Chancellor Philip Hammond pledges extra £60 million for trees as he claims end to austerity

In his last Budget before Brexit, the chancellor has announced an extra £60 million on tree planting initiatives and pledged that the "era of austerity is finally coming to an end".

Philip Hammond
Philip Hammond

Among the measures announced in October 29's Budget were:

Trees: £60m will be spent on planting millions more trees across England, including a project to plant new street and urban trees set to receive £10m, to be matched by contributions of funding and assistance from local authorities, community groups and charities. A further £50 million goes to buy carbon credits from landowners who plant qualifying woodland. The Treasury said the latter would provide for an estimated 10 million new trees over the next 30 years.

Business rates: £900m in business rates relief for small businesses and £650m to rejuvenate High Streets. One-third cut from England retailers, pubs, cafes with £51,000 a year or less business rates. 

Digital services tax: From April 2020 to raise £400m/year on global online businesses generating more than £500m a year (and not a sales tax on online purchases).

Retail: £675m co-funded for Future High Street Fund to support councils' plans to transform High Streets.

Plastic tax: A new tax on manufacture and import of plastics with less than 30% recycled material. No coffee cup tax.

Cider: No rise in duty, though white cider will be taxed at a higher rate.

National Living WageRises to £8.21 from £7.83 in April 2019.

Fuel duty: Frozen.

Apprenticeships: Contribution of small companies to apprenticeship levy to be reduced from 10% to 5%.

Reaction:

RHS chief horticulturist Guy Barter commented on £10 million funding between 2019-20 and 2022-23 for local community street trees and urban trees announced in the Budget"The £10million for local authorities to plant more trees is a good first step towards greening grey Britain but it might only mean 25,000 are planted in towns and cities as a result of the scheme – just third of the number Manchester City Council already maintains.

"Trees not only hold pollutants, mitigate against noise and provide an invaluable home for wildlife, they can also capture up to 40% from a single rainfall event, reducing runoff and alleviating pressure on drainage systems that can result in localised flooding. However, it is important to consider the right tree for the right place and for councils to choose future-proof varieties – those best equipped to survive increasingly drier summers and wetter winters - work the RHS is already undertaking in its gardens."  

NFU President Minette Batters: "As we move ever closer to leaving the EU, farmers and growers are still seeking assurances and clarity about the environment they will be operating in. In these times of uncertainty, policies that support sustainable farm businesses are crucial.

"The announcement that the Government will introduce a new Structures and Buildings Allowance for non-residential structures has gone some way to meet our call for tax relief on investment in farm infrastructure and will help farmers invest in modern, efficient buildings.

"The NFU also welcomes the increase to the Annual Investment Allowance to £1m but we are disappointed it is time-limited for two years.

"We are pleased to see that there is a significant £200m investment in piloting new solutions to deploy full fibre internet in rural locations. It is vital that this is not a one-off investment and it must be part of a continued effort to deliver better connectivity for all rural businesses.

"According to the latest NFU survey, 59% of farmers felt the broadband speed they received was insufficient for their business. We hope that this investment in the National Productivity Investment Fund will be used to address the digital divide between the countryside and urban areas.

"The announcement today that the National Living Wage will increase by 4.9% is substantially more than the sector expected and comes at a time when farm businesses are faced with a rising cost base. We will continue to engage with the Low Pay Commission on this issue.

"It is vital the strategic importance of the farming industry that provides the raw ingredients for the UK’s largest manufacturing sector, food and drink, which generates £113 billion for the economy, is properly recognised and valued by the Government."

NFU Mutual retail sector specialist Frank Woods said: "The government’s commitment to reduce business rates for the smallest retailers in the UK is welcome, but is not going to satisfy those calling for a more fundamental reform of business rates across the country.

"And while the £900m relief will result in short term savings for the smallest shops across the UK, the larger retailers who employ the majority of people across the sector will not receive a direct benefit from this. And of course it is those larger retailers who have been grabbing the headlines over the past 18 months, for all the wrong reasons.

"For them, the question is whether the additional £675m to be invested in high streets will have any impact at all, especially as many of them rely on out of town retail parks for a large proportion of their sales.

"Taking steps to invest in transformation of city centres supports the widely recognised need for change. Making it easier for properties to be developed as homes to encourage more people to live in central urban areas will also help to build communities in areas where boarded up shops now dominate. Whether it will be enough to staunch the bad news that has been emanating from the sector in recent years is not so clear.

"Minimum wage increases may prove difficult for retailers to absorb, particularly while attracting talent is proving more difficult with Brexit approaching. A freeze on fuel duty will be a relief for those relying on logistics or deliveries."

Tax on plastic packaging  

"The Chancellor announced a new tax on plastic packaging with less than 30% recycled material, continuing the Government’s efforts to make Britain more sustainable. It’s a move that is likely to be welcomed by the public as consumers become ever more environmentally conscious. Producers should be striving toward and beyond this target if they want to keep up and appeal to these customer needs, and retailers will be looking even more closely at their supply chain to ensure they have the right suppliers in place to represent their own values of responsibility. Although the tax is subject to consultation and wouldn't come into effect until 2022, we could find that it puts pressure on those producers that aren’t yet set up or equipped to make this happen, and retailers will want to keep a close eye on recycling research and development, such as the in-store bottle-drop schemes we are already seeing, to demonstrate they are doing their bit towards making Britain more sustainable."  

Digital tax

"While much of the detail is yet to emerge, the degree by which the retail sector in the UK is entwined with online platforms makes for some unpredictable outcomes. Social media platforms such as Twitter and Facebook now provide the entry point for many new starters embarking on a career in retailing, so additional costs may find their way to some of those the Chancellor has been aiming to help in this Budget."

British Retail Consortium chief executive Helen Dickinson said: "The Government has missed a much-needed opportunity to help the retail industry. While we welcome measures to assist smaller retailers, the majority of the UK's 3.1 million retail workers are employed in businesses that will not benefit from today’s business rates announcement. If the Government is to truly back business, it must engage in more extensive business rates reform to help all retailers and their employees through this period of transformation."

On business rates relief for small businesses: "While we welcome the temporary support being given to small businesses, these measures alone are not sufficient to enable a successful reinvention of our high streets. Retailers are currently in the midst of a perfect storm of factors – technology changing how people shop, rising public policy costs and softening demand. Rather than tinkering around the edges, struggling high streets require wholesale reform of business rates in order to thrive. The issue remains that the business rates burden is simply too high."

On the Future High Streets Fund and relaxation of planning laws: "Retailers welcome the measures announced by the Treasury to invest new funding to boost high streets and town centres and facilitate re-invention to modern and diverse destinations. We await with interest further details of the plans, particularly around how the funding will be targeted, who will eligible and how quickly funds will be made available."

On reform of the Apprenticeship Levy: "While the Chancellor’s recent announcement to review the Apprenticeship Levy is positive, retailers need action now before levy funds expire. The Levy is not fit for purpose as retailers are unable to fully utilise funds.  Businesses need the lifetime of funds to be extended while standards are finalised and more flexibility to use levy funds to cover the cost of backfilling roles while apprentices are off the job.  The Budget is a missed opportunity to demonstrate that the government is prepared to work with industry to ensure apprenticeship levy reform is successful."

On taxing plastic packaging: "The UK retail industry is leading the way in protecting the environment by reducing single-use plastic and retailers will welcome the support to make this happen. Retailers recognise how important it is to their customers to tackle plastic pollution, removing it where possible and ensuring all packaging is recyclable. For this tax to make the difference that everyone wants to see, it is essential that the revenue raised is put back into recycling innovation rather than being locked away by the Treasury. Furthermore, Government must work with businesses to ensure the recycled plastic and recycling infrastructure is made available to support efforts to tackle plastic pollution. That is why retailers want to see reform of the recycling system. We need a producer responsibility system that incentives best practice - one that rewards retailers who use packaging that is easily recycled and penalises those that don’t change."

 


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