UK retailers have welcomed a rate respite implemented in the Chancellor’s Budget today (22 November) that will see the move from RPI to CPI indexation brought forward by two years.
In today’s Autumn Budget, Chancellor Philip Hammond announced the switch over business rates from retail price index (RPI) to the consumer price index (CPI) will take place two years earlier than planned.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The switch to CPI as a measure of inflation in April 2018, will save businesses GBP2.3bn (US$3.05bn) over the next five years, the Chancellor claims, and is estimated to save businesses nearly 1% on their rates bills.
The British Retail Consortium (BRC) welcomed the news as a positive move.
“From being caught in a web of competing pressures from all parts of the economy, limiting the scope for action, it’s clear that the Chancellor has listened to the retail industry and the growing chorus from across business and commercial life who have spoken up in favour of action to mitigate rising rates bills,” says BRC chief executive, Helen Dickinson. “Crucially, this relief will unleash investment that retailers want to direct towards the needs of their customers. This will be particularly critical at a time when shoppers’ disposable income is being squeezed further and the growth projections for the economy have been downgraded.
“Introducing three yearly revaluations is also a positive move to improve fairness of the system. These are encouraging first steps, so now is the time to commit once and for all to putting the rates system on a more affordable and sustainable footing, to support local communities, shops and jobs. We are keen to work with Government to deliver on that.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe Chancellor also announced an increase to tHE National Living Wage will rise from GBP7.50 to GBP7.83 per hour for those aged 25 and over.
“In a challenging environment, the retail industry has worked hard to implement the National Living Wage, with many paying beyond the legal requirement, as well as extending the rate to all staff irrespective of age,” Dickinson adds.
“Wage growth in retail continues to outpace the economy-wide average. Maintaining productivity gains remains crucial to sustaining this wage growth as employers contend with recent and upcoming changes to statutory employment costs. Therefore, it’s important that future increases continue to be moderate to reflect this and are subject to a fully independent Low Pay Commission.”
