Policy Spotlight with Rhouda: The cost of living crisis and what the Spring Statement means for Business

Last week, Prime Minister Boris Johnson said that ‘the cost of living is the single biggest thing we are having to fix, and we will fix it,’ – and yet business leaders and organisations such as the Institute for Fiscal Studies have stated that the government has not gone far enough in their Spring Statement to protect those hit hardest by rising costs.

As energy, fuel and food prices continue to surge whilst inflation remains on an upward trajectory, businesses and communities across the country have voiced their concerns on the current financial pressures that they are having to face whilst being offered little support.

In his Spring Statement delivered last week, Chancellor Rishi Sunak announced a cut in fuel duty by 5p a litre until March 2023, a reduction in the basic rate of income tax from 20p to 19p as well as changing the point at which people start paying National Insurance, now increasing to £12,570 in July 2022.

Businesses have welcomed the announcement made by the Chancellor to raise the National Insurance contribution threshold as well as increasing the Employment Allowance. However, as many businesses continue to recover from two years of the Covid-19 pandemic, having to overcome further challenges such as increasing energy costs, skill and labour shortages and supply chain disruptions without more government support is likely to hinder their recovery and ultimately affect the economic development of the country.

Sara Williams, CEO of Staffordshire Chambers of Commerce, said: “Whilst we welcome the Chancellors cut in fuel duty, this will only offer a short-term reprieve for businesses and households. Businesses are facing an insurmountable amount of pressure from the surging costs coming from all directions; and small businesses in particular, are exposed to the rising costs as they lack protection, financial support which has been offered to households and the negotiating power of larger businesses.

“It is disappointing that the Chancellor has missed the opportunity in his Spring Statement to rebuild and renew the economy by tackling the escalating cost of doing business crisis. We now urge the government to take further action in order to help firms protect employee jobs and make investments.”

Chambers across the network will continue to call for government provision of further meaningful action to support businesses which will enable regions across the country to Level Up and Build Back Better. Staffordshire Chambers of Commerce will maintain its collaborations and close work with business leaders in our local area to understand the challenges being faced so that we can lobby for better business working conditions in order to support the region’s economic productivity.

Chamber members are encouraged to attend our business forums which enable businesses from similar sectors to meet and discuss issues relevant to their sector, you can find out more about attending our forums here: https://staffordshirechambers.co.uk/chambers-forums/.

If you want to talk to us about any business issues, you can call our switchboard on 01782 202222.

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