The UK wants to be at the forefront of the technological revolution and this was heavily reflected throughout the Chancellor’s autumn budget announcement placing heavy focus on the car industry, which is set to change beyond all recognition in the next 20 years.
Hammond directly allocated £540 million of the budget to shifting from fossil fuels to alternative fuels – a £400 million pledge to improve electric vehicle charging infrastructure, £100 million as investment for plug-in car grants and £40 million towards electric charging research and development. Additionally, Hammond confirmed charging at work won’t attract income tax via benefits in kind.
The encouragement of driverless cars presents the retail industry with a double-edged sword. Drivers will become passengers, who may well have more time to eat, read and drink on the go, visiting convenience stores en route and perhaps even benefitting from programmed fuel stops. This will require the refuelling network to be ‘connected.’
The question then becomes how the government will roll out these plans and in what timeframe – we already know that by 2040 the Government wants to ban the sale of new cars fuelled by only diesel or petrol. Perhaps, this Budget is the first significant step along this path.
Coupled with discouraging diesel cars through higher Vehicle Excise Duty (VED) and road tax from April 2018 – it’s obvious that the government wants us to be travelling in vehicles that have less environmental impact over the coming years.
The economy continues to grow at a slower than anticipated rate and the government wants to avoid eroding any growth in the significant proportion of the economy that relies on travelling to make a profit. So, freezing fuel duty is a necessity rather than any ‘gift’ to motorists who don’t currently have an economically credible alternative to driving conventionally fuel vehicles.
Tobacco duty is set to increase 2% with an additional 1% duty on hand rolling tobacco. This increase is unlikely to divert customers away from their habit and thus poses little threat to retailers, nor does the announcement of a single-use plastic tax. Small retailers typically produce less waste and tend to embrace change extremely well, adopting a change in best practice often driven by suppliers.
From a general business perspective, the abolition of the stamp duty on properties purchased up to £300,000 (£500,000 in London) for first time buyers should encourage a quicker moving market. Such activity is likely to extend beyond the housing market and into the market for small businesses such as convenience retail.