Business leader says Chancellor fell short for ailing firms

Chancellor Rishi Sunak has come under fire from a Peterborough business leader for not doing enough to help struggling companies.

Vic Annells, chief executive of Cambridgeshire Chambers of Commerce, said the Chancellor’s Spring Statement had fallen a long way short of taking the necessary action to help businesses as they fend off challenges from rising inflation, rising fuel costs, supply chain difficulties and uncertainty around the Ukrainian conflict.

He said: “Businesses need confidence if they are to grow and the Spring Statement did not give them confidence.

“We already know that one in five small businesses are considering reducing staff numbers. A lack of confidence will not encourage them to invest,

“Inflation, which is now at 6.2 per cent, is expected to hit nine per cent. Businesses cannot swallow that increase. I expect at least 73 per cent of companies will need to raise their prices.”

Mr Annells said: “There is really nothing in the Statement that anyone said they wanted.

“Small firms wanted action on energy prices. They can’t keep paying energy bills that have no upper limit.

“One Huntingdon company has already seen its energy bill rise from £14,000 a year to £46,000 a year.”

He said while the fuel cost reduction was welcome, it would soon be swallowed by rising prices.

And while the threshold for National Insurance was raised for employees there was no change for businesses, which also pay the tax. A ray of hope was a 50 per cent business rates reduction for the hospitality and leisure sector.

Spring Statement at a glance:

Basic rate of income tax to fall from 20p to 19p in the pound before the next election.

Fuel duty will be cut by 5p from 57.95p per litre following the surge in petrol prices with the reduction lasting for 12 months.

National Insurance threshold raised by £3,000 to ease impact of the planned tax hike in April. It will mean workers can earn £12,570 without paying the tax.

A Tax Plan to help families with living costs, create the conditions for higher growth and share the benefits of growth fairly.

Household support fund was doubled to £1 billion with local authorities delivering the extra £500 million from April. Many households are already in line to benefit from a £150 council tax rebate plus £200 off their energy bills in October.

Homeowners installing energy saving materials, like heat pumps and solar panels, will not pay VAT.

Employment Allowance will go up £1,000 to £5,000 making it cheaper for firms to hire workers.

A vow to cut taxes on business investment when the Super Deduction ends and R&D tax credits to be reformed.