Businesses have criticised a “jam tomorrow” Spring Statement that did little to alleviate the heavy pressure many companies in the UK are under from rocketing inflation and energy costs.

Employer groups had urged the Treasury to support businesses with immediate tax cuts and energy allowances to protect them from spiralling costs and to stimulate growth.

Stephen Phipson, chief executive of manufacturers group Make UK, said that businesses were “facing eye watering cost increases that are pushing many towards a tipping point and companies would have been looking for substantial business support measures to help alleviate these”. 

He described the lack of action on energy costs for business as “especially hard to fathom”, adding: “The promise of jam tomorrow with consultations through the summer and action in the autumn will also be of little comfort for many who would have liked to have seen action and support immediately.”

Make UK had urged chancellor Rishi Sunak to delay the planned national insurance contribution rise and reinstate business rates relief for small businesses.

John Dickie, chief executive of lobby group London First, described the statement as “sticking-plaster measures that will do little to stem the pain” of rising costs.

The CBI, the UK’s largest employers group, has warned that the economic effects of the Ukraine conflict were being felt across swaths of the economy, but especially for smaller companies outside of the energy price cap and those in energy intensive industries.

Tony Danker, CBI director-general, said that the plans laid out by the chancellor were welcome “but don’t do enough to tackle the current challenges facing firms”.

He added: “In reality, we cannot wait until October to get growth going. The government needs to get moving straight away. We need concrete plans now on how we get new nuclear, hydrogen and onshore wind investment. We need more EV charging infrastructure. We need post-Brexit regulation changes.”

Arjan Geveke, director of the Energy Intensive Users’ Group, called the statement “disappointing” due to the lack of support to help businesses with soaring energy costs.

“The statement could have included measures to reduce industrial energy prices that would support energy intensive industries to invest and create jobs.”

The Federation of Small Businesses wanted the chancellor to cut fuel duty, help small companies with energy bills and reform business rates to take more companies out of the system in levelling up areas.

However, it did welcome the chancellor’s move to increase the employment allowance to £5,000. This relief, which allows eligible businesses to reduce their employer national insurance contributions (NICs) bills each year, will help about 495,000 businesses.

Martin McTague, FSB national chair, said that alongside a cut to fuel duty, “these measures will provide crucial breathing space for our embattled small employers”.

Business leaders across the hospitality sector also sounded widespread disappointment that the chancellor had not made the much-hoped for announcement that the reduction in value added tax for the sector would be maintained beyond the end of March.

Kate Nicholls, chief executive of UKHospitality, said that a return to the full 20 per cent rate in April was a “real setback” for the sector. “For many businesses, the removal of the lifeline of a lower rate of VAT might prove fatal,” she said.

Peter Borg Neal, executive chair of Oakman Inns, said simply: “April is going to be ugly.

“It just seems to be like [costs are] coming from every direction. The only hope for operators will be hanging on to market share while other people close or stop their investment. It all feels very negative,” he added.

Tech groups were also upset after the Spring Statement confirmed that the government would not reform a share options scheme to make it easier for start-ups to attract talented workers.



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