Following a year in which the retail industry has been one of the hardest hit sectors by the coronavirus pandemic, there was some welcome relief today when the Chancellor's widely previewed budget was announced. It includes a package of measures to help retailers to get back on their feet once non-essential retail reopens on 12 April 2021 under the government's planned roadmap. These include:
- An extension of the business rates relief
- An extension of the furlough scheme until the end of September
- A £5bn package of restart grants for non-essential retailers.
Business rates relief extension
As widely lobbied for by retailers, the Chancellor extended last year's business rates holiday for another three months, discounting rates for the following nine months by 2/3rds up to a maximum of £2 million for closed businesses. This will be welcomed by all bricks and mortar retailers who have long seen the current system of business rates as unfair and archaic. This has become a political hot potato, with this month's long-awaited government review of the system being delayed by HMRC until later this year. Mr Sunak's announcement is similar to, but not 100% consistent with, Scotland where Nicola Sturgeon recently announced a full business rates holiday for the 2021/22 financial year.
Extension of the furlough scheme
The Chancellor's extension of the furlough scheme until the end of September will also be welcomed by the industry. Given that just under 1 million people working in retail are currently on furlough, avoiding a 'cliff edge' end to the scheme just as non-essential retailers start to open their doors to customers is clearly the right thing to do.
A £5bn package of restart grants for non-essential retailers
The Chancellor also unveiled a £5bn Restart Grant Scheme to support non-essential retailers and other hospitality and leisure businesses which have borne the brunt of COVID-19. Retailers will be able to access £6,000 per premises in order to help them get back on their feet. Whilst the total sum is, without doubt, substantial, there will be many within the industry who will see this as too little too late.
Whether or not the Chancellor's package of measures for retail will be enough to save many non-essential retailers remains to be seen but all eyes will be on overall trading figures after 12 April 2021 once the High Street opens its doors again to the public.