25 Mar Essex Chambers of Commerce respond to the Chancellor’s 2022 Spring Statement
The Essex Chambers of Commerce broadly welcomed the measures announced in Chancellor Rishi Sunak’s Spring Statement, but recognise that more could have been done to support the cost of doing business crisis. Quite understandably, the focus of the Spring Statement has been on supporting individuals and families manage the cost of living.
Denise Rossiter, Essex Chamber’s Chief Executive, said: “We would have liked to see more done by the Chancellor, with inflation running at a 30-year- high, Essex businesses are under huge pressure to manage their cost base and could be forced to raise their prices to combat the rising cost of doing business”.
The British Chambers of Commerce (BCC) expects the surge to continue over coming months as the energy price cap rise, the reversal of the hospitality VAT cut and upward pressure on energy and commodity prices from Russia’s invasion of Ukraine continues to bite. Shevaun Haviland, Director General of the BCC, said: “The Spring Statement falls short of the action businesses needed to see today. While there are some positive announcements that firms will welcome, it did not fundamentally address the huge cost pressures they are facing.
On the Chancellor’s priorities for the Autumn Budget, Director General Haviland said:
“Businesses will welcome the Chancellor’s firm commitment to cut taxes on business investment, something chamber business communities have long called for. Turbocharging investment is crucial to boosting productivity, levelling-up and the transition to net zero. We look forward to working closely with ministers on driving stronger business investment and reform to the apprenticeship levy and R&D tax credits.”
KEY POINTS:
Economic growth: The Office for Budget Responsibility (OBR) expects GDP growth for 2022 of 3.8%, down from their previous forecast of 6.0% published in October 2021.
Inflation: The OBR expects CPI inflation to be 7.4% in 2022 (peaking at close to 9.0% in Q4 2022) and 4.0 per cent in 2023, higher than its October 2021 forecast.
Labour market: The OBR now expects unemployment to reach 4.0% across 2022 and 4.2% in 2023.
Fiscal Forecast: The OBR now expects public sector net borrowing to reach £99.1 billion in 2022-23. This is lower than the OBR forecast of £183.0 billion in October 2021.
Public spending: Total public spending is expected to amount to around 43.2 per cent of GDP in 2022- 23, before decreasing to 41.1 per cent of GDP in 2026-27.
