Well, it’s official! Last week saw the announcement that the UK economy slipped into recession at the end of 2023. The release of economic results confirmed that the UK economy shrank by 0.3% in the final quarter of 2023, after a contraction of 0.1% in Q3 of 2023.
By very definition, a recession is classed as ‘a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
Our latest Quarterly Economic Survey (QES) for Q1, 2024 was launched last week and although we won’t get the results until into March, this QES could provide a useful barometer of the economic outlook from a Staffordshire business perspective.
QES results during 2023 confirmed that many of our hard-pressed hospitality businesses have been locked into a recession for almost four years, when the pandemic unleashed such a devastating impact on the global economy.
The announcement sparked discussion during our Money Matters forum last week. Money Matters forum is tasked with exchanging information on taxation, corporate law and governance, finance, insurance and professional services sector issues. During the meeting, we watched an update from RSM’s Economist Tom Pugh, who suggested that key investment decisions for business relate to labour-enhancing investments and productivity-enhancing investments, with businesses seeking ways to be more productive but without having to hire extra staff.
The Chancellor of the Exchequer (Jeremy Hunt, MP), will announce the Spring Budget on Wednesday 6th March.
We know that a General Election has to take place in the next year and all eyes will be fixed on Mr Hunt, to see if there are any eye-catching announcements to entice voters when the country goes to the polls.
That got us talking about a letter we well be sending to Mr Hunt, with some key ‘asks’ for the business community. Once again, we’ll be calling for a reform of the business rates system. We’re also asking for the VAT registration review to be re-started, with a view to removing the existing ‘cliff-edge.
Chamber research shows that many SME businesses are struggling because of business rates and are limiting their expansion plans because of the VAT threshold. The Chancellor should use his statement next month to announce plans to make business rates fairer and restart the VAT registration review.
Staffordshire Chambers of Commerce has been appointed as the designated employer representative body for the Stoke-on-Trent & Staffordshire Local Skills Improvement Plan (LSIP). We would like to see the Government commit to the funding of business-led Local Skills Improvement Plans (LSIP) beyond the current 2025 cut off point, to at least 2028.
Linked to the topic of skills, we will also ask for the Government to show greater flexibility around the use of the Apprenticeship Levy, to allow for expanded training and upskilling of workers.
What else should we be calling for in our letter to Mr Hunt? I would be interested to get your thoughts on the most pressing issues for our business community. Feel free to get in touch:
declan.riddell@staffordshirechambers.co.uk
I’ve already mentioned the importance of our latest Quarterly Economic Survey (QES) and once again, your views count. QES is the country’s longest-running independent business survey and is recognised by the Bank of England as being of real value in measuring economic performance and business outlook. It takes just 60 seconds to complete a QES, so we would be really grateful if you could click here to complete: https://forms.office.com/e/YyPzHWjeRG
