A budget of boom and bust: A bit of boom for operators, and a supply chain with credible fears of going bust

Rishi Sunak Budget speech
Rishi Sunak Budget speech ┬®UK Parliament_Jessica Taylor
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Every chancellor expects a good kick-in after delivering a Budget Statement, but while Rishi Sunak was able to throw enough money at the rabble to soften the blows, there were still hefty punches to be landed. Among those weighing in were Bacta whose rage has been fuelled by the continued and consistent dismissal of any support for the supply chain.

 

For businesses in the supply chain, this week’s budget was further proof that a government which said it would do whatever it takes, has actually chosen to take whatever they’ve got. For the past year, the supply chain in the amusements and gaming sector has received no targeted support, and that will remain the case for at least another six months.

Rishi Sunak’s budget was not good news for machine distributors and suppliers, nor the service sector that supports the industry. Trade association Bacta were despairing. The chancellor, they argued “was totally silent on support for supply chains. That is a huge oversight and jeopardises the recovery.”

The Gambling Business Group, BALPPA, the Federation of Small Businesses and a host of other trade bodies echoed this view, as did leading international groups Merkur Gaming UK and Novomatic, and experienced suppliers such as Reflex, Electrocoin and UDC.

It was definitely the bum note in a Sunak budget that relied heavily on the chancellor’s greatest hits: extended furlough, extended business rates holiday, extended 5 percent hospitality VAT, restart grants of up to £18,000.

In fact, Sunak offered another wad of loadsamoney, which has been gratefully received, and universally praised.

For seaside operators, the budget was greeted with enthusiasm. The prospect of not having to pay business rates until June and then discounted heavily through to next Easter, and the salivating prospect of a five figure restart grant, will certainly warm the spirits. But the optimism comes as much from the upcoming seaside holiday boom and a public desperate to party, spend money and likes to be beside the seaside.

Paolo Sidoli of SB Machines noted: “On balance, the news is excellent. Leisure, catering, hospitality and amusements have suffered disproportionately but a continuation of these support packages is really good news.”

As is the innovative super deduction initiative where, for the next two years, companies that invest in new equipment can offset all of the cost against tax, plus an additional 30 percent. Whilst the detail is yet to be released, the super deduction could be the one life saving chink of light for the machine manufacturing and supply sector.

But, operators will need to move fast – the deduction is valid for two years – just in time for the rise in corporation tax to kick in at 25 percent in 2023.

The cash sector might also need to move with haste. Take note: this budget could be a defining moment in the history of cash in the UK. The decision to raise payment limits to £100 on smart cards is another giant leap on the road to cashless.

Returning to direct wins, for Bacta unfortunately, there were none. But this will come as no shock to the association; its targets were pretty ambitious. Bacta’s bid for an MGD cut to 5 percent had already been turned down by the Treasury, on numerous occasions. But it still remains an objective, as will efforts to include seaside amusement arcades in the 5 percent VAT relief.

What will irk though, is the decision that gaming duties will continue to rise in line with RPI, whilst other taxes such as beer duty, have been frozen.

All in all, it was a budget that did little for the amusements and arcade sector directly, but it will significantly benefit many businesses around the industry who fit into the government’s support net.

Unfortunately, there remains thousands and thousands of people in the supply chain who have fallen through that net for over a year. This budget did nothing for them, except put them closer to the edge.

As Bacta noted that is “economically illiterate”.


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