Doncaster Chamber Comments On Chancellor’s Spring Statement
The Chancellor of the Exchequer, Rishi Sunak, has today delivered his Spring Statement to the House of Commons.
This update, sometimes referred to as a “mini-budget”, is typically for keeping the public informed about the state of the UK economy and providing a forecast from the Office of Budget Responsibility (OBR). Generally speaking, it is not used to announce any major tax or spending changes, as these are instead reserved for the full budget in Autumn.
However, owing to a confluence of factors, the Spring Statement for 2022 is a little different. Soaring inflation rates, a hike in national insurance payments, the change to the energy bill cap and increasing fuel prices are all on the horizon and will have a tangible impact on the cost of living and the cost of doing business. As such, the Spring Statement actually lays out some important measures that are being introduced to address these mounting pressures on people and businesses.
Among other things, Sunak has announced that he will be temporarily cutting fuel duty by 5p a litre from 6 p.m. on March 23, to take the sting out of increasingly prohibitive petrol and diesel costs. He has also confirmed that the threshold for paying national insurance will be raised (to £12,570), softening the blow that the upcoming tax hike on April 1 will have on lower earners.
Speaking about the Spring Statement and the implications it has for local businesses, Dan Fell, CEO of Doncaster Chamber, said: “We will take time to digest the announcements and, of course, the devil will be in the detail but - on the surface of it - the fuel duty cut, change to the national insurance threshold and 50% discounted business rates — for retail, hospitality and leisure sectors — look to be positive developments, but even more can be done.
“While the fuel duty cut will help drivers save a few pence in their journeys, about £2 per tank refill, more fuel-intensive businesses will still be taking a massive hit. This is important for Doncaster given the importance of the logistics sector to our local economy. Likewise, although the rising national insurance thresholds will certainly be appreciated by some, the impact on businesses will still be significant.
“Employers, employees and the self-employed will all be paying 1.25% more in national insurance from April. Despite many appeals, the Chancellor has decided not to defer this rise, which could be the final straw for firms that were already struggling with their finances due to the hardships of the past few years. It certainly does not send a signal that the plight of employers in the current circumstances is being heard by central Government.
“This cost will naturally have an impact on the local economy, with people being reluctant to part with their now-even-more-precious income and businesses needing to adjust the prices that they charge consumers so that they can trade profitably.
“At the more positive end of the spectrum, we were also pleased to see the announcement that retail hospitality and leisure sectors will have a 50% discount in business rates, of up to £110,000. This demonstrates that the government is aware of the pressures that some sectors are currently faced with and is trying to help them save money. This does bely the fact, however, that Government still seems to think that the retail and leisure sectors are the only industries facing hard times at present.
“Finally, we did not hear much about the government’s commitment to levelling up. The Chamber will continue to challenge Government on this to ensure that the laudable rhetoric from Government is backed up by concrete action, awarding Doncaster as the home of the new Great British Railways HQ would be a great place to start.
“In short, some of the announcements from the Spring Statement are certainly welcome and will help at the margins; however, by failing to delay the National Insurance hike and by confining help only to discreet sectors, the Government has missed an opportunity to demonstrate pro-business credentials and to show that it grasps the gravity of the situation facing many companies at present.”