Subscriber login Close [x]
remember me
You are not logged in.

Business support lags behind in cost-of-living crisis

Published:  27 May, 2022

A £15bn package aimed at helping households deal with inflation and the rising cost of energy bills comes just one day after the Sue Gray report was published – a move that has prompted critics to question the rationale and timing of the sudden windfall for British consumers. Also, they ask, where is the support for business?

While chancellor Rishi Sunak, among others, have been fined for being snapped at lockdown parties, drink in hand, businesses have questioned why they were given the cold shoulder at yesterday’s tax statement, where no specific measures for UK industry were announced. They have also questioned the knock-on effect for the hospitality sector, which is still recovering from the effects of successive lockdowns, while the costs of doing business in the UK continues to rise.

“[Yesterday’s] announcement of a £15bn package to ease the cost-of-living crisis is a welcome signal that the government is targeting inflation,” UKHospitality CEO Kate Nicholls said.

“Direct, focused cash payments for lower-income households will hopefully shore up some consumer confidence, but now we need a commensurate focus to reduce the costs of doing business and further price rises.

“The government needs to identify and accelerate policies that will cut costs, minimise red tape and accelerate growth.”

Nicholls, among others, are now calling for a further cut to business taxes in order to incentivise investment in high streets. As inflation rises, this continues to be a priority, as the rising costs for energy, raw materials and people continue to have an impact on companies’ bottom line.

Calls also include a reduction in VAT to 5% on firms’ energy bills and deferring the increase to national insurance contributions until April next year to alleviate some of the pressure to raise prices.

Yesterday’s tax statement revealed a £400 energy windfall for households, with more than eight million of the lowest income households to receive a £650 one-off payment.

However, there was nothing to enthuse businesses, which are “still only just starting to get back on their feet”, Colin Wilkinson, managing director of the SLTA (Scottish Licensed Trade Association), said.

“Add to the mix the ScotRail situation with a third of services being cut and the ongoing challenges of staff shortages, supply issues, and new legislative measures that have been on hold for the last two years now looming – for example, the deposit return scheme (DRS) and the business rates review – and businesses are in a perilous situation.

“Our hope today was that the Chancellor would recognise these issues and announce some measures to help struggling businesses and stave off the very real threat of ‘tumbleweed’ city and town centres,” he added.