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The business rates holiday will be extended to the end of June, and the furlough scheme will now run until the end of September, chancellor Rishi Sunak has confirmed in his Spring Budget.
The announcement also included a £520m Help to Grow scheme to boost small businesses, via productivity-enhancing software and free advice on technology such as cloud storage. This comes in addition to a £5bn rescue scheme for hospitality and retail announced earlier this week.
Here’s how the food and drink industry responded to the Spring Budget.
Food and Drink Federation (FDF) chief executive Ian Wright said the Budget “struck the right balance between supporting recovery and acknowledging the difficult choices that have to be made to restore the country’s finances”.
He continued: “Food and drink businesses supplying the hospitality and food service sectors will welcome the extension of the furlough scheme. However, we have concerns that support tapers too soon and should be kept under review.
“As the UK’s largest manufacturing sector, we welcome the news that the Bank of England and the chancellor are doubling incentive payments for businesses hiring apprenticeships. However, increased flexibility of the apprenticeship levy would enable the system to work for the wider food and drink supply chain, particularly SMEs, and must be considered in relation to any new incentives.
“The Chancellor rightly expressed his firm intention not to increase the cost of living and has recognised the importance of encouraging investment as the key driver of recovery. He should therefore review proposed regulatory changes that will increase food prices.”
Luke Davis, founder of seafront restaurant and bar, Rockwater Hove, said the freezing of alcohol duties was welcome news, and the restart grants “offer venues much needed support for getting the ball rolling on April 12th”.
“However, we would have liked to have seen more from the chancellor to help businesses get back on their feet,” he added. “As he quite rightly pointed out, there are 150,000 businesses in hospitality that have been heavily affected by the pandemic.
“We need a seismic response that will incentivise cash injections into the sector. One way of doing this would have been to reopen hospitality to EIS investment. EIS has a track record of injecting huge levels of capital into the private sector, and with breweries and pub groups leading several investment rounds to stay afloat during the pandemic, increasing the threshold for eligible businesses.”
Will Broome, CEO of Ubamarket LTD, agreed, adding that the sector “cannot be put in a similar position where they are expected to take on so much debt for inactivity, but not receive the requisite funding for ensuring every guest is safe.
“With previous schemes from the chancellor undoubtedly helping the sector in times of need, they have raised concern for public safety. We therefore call upon the chancellor to look to further funding for venues to have the budget to install protective measures, which will be essential in protecting new team members that are coming out of furlough.”
Bradley Gough, founder and CEO of Groubook, also welcomed the restart grants. “The continuation of VAT reductions will also support operators to bank some of the money they have lost during the pandemic. There is an air of optimism around this great industry again, and we all cannot wait to reopen and get back to doing what we love,” he said.
Michelle Ovens, founder of Small Business Britain welcomed the Help to Grow package, saying it was “a strong step forwards in practical business support. We know small businesses will be the engine of recovery for the UK economy and embracing all opportunities like digital training, digital vouchers and expert management training will be key to unlocking that potential. She added that the new restart grants were “extremely good news and a step in the right direction”.
“This has been, as anticipated, a very ‘Small Business’ budget. Extension to September of key programmes such as furlough and SEISS, extension to VAT cuts and the business rates holiday, new grants and new programmes such as the new government-backed lending programme all recognise that the crisis is far from over for small businesses,” Michelle said.
“Extending the business rates holiday for retail and hospitality is very welcome to take some of the pressure off these hard hit sectors, as they look to open up again. We hope this recognition of the huge burden on small businesses that rates place, will play a role in the - surely imminent - rethink of the rates system across the UK,” she added.
Alongside the Help to Grow programme, Michelle said a combined effort will be needed from the public and private sector. “We all have a role to play in getting through this crisis and returning businesses and communities to growth, so they can thrive again.”
Federation of Small Businesses (FSB) national chair Mike Cherry said small businesses will welcome the extension of flagship support schemes as well as the confirmation of new support measures around taxation, employment and cash grants.
“The continuation of business rates and VAT discounts is critical, and it’s important that those in supply chains benefit from them, not just those that neatly fit the definitions of frontline retail, leisure and hospitality,” he said. “The new super deduction option sounds very promising, and we look forward to further detail on the investments it will cover – it should be made accessible to the smallest firms.
“Support measures should continually evolve. The challenge over the summer, and leading up to the autumn statement, will be to switch focus from survival to growth. We look forward to working with policymakers on that progression,” he added.
NFU president Minette Batters farm businesses would welcome measures to support rural businesses recover from the impact of Covid-19.
“The announcement of the UK Infrastructure Bank to finance green investment could be a crucial tool in stimulating investment and driving green economic growth. The launch of the Levelling Up Fund could also be positive for rural areas in narrowing the growing divide between rural and urban. We look forward to receiving more detail on how this may work in practice,” she added.
However, Minette said the sector was disappointed that the ‘super-deduction’ on machinery investment was only applicable to limited companies.
“In the longer-term, farm businesses can play a key role in the investment-led recovery that the chancellor has set out today. With an ambition to reach net zero by 2040, British farming can be a pivotal part of meeting our climate ambitions and increasing productivity.”