UK business leaders called Rishi Sunak’s spring statement ‘hugely disappointing’ and ‘light on detail’ as the Chancellor failed to allay fears about soaring inflation and the decline in income.
The economy is expected to grow much slower this year than forecast in October, and businesses battling huge cost increases had hoped for help from the chancellor.
Analysts have warned that failing to put more money in the pockets of households facing their biggest decline in living standards since at least the 1950s would cut spending and dampen the economy.
Claire Bennison, head of accountancy body ACCA, said soaring costs would reduce discretionary spending, particularly affecting small businesses and the hospitality sector.
“With the OBR revising inflation forecasts upwards in 2022, consumer purchasing power may well be further reduced as the year progresses. The ripple effect on well-being and health mental health of an already fragile workforce could intensify.”
Pubs and breweries were among those who criticized the government for not doing enough.
Paul Davies, managing director of Carlsberg Marston’s Brewing Company, said he was disappointed that a 12.5% VAT rate for hospitality businesses had not been extended. The tax was reduced during the pandemic but will go back up to 20% this year.
“With rising energy costs, the burden on the brewing and hospitality sectors has only increased since the pandemic,” he said.
He called for an end to the ‘unfair tax burden’ on pubs and brewers and for a permanent reduction in VAT rates.
Energy-intensive industries have been among the hardest hit by Mr Sunak’s failure to take further action on gas and electricity bills.
The British Ceramics Confederation (BCC) said it was “extremely disappointed but not surprised” at the lack of financial support.
“The government says they hear our words but they don’t really listen,” said BCC chief executive Dr Laura Cohen.
Food & Drink Federation boss Karen Batts welcomed moves to tackle the cost of living crisis, but warned food prices would continue to rise for months.
“In addition, we need the government to consider other measures to reduce the cost of doing business, to help curb rising prices and stimulate growth, such as removing the complexity and costs of coming regulations” , she said.
Karen Campbell-Williams, tax manager at Grant Thornton, said the statement was “light on the details” that will impact most large businesses.
She added: “While the 5p per liter cut in fuel tax for the next 12 months and the £3,000 increase in the National Insurance threshold are welcomed, such measures will not reduce Immediately put pressure on households and businesses facing pressure to raise wages.”
Naomi Phillips, policy director at the Learning and Work Institute, said Wednesday’s statement would not solve problems in Britain’s labor market, including a long-term failure to invest in training and skills.
“When it comes to the labor market, the government continues to ask the wrong question and has failed to meaningfully address the growth of economic inactivity among older workers, people with disabilities and people with health conditions. long term,” Ms Phillips said.
“More support is needed for people who have left the labor market and can return but need to retrain or retrain. Overall, today’s measures do not do enough to help unemployed people weather the cost of living crisis.
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Source: www.independent.co.uk
This notice was published: 2022-03-23 18:22:53
