The Spring Statement – What might we see?
The Spring Statement this year, due on the 23rd March, will be set against a difficult back drop. Business owners continue to battle on many different fronts: rising costs on almost every front, increasing interest rates, continuing pandemic fallout, the War in Ukraine and the related wariness around oil and gas availability. Many business groups, including the Confederation of British Industry (CBI) are calling for further support to help.
1 Make the Super Deduction permanent.
Introduced in Spring 2021, the CBI wants a variation of the Super Deduction to be made permanent in the Spring Statement, to encourage investment in the UK Economy.
The CBI says that announcing a permanent successor at Spring Statement could increase annual capital investment by 17% by 2026, equating to a £40 billion a year boost to the UK economy.
The manufacturers’ organisation Make UK has echoed the call. The trade body says the super deduction could bolster investment, and confidence, into the future.
2 Postpone the NIC increase.
Make UK is also calling for a delay for the planned 1.25% rise in national insurance contributions (NICs). It would like to see the increase delayed until the UK economy is in a stronger position. An increase now would reduce recruitment and jeopardise recovery from the pandemic, it claims.
According to a Make UK survey of almost 300 manufacturing firms, almost three-quarters said they would pass on, or would be very likely to pass on, the rise in their costs to customers in the form of higher prices for their products and services.
Make UK are not alone in calling for the delay, but both the Prime Minister and Chancellor have issued statements that it will go ahead as planned.
3 Address the Skills Shortage.
The CBI are very concerned about the current shortage of skilled workers within the economy, Over 1million people have left the employment market since the beginning of the pandemic, and up to 60% of employees are reputedly looking to change jobs in the next 12 months.
The CBI claim a new Skills Challenge Fund, to be created to replace the Apprenticeship Levy, would improve the quality of training and improve employer flexibility.
It also wants to see the creation of an independent Council for Future Skills, which it says would combine business action, skills policies and immigration to deliver a workforce fit for the 21st Century.
Whatever he announces on the 23rd March, Rishi Sunak will once again be in a difficult position.
He’s currently facing calls for increased military spending, increased support for families facing exponential fuel cost rises, and well as all of the above from the CBI, and we’re still a week away from his speech.
As the phrase goes, that can be a very long time in politics, and given the rollercoaster of the last two years, anything could happen.
We’ll be sending a summary of the main points as quickly as possible after the speech, so if you’re a client, please keep an eye on your inbox once he’s spoken. If you’re not a client, and would like to get hold of a copy of that summary, please add your details to the form below and we’ll do the rest!