Industry bosses have reacted after Chancellor Jeremy Hunt revealed his autumn statement, which included a number of measures to slash public spending and raise taxes.
Measures that directly affect employers include the increased minimum wage and freeze on national insurance contribution (NIC) thresholds until April 2028, which will gradually increase costs for employers as pay inflation pushes a greater proportion of payroll above the threshold.
One significant change from April 2023 will be the change in business rates’ calculation. Last updated in 2017, the new rates will mean a steep rise in taxation for many printers, especially those with larger sites and in certain locations, as the government seeks to redress an imbalance in taxation that favours online retailers.
In his statement, the Chancellor said he would freeze the business rates multiplier set by local authorities – currently around 0.5 – which determines the amount of the business’ rateable value that it has to pay to authorities.
The multiplier will be frozen until April 2024. A transitional relief scheme worth £1.6bn was likewise announced to help companies adjust to their new business rates bill.
The transitional relief scheme limits bill increases to a set percentage each year: in 2022/23, for small businesses, bills will go up a maximum of 5% (before other reliefs); for businesses with rateable value of £20,000 to £100,000 it is capped at 15%, and for larger businesses at 30%.
Charles Jarrold, CEO of the BPIF, said: “Changes to the business rates schemes are always a concern, but at least the impact of any increases will be temporarily offset with transitional relief.”
Despite the relief, however, many printers will see their bills go up significantly. One printer’s 13,700 sqm site, valued under the 2017 rates at £283,000, will see its rateable value leap to £460,000, a pre-cap increase of 63%.
Some smaller printers will be better off, though the rate is not consistent: one with a 2,400sqm site will see a rise of just 8%, where one with a 740sqm site will see a 19% rise.
One print boss, speaking toPrintweek,suggested that the new rates calculations might be intended to hit ‘big sheds’ hardest, to target large warehousers like Amazon.
He added that on top of rising costs for paper and energy, this might mean a significant outlay for manufacturing and print businesses.
Dominic Hartley, MD of multidiscipline printer Lexon, will see his business rate value jump by 16%. Even when capped at 15% for a medium business, this means a rise of around £12,000 in value, roughly half of which will be charged as his bill.
He told Printweek: “Unfortunately it looks like our print factory will be hit hard here in Wales, with a 16% increase in the rateable value.”
The budget likewise revealed that the National Living Wage will increase from £9.50 to £10.42 per hour from April 2023.
Brendan Perring, general manager of the IPIA, toldPrintweekthe rise in minimum wage and state pension was welcome, considering the struggle that many workers face in the cost of living crisis.
He added, however: “The reality is, it is going to be difficult for print businesses, many of whom pay unskilled staff minimum wage, with all the other pressures facing them. But I don’t think you’ll find business owners begrudging their staff a raised minimum wage.”
Perring’s major concern, however, was the uncertainty over the future of energy costs after the government’s six-month support scheme ends after March 2023.
“I think there should have been a lot more detail in the statement about business support for industry,” he said, “and the real details about the energy support package.”
While the Chancellor announced a package of support for businesses to continue after the scheme, any support from April onwards will be applied in a more targeted manner following a review in late December.
The BPIF, which has also been in communication with the government about energy prices, is waiting for news, according to Jarrold.
He said: “The support scheme has been vital as increases have been astronomical, so, we’ll be watching carefully to see what happens with the scheme.”
He added: “Overall, the Chancellor doesn’t have any real room for manoeuvre, and it showed in the budget announcements – unfortunately we face an immediate future of tax increases and spending squeezes.
“That seems inevitable to ensure the government retain market confidence, as we’ve seen what happens when that falters.”
For Hartley, too, the budget contained no surprises.
He toldPrintweek: “There was nothing in it that worried me or excited me, because we’ve got this cloud above us of inflation.
“No matter what [Hunt] does in the budget, really, it’s the inflation that’s going to be the absolute killer over the next couple of years and I think that’s my concern above everything else.”