Energy measures ‘barely scratch the surface’ for low income families
THERE was a mixed reaction from business leaders across the West Midlands with some saying the Chancellor’s Spring Statement barely scratched the surface of what was required while others said they were welcome steps.
Among the key issues highlighted was soaring energy prices and tax rates on business investment.
■ Paul Breen, managing director of Solihull-based affordable housing specialist Living Space, welcomed measures to help tackle the cost of living crisis, but said: “This is barely scratching the surface of the current issues.
“Soaring energy price rises are hitting those on low incomes disproportionately.
“Far more needs to be done to prevent more households from falling into spiralling debt by simply using their cars and heating their homes.
“With appropriate funding, the affordable housing sector can lead the way in decarbonising the UK’s housing stock.”
■ Henrietta Brealey, chief executive of Greater Birmingham Chambers of Commerce, said: “Did the measures announced in the Chancellor’s statement go far enough to tackle the rising cost of doing business crisis? No.
“There were welcome elements to the measures announced such as raising the threshold for NI contributions and increasing the Employment Allowance. However, businesses are still faced with increasing costs from energy prices, talent and labour shortages, supply chain disruption, VAT for hospitality returning to 20% and rampant inflation with key sectors still needing time recover from two years of Covid-19 pandemic.
“Meaningful action cannot wait for next big fiscal event – the Autumn Budget. If the government is still serious about Building Back Better and Levelling Up it needs to back the wealth generators and engines of economic and jobs growth – our businesses.”
■ Clive Hickman, chief executive of the Manufacturing Technology Centre (MTC) in Coventry, welcomed the “concrete steps” to ensure the region’s manufacturing sector remained competitive, sustainable and resilient.
“The Government’s commitment to cut tax rates on business investment will boost manufacturing productivity and create high-quality jobs,” he said.
“In addition, the reform to R&D tax credits is a very positive step that will enable the scheme to be more effective, better value for money, and more generous.
“These measures will be crucial to spur innovation and encourage investment across the region.”
■ Russell Luckock is chairman of Birmingham pressings firm AE Harris and a regular Birmingham Post columnist.
He described it as a “clever budget politically” but warned that, while the immediate cut in fuel duty would help now, it would not match the actual increases in prices and the general rise in the cost of travel.
“The National Insurance threshold increase is designed to soften the blow of the forthcoming levy but will not take the pain away, nor will the income tax thresholds cover the shortfall,” he said.
“The VAT cuts will help industries involved with the manufacture of solar panels and wind turbines.
“However, with inflation now at 6.2 per cent and forecast by the OBR to be 8.4 per cent, for most households it will mean belt tightening.”
■ Chris Romans, head of tax for financial services firm EY in the Midlands, said the absence of a formal Budget was no reason for the Chancellor to avoid making changes.
“There was not a single tax rise in sight. The immediate cuts were focused on today’s sources of pain – that of fuel duties – matched with commitments to allow the Chancellor to maintain credibility in the journey to net zero. “Beyond this, the measures were few but targeted.
“The Chancellor spent much of his speech in design mode, setting out his aspirations and announcing the publication of his 11-page tax plan, replete with potential costed announcements.
“This is a positive step forward, providing a forum for engagement, and avoids the criticisms of the previous business tax roadmap which was more of a travel journal covering the past than a vision of the future.”