Economy
Only crumbs of comfort in Spring Statement Business leaders from across Coventry and Warwickshire say there were ‘very few crumbs of comfort’ in the Chancellor’s Spring Statement.
That included pleas for a delay to the impending 1.25 per cent National Insurance rise by one year to give firms much-needed financial headroom, a temporary energy price cap for small businesses, and additional financial support. While there was no U-turn on the National Insurance rise, Sunak announced the threshold will rise for individuals by £3,000, while a fuel duty cut of 5p per litre until next March has also been introduced to combat supply issues arising from the invasion of Ukraine.
Tim Squires, Commercial Director at Squires Gears Manufacturing, said: “The only real positive from a manufacturing point of view was in regards to fuel. “It is a slight bonus that moving goods around is going to be slightly cheaper but other than that I am scratching around to see if there are any other positives.”
The Coventry and Warwickshire Chamber of Commerce’s Spring Statement lunch, sponsored by Prime Accountants Group, saw businesses from a range of sectors assemble at the Manufacturing Technology Centre in Coventry to watch Chancellor Rishi Sunak deliver his statement on live TV. There had been calls for the Chancellor to take decisive action to help tackle the escalating cost of business, backing the British Chambers of Commerce’s (BCC) five-point plan to support firms through soaring energy bills, supply chain issues, and the costof-living crisis.
vulnerable taxpayers, it may not be enough for businesses, especially in light of inflation. The National Insurance increase is still going ahead and corporation tax increases seem to still be coming.”
David Burton, chartered accountant, said: “The other thing is exchange rates. When we look at the price of fuel, we are looking at a commodity that is priced in dollars and the exchange rate has shot up considerably. The 5p in fuel duty is visible but it is not huge.”
The Coventry and Warwickshire Chamber of Commerce’s Spring Statement panel
But businesses questioned whether enough had been done to tackle rising inflation and support industry through looming challenges. Steve Harcourt, director of Prime Accountants, said: “From a personal point of view what the Chancellor has done today has helped working people and families and hopefully battle the cost-of-living crisis. “It is difficult to know where it is going because of the situation in Ukraine. We rely a lot on importing raw materials and produce from that area so there will still be a big cost of living rise ahead.
“As we thought, National Insurance increases have not been postponed, although the thresholds have increased. So, there does not seem to be much to help businesses from today. That may come in the autumn when he has an idea with the tax incentive and savings, but there is no clear plan at the moment.” Claire Lea, Tax Director at Prime Accountants Group, said: “He has announced an increase in the National Insurance threshold from July which is later than the planned National Insurance increase from April. “While that will help a lot of households and potentially more
Louise Bennett, Chief Executive of Coventry & Warwickshire Chamber of Commerce, said: “I do not think we should be surprised that it was not a budget for businesses. In fact, here are very few crumbs of comfort as businesses face increased costs left, right and centre. “At a time of economic challenge for the whole world, we do understand the Chancellor’s cautious approach to the public finances. While we could point to areas of current policy and continue to ask for further support, we do understand that the Chancellor has to balance the levers of public spending at his fingertips. “A balanced approach will help get inflationary pressures under control and also ensure that the Treasury has more room for manoeuvre if the situation gets any worse.”
Businesses under pressure latest stats reveal Business leaders in Coventry and Warwickshire say a slowdown in economic growth highlights the pressure firms are under.
“But, due to a range of circumstances, companies are having to deal with a whole host of factors that are making it more difficult for them to grow.
GDP – the measure of economic output – grew by 0.1 per cent in February compared to 0.8 per cent in January.
“The cost of doing business has rocketed and we heard from the Bank of England recently that inflation is yet to peak.
Sean Rose, head of policy at the Coventry and Warwickshire Chamber of Commerce, said businesses across the patch were facing a range of issues that are holding back stronger growth.
“The latest GDP figures are a sign of the pressure that companies are under and we’d urge firms to make sure they are in touch with the Chamber to see what help they can get to support their growth.”
He said: “Businesses were hopeful that the beginning of this year would see a return to stronger growth as Covid-19 restrictions were being lifted.
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Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said: “While economic output continued
to rebound in February, the significant slowdown in growth indicates that the UK economy was losing steam even before the impact of Russia’s invasion of Ukraine.
of considerably weaker growth as rising inflation, surging energy bills and higher taxes increasingly damages key drivers of UK output, including consumer spending and business investment.
"Tourism-related industries and accommodation services recorded the strongest improvements in the month at the end of Plan B restrictions, and reduced concerns over Omicron, supported activity. However, this was mostly offset by a significant drop in NHS Test and Trace services and vaccine activity as well as declines in industrial and construction output.
“Weakening health sector output following the end of free Covid testing and mass vaccinations, is also set to weigh on UK GDP in the near term.
“February’s slowdown is likely to be the start of a prolonged period
“The Government must provide urgent financial support, through the expansion of the energy bills rebate scheme, to include small firms and energy intensive businesses, and an SME energy price cap to protect smaller firms from some of the price increases.”
www.cw-chamber.co.uk
