Paul Baker is founder of St Pierre Groupe – the UK’s fastest growing branded bakery business. Turnover exceeded £100mn in 2020 and the three brands in its portfolio are distributed through retail, wholesale and foodservice channels. In response to the Budget announcement today, Baker commented,
“The past 13 months have challenged all of us and I don’t think anyone envies the role of Rishi Sunak today. That said, I am encouraged to see more bespoke support for an industry which has not wavered despite the challenges thrown at it.
“The UK food and drink industry as a whole contributes £121 billion to the economy in normal times – almost 10 per cent in 2018. Whilst the nation is told to stay at home, those who work in the food and drink industry continue to work relentlessly to ensure the food supply chain keeps moving.
“Additional pressure has been put on supermarkets to feed the nation and the hospitality sector has been left in tatters. So, to see special measures announced for the hospitality sector, in particular, will provide a glimmer of hope for many UK businesses. The restauranteurs of this country were responsible for £24bn revenue in 2019, boosting other industries such as tourism and leisure – it’s great to see a Government acknowledging their contribution and working to protect them.
“The extension of VAT reduction is a lifeline. Cut Tourism VAT Campaign warned that VAT rate reverting to 20% in April would mean the loss of 310,000 more jobs in hospitality and tourism, so it’s a relief to many to hear VAT will remain at 5 per cent. The gradual return to 20% over 12 months will also take the pressure off.
“Hospitality operators have been well supported with an extension to the holiday on business rates. Last year, that holiday negated the economic impact of the virus by £10.13bn, money that many operators would struggle to find – especially whilst they’re unable to open up again until later in the year. My only criticism of this, is the gradual increase from June. Despite the roadmap, businesses have a lot of lost time to make up for and whilst it displays confidence in a return to ‘normal’ from June, many businesses will still struggle to manage even the proposed third of the business rate after spending more than a year unable to operate.
“Admittedly, it’s encouraging to see that no major increases on corporation tax will be introduced until 2023. The dichotomy of increasing corporation tax to protect the voting public, balanced against the need to engage big businesses who will be relied upon to save and create millions of jobs over the coming 12 months, is no doubt a difficult juggling act.
“Today’s budget had to deliver confidence for businesses and the announcement of the ‘Super Deduction’ is evidence of its aim to do exactly that. Businesses, particularly those like our own which drive international growth, taking British brands abroad, are ready and willing to invest and the super deduction certainly looks as though it will be easier to commit to doing so.
“Whilst I suspect we’ve not yet heard the last of plans to recoup the costs of this crisis, I commend the decision not to pull back support just yet. We’re not out the other side of this and to try to claw back costs now could jeopardise the long road back to ‘normal’. We recognise, as a leading food and drink business, that we have a key role to play as part of a national effort to bounce back. St Pierre Groupe doubled its headcount during 2020 and has no plans to slow down, providing roles and support for the industry when it needs them most. The best Government can do for the time being, is to support businesses who will be key to economic recovery”.