Spring Statement What business leaders want to hear from the Chancellor today
BUSINESSES in the South West are calling for the Chancellor to announce new measures to help with the rising costs of goods and services ahead of his Spring Statement.
Rishi Sunak will unveil his ‘mini budget’ today. He will set out any tax changes and financial support packages, while updating the nation on the state of the economy.
As inflation hits the highest levels seen since 1992, more than half (54%) of South West businesses are urging Mr Sunak for help to ease cost burdens, according to new research.
Businesses are appealing for direct help with energy bills as well as a reduction in VAT and funding to help create jobs and develop skills.
Rising prices remain a key challenge for businesses in the region, according to a report by Lloyds Bank. More than a fifth (22%) of businesses are concerned about having to increase the costs of goods and services, while a quarter (24%) said inflation was reducing profitability.
Amanda Dorel, regional director for Lloyds Bank in the South West, said: “It’s vital firms receive adequate help with the rising cost of day-to-day operations so they can fulfil their post-pandemic growth plans.”
The Post has spoken to a number of businesses about what’s on their wishlist.
Business West
Ian Mean, Business West’s Gloucestershire director, said: “Business desperately needs a modicum of good news.
“Companies are facing sky high interest rates and struggling with equally rocketing energy bills. And their employees are facing increased national insurance contributions from the end of April alongside steep rises in home heating bills. Despite criticism from his own party, Rishi Sunak shows no sign of postponing the national
insurance increase. The only chink of relief here is that the Chancellor might well wipe out the tax rise for lower-paid workers. This would allow him to say that no worker earning below the median national wage of £27,500 would lose out financially from the tax rise.
“Fuel rises are hitting business very hard. Rishi Sunak is under huge pressure to cut fuel duty to counter record prices at the pumps. He could cut duty by 5p per litre, but probably only for six months. I paid £102 to fill the car with diesel at the weekend.”
Self-Employed Mortgage Hub, Bristol
Graham Cox, founder of SelfEmployed Mortgage Hub, said: “There are three things the Chancellor should do. First, implement a windfall tax on the North Sea oil and gas companies. They are making enormous profits off the back of soaring energy prices, which could cost the average consumer £3,000 a year by late 2022.
“In these extraordinary times, when people are having to choose between heating or eating, a windfall tax is the obvious and right
thing to do. Unsurprisingly, Rishi Sunak seems ideologically averse to the idea, but ideology isn’t going to keep people warm and fed next winter. Second, ban the purchase of UK properties by foreign investors unless they plan to reside in the UK full-time.
“And third, make it prohibitively expensive through higher stamp duty and/or capital gains tax to buy a second property or holiday home. It needs to be discouraged as it prices out local residents from having the chance to buy.”
MHA, South West
Chris Barlow, partner at MHA, said: “The UK manufacturing sector urgently requires more longterm incentives to boost investment. The Spring Statement needs to be the time to get the ball rolling on this because a series of damaging tax changes are currently heading businesses’ way. Some will come into effect in April, like the national insurance rise, while others are pencilled in for March 2023, such as the rise in corporation tax.
“In addition, the sector continues to be hit hard by persistent supply chain issues, worsened by Russia’s
invasion of Ukraine.”
Mr Barlow said the suspension of the national insurance rise was “the most pressing action” the Chancellor needed to take.
He added: “It is vital to ensure funds are invested in plant, machinery and buildings, which will safeguard and create jobs. However, Rishi Sunak also needs to go further. He should announce long-term incentives to support manufacturing businesses to invest and plan for the future. One way he could do this would be to extend the super-deduction to allow for longer term planning.
“Long-term reliefs are also absolutely necessary for businesses to pursue programmes towards decarbonisation and net zero, especially as the UK commits to reducing its greenhouse gas emissions by 2050. A widening of tax incentives for energy efficient assets is crucial, especially for SMEs who usually struggle to stay ahead of the curve when it comes to reducing emissions.”
KM Holdings Group, South West
Murray Ambler-Shattock, strategic operations, research development and innovations manager, called for the following:
“A ‘big energy business’ windfall tax on the massive profits made at the expense of the beleaguered British public, who can presently hardly afford to heat and light their homes, and for businesses that are struggling to afford to produce and distribute their offerings
“Strict measures to regulate fuel retailing pricing behaviours.
“Financial recovery actions against Covid measures loan fraudsters and against parties involved in unsuitable PPE that cost and wasted billions of taxpayers’ money
“Road Fund Licence fees replaced with a levy on fuel and on charging energy purchase instead of fixed cost tax per vehicle.
“Recover furlough money from any firm that made substantial profits during the pandemic but still claimed furlough, as they clearly didn’t need it.
“Move the Red Diesel Rebate being abolished onto green fuels, such as HVO.
“Abolish IR35 and allow business and organisations to easily hire in the skills and experience they need for growth and development
“Provide innovation loans to businesses to develop fresh new approaches to problems and drive innovation forwards.
“Second homes and/or holiday homes must be purchased as a business operated via a limited company and let to third parties for at least 50% of the year.”
Manning Gee Investments, Bristol
Samuel Gee, director at Bristolbased Manning Gee Investments, said: “The Chancellor is facing his Everest. He is facing challenges from so many angles that this will need to be one serious Spring Statement to inject confidence into the economy. The national insurance increase needs to be kicked into the long grass, or the increased pressure on employers and employees alike will be brutal. Confidence among businesses is extremely low and Rishi Sunak needs to rekindle that or we could soon be entering recession.”