Chancellor’s NI cut prompts optimism about consumer spending

Health Stores UK shares the view of the wider retail industry that Chancellor Jeremy Hunt’s 2024 Spring Budget offers some grounds for optimism. But the Association is concerned that longer term prospects for independent retailers remain challenging, and it is calling on the Government to review its support for these vital businesses. 

Key measures in the Spring Budget include:

  • A 2p cut in the main rate of National Insurance (from 10% to 8%)
  • A 2p reduction for self-employed National Insurance contributions 
  • A rise in the VAT registration threshold from £85K to £90K
  • Fuel Duty to be frozen for another year, while a 5p cut to fuel will be maintained
  • The post pandemic Recovery Loan Scheme (now known as the Growth Guarantee Scheme) has been granted a further £200M in funding to help up to 11K small businesses

The Treasury estimates that the cuts in National Insurance rates will save an average worker (on £35,400) around £900 annually. Meanwhile, an average teacher (earning £44,300) will gain £1,250 per year. 

Commenting, Health Stores UK chair, Len Glenville, said: “We hope that these positive impacts on personal finances will translate into higher consumer spending on local high streets. However, as latest figures from the Office For Budget Responsibility show, the general picture for living standards remains downbeat, with households expected to be worse off at the next general election than they were at the last. 

“These conditions will make it difficult for many smaller retail businesses to survive. Given the huge contribution to local economies that independent retail businesses make, Health Stores UK will continue to call for targeted support from Government to make business costs more manageable for independents and create an