‘VERY few crumbs of comfort’ – that is how business leaders in Coventry and Warwickshire described the Chancellor’s Spring Statement.
The Coventry and Warwickshire Chamber of Commerce’s Spring Statement lunch saw businesses assemble at the Manufacturing Technology Centre in Coventry to watch Chancellor Rishi Sunak deliver his statement on live TV.
The statement did not include any of the British Chambers of Commerce’s (BCC) five-point plan to support firms through soaring energy bills, supply chain issues, and the cost-of-living crisis – which included a delay to the impending 1.25 per cent National Insurance rise by one year, a temporary energy price cap for small businesses, and additional financial support.
While there was no U-turn on the National Insurance rise, Mr 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.
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 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.”
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.”
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.”
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.”