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What does Rishi Sunak’s autumn budget mean for marketers?

What does Rishi Sunak’s autumn budget mean for marketers?
Written by publishing team

British Finance Minister Rishi Sunak has revealed his fall 2021 budget amid rising energy prices, supply shortages and inflation on track to hit 4%.

Coated as a budget to shape a post-pandemic economy, the headlines included cuts to universal credit, alcohol surcharges and the local air passenger tax.

During his speech to Parliament, Sunak said he will act if inflation rises beyond the current 3.1%. The chancellor claimed he wrote to the Bank of England “to reaffirm its competence to achieve low and stable inflation”.

“I understand that people are worried about global inflation, but they have a government here at home that is ready and willing to act,” he said.

On the back of inflation, the government expected UK gross domestic product to expand by 6.5%, revised from the 4% forecast in the March budget.

The fall budget also included several policies that would directly affect the marketing and creative industries.

Hospitality Relief Packages

The government will halve business rates for 12 months for companies operating in the retail, hospitality and leisure sectors, up to a maximum of £110,000.

The chancellor claims the measures could cover up to 400,000 companies (90%) in the hospitality and retail sector and worth £7 billion over five years.

There was an obligation to review the online sales tax, which would reduce business rates for online retailers.

Sunak has announced a set of alcohol duty reforms, which include lowering duties on fine sparkling wine and fruit juice and introducing a “small producer exemption”, reducing fees for small brewers. Meanwhile, high strength alcohol is set for higher while lower strength will be reduced.

There is also a “draft relief” targeting pubs and bars, which will mandate a 5% reduction on draft beer and cider served from draft containers over 40 liters.

training and development

The government will transfer £1.6 billion into the new T levels, which could put an additional 110,000 students aged 16-19 through the apprenticeship programme. T-Levels, which is in its second year, includes courses in digital production, design, and digital business services.

An additional £500m (29% increase) was made available for adult skills to give more adults access to Level 3 courses and expand skills training programmes. In the £500m range, the government plans to launch an adult account program designed for flexible education.

Another £170m was directed towards apprenticeships, along with a commitment to improve employability for SMEs and an extension of the £3,000 apprentice recruitment incentive.

loans and investment

The government has extended a temporary annual investment allowance of £1m until March 2023 making ‘tax simpler’ for companies investing between £200,000 and £1m.

The Covid recovery loan scheme has also been extended until June 2022, providing up to £2m for recovering businesses, however the government guarantee has been reduced from 80% to 70%.

The Help Grow Pool was created to provide training and digital support to 100,000 SMEs, along with a startup loan program to fund up to 33,000 entrepreneurs.

Minimum wage increase

From April 2022, the national living wage will rise to £9.50 an hour from £8.91 for workers aged 23 and over. There are additional plans to increase wages for those under 23 and trainees.

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