Spring Statement 2022: business leaders react
Chancellor Rishi Sunak’s Spring Statement has been given a broad welcome by East Midlands business leaders, but most recognised that he could’ve done more.
Ravi Anand, managing director, SME lender for mid-sized businesses, ThinCats, said: “Understandably, the focus of today’s Spring Statement has been on supporting individuals and families manage the cost of living.
“Businesses will welcome the measures including the reduction in fuel duty, increase in the Employment Allowance and business rate relief. Most are aware and wary that inflationary costs will have to be passed on to their customers, so anything to reduce the pain is helpful. There is of course an interest in improving productivity and reforming business taxes, but we will have to see the detail when it appears.
“More generally, as we have moved out of the immediate health emergency, most companies I speak to recognise that the Government has provided a huge amount of support since Covid and their focus now is 100% on growth.”
Federation of Small Businesses (FSB) development manager Natalie Gasson-McKinley, said: “We are very pleased to see the Chancellor adopting our top ask for this Spring Statement: uprating the Employment Allowance to help small employers with national insurance costs.
“We originally put forward the Employment Allowance as a targeted measure to help small firms, and it has now been expanded three times since its creation.
“Together with a cut to fuel duty, these measures will provide crucial breathing space for our embattled small employers.”
East Midlands Chamber chief executive Scott Knowles said: “It’s clear from the Chancellor’s warning about the ‘unusually high uncertainty’ around the economic outlook – coupled with confirmation that inflation rose by 6.2% in February and will hit a projected 7.4% in 2022 – that businesses and communities should prepare accordingly for a continuation of the spiralling price rises over the coming year.
“Despite acknowledging these challenges, there wasn’t anything significant for firms to grasp as a potential route out of a renewed economic crisis that still lingers on the horizon.
“Small businesses will welcome a lift to the employment allowance, which should make a little room at the margins.
Anything that can help in this regard is important, given that cashflow fell into negative territory for the first time in over a year for East Midlands businesses in our latest Quarterly Economic Survey for Q1 2022, with staffing among the resources growing increasingly expensive, just behind raw materials and energy.
“For individuals and families, the temporary fuel duty cut and raising the national insurance threshold offer a small alleviation in tackling the escalating cost of living crisis in the short term.
“But the biggest changes appear to have been put back until the autumn – when the investment gap in R&D, capital and people compared to other major economies will be addressed to support productivity growth – or even further down the line with the 2024 income tax reduction.”
