fbpx

News & Insights

The Budget 2021: Reactions

5th March 2021

After learning what their futures may hold, firms across the country have responded to the Budget with mixed emotions.

The Chancellor’s economic plan aimed to tackle the challenges the pandemic presented to employers and employees alike, with a particular focus on saving jobs.

The extension of the furlough scheme till the end of September is arguably the highlight, as closed businesses will still receive support keep on staff who aren’t able to work; part of Sunak’s promise to “protect jobs and livelihoods”.

Businesses in the hospitality industry have generally welcomed the announcement.

Kate Nicholls, head of the UK Hospitality lobby group, gave an overview of the Budget, summarising how “the Chancellor has listened to our concerns of the hospitality sector…it looks like crucial support will help businesses at a critical time”.

The group had previously advocated for an extension of the 5% VAT rate for hospitality firms and the business rates holiday, both of which were confirmed.

Additionally, Rob Pitcher, CEO of Revolution Bars, felt the Budget would allow his company to “regain a financial position from which it can develop and thrive” after being permitted to open nearly a third of all venues from 12th April in accordance with the government’s roadmap.

However, a prevalent issue not touched upon in the Budget was the possible extension of the commercial tenant’s eviction moratorium.

The moratorium, a responsibility of the Ministry of Housing, Communities and Local Government, has prevented commercial landlords from evicting their tenants regardless of whether they are in a position to pay rent. It was previously extended in December 2020 and is due to expire at the end of March.

Neil Randall of Anytime Fitness UK has highlighted this issue and warned that its conclusion will be a serious worry for affected businesses: “a notably disappointing omission was the lack of support around relationships between commercial tenants and landlords, with spiralling rents arrears being the most significant debts that leisure operators are having to navigate”.

Some further criticism of the Budget focused around the end of the business rates holiday for specific sectors. From June, one-third of business rates will be due from retail, hospitality and leisure businesses occupying commercial property.

Most notably, Mike Ashley’s Frasers Group, which is parent to brands such as House of Fraser, Sports Direct and Jack Wills, has issued a response to the Budget announcement. Ashley has advised that many of their numerous retail locations will be forced to close after being hit with business rates once again.

Other industry leaders have also stated that many businesses will struggle to contribute to the furlough scheme as they begin to operate again. From July, employers will be expected to pay 10% towards the hours their staff don’t work, increasing to 20% in August and September before the support measure’s cessation.

Whilst the Budget has provided the assurance of business survival for many, it appears there are still a number of issues for the government to tackle to ensure a smooth re-opening of the economy. 

Other Articles

Get in Touch

If you would like to discuss the content of this article, please do get in touch and we'll get back to you shortly.