The Chancellor has delivered his final Budget of the parliament, giving a host of tax breaks and incentives in a politically charged speech that will hope to buoy the Conservatives ahead of the election in May.
A reduction in duty rates on alcohol, alongside a renewed commitment from HMRC to clamp down on duty fraud and the upcoming introduction of an alcohol wholesaler registration scheme are all positive steps toward tackling the damaging illicit trade. Unfortunately, the government has not made the same commitments on tobacco. A rise in duty rates, plain packaging and covered gantries are all measures likely to drive customers toward criminals selling cheap tobacco. The Budget report makes new pledges to tackle the illicit trade – I’ll believe it when I see it.
Other announcements affecting our sector – the Low Pay Commission’s recommendation of a 3% increase in the minimum wage and the launch of a fundamental review of the rates system – were actually announced a couple of days before the Budget. The rates review has the potential to transform the way business rates are calculated and administered. The minimum wage news was more concerning, however, given both the Chancellor and the leader of the opposition’s rhetoric suggesting they see this policy as a handy crowd-pleasing standby funded by business, not the public purse.
Overall, this was a safe Budget with a clear objective to appeal to voters. The real challenges will come when the next government unveils its programme after the election.