This afternoon, the Chancellor of the Exchequer, Rishi Sunak, delivered his Spring Budget in the face of a global cost living crisis and war within Europe.
With high inflation, spiralling fuel and energy costs, a significant level of economic uncertainty and the impending increase in employers’ National Insurance, businesses were hoping that the Spring Statement would provide significant levels of support.
The situation for businesses is made even more challenging as consumers face ever-increasing costs and often difficult decisions about where to spend.
Last week, the British Chamber of Commerce (BCC) called on the government to use the Spring Statement to enact the BCC’s Five Point Plan to Tackle the Cost of Doing Business Crisis:
- Delay the impending National Insurance rise by one year to give firms much-needed financial headroom to weather this unprecedented surge in costs facing businesses and power the recovery.
- Temporary energy price cap for small businesses to protect smaller firms from some of the price increases they would otherwise face, offering the same protection as households.
- Additional financial support, through the expansion of the energy bills rebate scheme for households to also include small firms and energy intensive businesses, a new support fund, administered by Ofgem to support the smallest firms with their soaring energy bills and a six-month extension to the Recovery Loan Scheme, leaving it in place until the end of 2022.
- A moratorium, for the life of this parliament, on all policy measures that increase business costs, including no new business taxes or added regulatory burdens, but excluding only evidence-based changes to the National Living Wage.
- A commitment from the government’s Supply Chain Advisory Group and Industry Taskforce to continue to work with industry to urgently deliver practical solutions to ease the supply chain disruption and labour shortages that continue to drive the upward pressure on prices.
“Sadly, the Chancellor has not taken advantage of these opportunities, with very little for business in today’s announcement,” Cumbria Chamber of Commerce said.
“The fuel duty cut of 5p per litre until March next year is a positive move for both businesses, and consumers but does not go far enough in addressing the fuel price crisis.
“Similarly, the £3,000 increase in the NI threshold to £12,570 is a positive step, but too little to address the challenges.
“The Chancellor promises a range of measures in a tax plan to be announced in the Autumn Budget such as changes to the Apprenticeship Levy, reform to R&D tax credits and a £1,000 increase in the SME Employment Allowance.
Suzanne Caldwell, Managing Director of Cumbria Chamber of Commerce said: “It’s good that there have been some measures to help consumers, but these by no means go far enough. And it’s hugely disappointing that there is virtually nothing for business in today’s announcements.
“The 5p cut in fuel duty will be positive for both businesses and consumers, but it still leaves us with extremely high petrol and diesel prices, and is less than the benefit the government is experiencing through the increase in fuel duty income related to higher prices.
“While the £3,000 increase in the NI threshold is positive, again this does not go far enough. Employers are still facing the impending impact of the increase in employers NI.
“Leaving any real consideration of support to businesses until a Tax Plan to be announced in the Autumn Budget is too late. Businesses need serious help now. While we look forward to promised improvements to the tax system and Apprenticeship Levy, including R&D Tax Credits and investment taxation, this is too far in the future. And the details we understand have yet to be discussed and agreed.
“Other ‘announcements’ such as Help to Grow are not new and do not address the route problems.
“And the £1k increase in the Employment Allowance will have minimal impact.
“The Chancellor has missed a real opportunity to give businesses the help they desperately need.”
