Bulletin: Budget, Get Britain Working, new tariffs

Budget impact

A post-Budget survey amongst business conducted by the CBI has revealed that nearly two-thirds of firms reported that the Budget will damage UK investment with half of firms looking to reduce headcount as a result.

The Office for Budget Responsibility expects that the Budget changes will be inflationary.

Read our article: Food inflation may return soon

Get Britain Working

The government has published the Get Britain Working white paper with the ambition to increase the employment rate to 80 per cent (compared to 74.8% currently), backed by £240m of investment. Currently 2.8 million people are out of work due to long-term sickness and one in eight young people are not in education, employment or training. Key measures include:

• A new Youth Guarantee to ensure every young person has access to education or training to help them find a job

• Transforming the Apprenticeship Levy into a more flexible Growth and Skills Levy

• Mental health support to be expanded

• Extra staff to cut NHS waiting lists in areas of high inactivity

• Jobcentre system to be transformed into national jobs and careers service, focused on people’s skills and careers

IGD opinion

There is no doubt that economic inactivity is a major concern as it means a loss of economic productive capacity. There is a link between poor mental health and unemployment or low earnings.

As the largest private sector employer, the food industry has a proud track record of helping people into work, through initiatives like the Mmmake Your Mark campaign and employability skills training, which has inspired and upskilled over 100,000 young people. The Get Britain Working white paper presents exciting opportunities for this vital sector to deepen its collaboration with government and drive even greater efforts to support more people into employment.

Tariff warning

US president-elect Donald Trump has warned that he will sign an executive order imposing a 25% tariff on all goods coming from Mexico and Canada. He also said “we will be charging China an additional 10% tariff, above any additional tariffs” until it takes action against fentanyl smuggling.

IGD opinion

The aim of these tariffs is to deal with the issues of illegal migration and drug smuggling rather than protecting US industry. This still elevates the risk of new trade disputes, however. Mr Trump enacted protectionist measures in his last term as President and he remains an advocate. He has suggested tariffs on imports from other countries, which would affect all countries without a trade deal including the UK and would almost certainly provoke retaliation. This has the potential to impact pricing on a global basis.

Loyalty cards

The Competition and Markets Authority (CMA) has published findings from its review of loyalty pricing in the groceries sector. Key findings include:

• Loyalty scheme members can almost always make genuine savings. “This should give shoppers confidence that they are not being treated unfairly”

• Shoppers without loyalty scheme membership are generally paying the same price during the loyalty price promotion as they do in the weeks both before and after loyalty price promotions

• All supermarkets with loyalty schemes are encouraged to review their practices and ensure all of their promotions comply with consumer law

Understand what is the future of loyalty schemes with The loyalty cycle report (for IGD Retail Analysis subscribers).

Winter fuel payments

The Scottish government has announced that they will provide winter fuel payments for every pensioner household in winter 2025-26. There will be payments of either £200 or £300, depending on age, for pensioners in receipt of a relevant qualifying benefit.