Treasury sources have suggested that the Chancellor is planning a ‘slimmed down’ Spring Budget on March 15th, with no tax cuts. Instead, stabilising the economy and boosting growth will be top priorities as the government seeks to reestablish confidence within the business community.
Warehousing is an important part of that business community. One of the fastest growing sectors in the UK, warehousing and logistics contribute £139 billion Gross Value Added (GVA) to the UK economy, with an estimated one in ten workers in the private sector employed within the industry.
Accordingly, UKWA has prepared a Spring Budget submission with four key proposals:
Business Rates are unfair to Warehousing:- From April 2023, many warehousing firms will see substantial increases to their business rates. The government’s intention here is to address the perceived imbalance in taxation between online retailers and ‘bricks and mortar’ sales, yet not all warehouses are involved in online retail.
Moreover, to base the valuation date on April 2021 is unfair. During the pandemic, demand for warehouse space soared against other commercial property such as shops and offices, making warehouse property values disproportionately high. So we are asking the Chancellor to reconsider how business rates are calculated for warehouses and to increase the level of transitional support.
The untapped potential of solar:- Our 2022 research identified that if just a fraction of the UK’s largest warehouses installed solar panels, we could double the UK’s current solar power capacity and deliver against decarbonisation.
Currently, solar panel investment attracts a 50% first-year allowance for special rate assets, known as ‘super deduction’. However, this is due to end next month. UKWA is therefore calling for this important tax-break to be extended to at least 2030. Warehouse businesses need the incentive to improve their own energy sustainability and affordability, while supporting the government’s wider net-zero objectives.
Extending Energy Bill Relief:- The Energy Bills Discount Scheme (EBDS), which was announced in January, continues energy bill support for businesses, but at a reduced rate. While this has provided some welcome certainty for some businesses, the significant drop in support from the end of March raises concerns over how others in the sector will cope.
Temperature-controlled warehouses, for example, use considerably more energy during the warmer months to power their cooling systems. The growth of robotics and automation is creating more demand for electrical power too, and this looks set to grow further with the introduction of more electric vehicles into logistics operations. Therefore, we want to see more support in this area for warehousing.
Support for skills:- The significant investment of the sector in the successful Generation Logistics campaign, supported by the Department for Transport, has already paid dividends. It has helped raise the profile of our industry and attracted workers to the sector. We believe it is deserving of government’s continued support and this is our final plea to the Chancellor.
The Spring Budget is an unmissable opportunity for Government to empower warehousing businesses to drive growth, contribute to decarbonisation, control energy costs and support the levelling up agenda.
Clare Bottle
UKWA, CEO
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