Responding to the Chancellor’s Spring Statement today (23 March), East Midlands Chamber chief executive Scott Knowles said: “It’s clear from the Chancellor’s warning about the ‘unusually high uncertainty’ around the economic outlook – coupled with confirmation that inflation rose by 6.2% in February and will hit a projected 7.4% in 2022 – that businesses and communities should prepare accordingly for a continuation of the spiralling price rises over the coming year.
“Despite acknowledging these challenges, there wasn’t anything significant for firms to grasp as a potential route out of a renewed economic crisis that still lingers on the horizon.
“Small businesses will welcome a lift to the employment allowance, which should make a little room at the margins. Anything that can help in this regard is important, given that cashflow fell into negative territory for the first time in over a year for East Midlands businesses in our latest Quarterly Economic Survey for Q1 2022, with staffing among the resources growing increasingly expensive, just behind raw materials and energy.
“For individuals and families, the temporary fuel duty cut and raising the national insurance threshold offer a small alleviation in tackling the escalating cost of living crisis in the short term.
“But the biggest changes appear to have been put back until the autumn – when the investment gap in R&D, capital and people compared to other major economies will be addressed to support productivity growth – or even further down the line with the 2024 income tax reduction.
Cost of doing business crisis will continue without major interventions
“With many of the pressures being international in their nature, the Chancellor only had a few levers to pull. However, ultimately, there were no gamechangers that will pull us away from the cost of living – and equally a cost of doing business – crisis that is happening right now.
“The Chancellor had a decision to make and despite the big rhetoric in Parliament, it was a relatively light statement that sends a message to businesses that they will just have to get on with it for the foreseeable future.
“As global and domestic headwinds mount amid spiralling inflation and the war in Ukraine, this feels like a missed opportunity and puts at risk much of the progress made so far by our businesses, which have dragged the economy back on to its feet after two years of the pandemic.”