said..
“However, the removal of Vehicle Excise Duty relief on vans is an unhelpful signal for millions of businesses at a time when they are being encouraged to move away from diesel. Most logistics operators work on very narrow margins, with vehicle acquisition schedules planned way in advance to minimise disruption to cash flow. At a time when operators are already facing increased operating costs, the additional tax imposition will create an additional burden: our sector needs more incentives to make the switch to alternative fuels, rather than barriers on the road to Net Zero,” Jenning said.
Clare Bottle, chief executive, UKWA, branded the intended increase in business rates for warehouses ‘unfair’. Total business rates paid by the retail sector are estimated to fall by 20%, but for large distribution warehouses business rates will rise by a painful 27%.
“The changes in business rates are intended to reflect the growth of the online sales sector, but not all warehouses are involved in ecommerce. What’s more, eCommerce is seeing a downturn since the end of the COVID lockdowns,” Bottle said.
“Retail shops on the high street, who are seeing a fall in bills, will get the full reduction as a result of transition relief reforms. Online marketplace warehouses, on the other hand, will pay higher bills, because of the revaluation, even though our sector has seen bills go up, including increased wages, energy costs and equipment like MHE and racking. Warehousing is facing a disproportionate increase in business rates.
The transitional relief is intended to make increases more manageable, with caps at 5%, 15% and 30% for small, medium and large properties. But most warehouses fall into the latter category… and therefore could still potentially be seeing up to 40% increases in their rates bills. The 30% cap is very high and not of huge benefit to most logistics properties. This is a big disappointment and simply not fair.”
On a more positive note, UKWA has welcomed the chancellor’s comments on the need for energy independence combined with energy efficiency – independence to ensure that the country is not at the mercy of international gas prices and the threat of energy blackmail, efficiency to reduce demand and climate impact.
“Jeremy Hunt has declared that Britain is a global leader in renewable energy, with our renewable energy production growing faster than any other large country in Europe last year. Following our major report on the potential benefits to the UK (as well as to the logistics sector) of solar PV on warehouse rooftops, we are hopeful of pushing on an ‘open door’ to engage government in discussion on support for more businesses in embracing solar power.” Bottle said.
Autumn statement business highlights
- Support worth £13.6bn over next five years to help firms with business rates, including a mixture of freezes and reliefs
- Import taxes removed on more than 100 goods, including some food products, for two years to reduce costs
- A planned tax on online sales shelved due to “complexity”
- Electric cars, vans and motorcycles to pay road taxes from April 2025.
