We asked some of the partners in our Level Up campaign for their reaction to the Chancellor’s Spring Statement. This is what they told Business Editor Mike Hughes
Tees Valley Mayor Ben Houchen: The pressure local people are feeling – and will continue to feel – will not be dramatically improved by today’s Spring Statement.
It didn’t solve problems we face on energy costs, fuel bills or inflation and, while measures such as the NIC threshold increase, living wage increase and fuel duty cut are welcome, they will have no real-terms impact on the money in people’s pockets. Government spent more than £400billion to keep people going during the pandemic, on things like furlough and business support, but its interest payments are likely to be more than £80billion this year.
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It’s a figure unparalleled since the Second World War and one that could otherwise be spent on services, supporting those in need and reducing taxes. It’s not unexpected, but that doesn’t make it any less eye-watering.
It is forecast that we could see the largest drop in living standards for more than 50 years and inflation is expected to peak at nearly 8%. Covid is still causing chaos on our supply chains and wider economy, compounded by events in Ukraine. It seems things will become increasingly challenging for everyone in the coming months.
Cllr Richard Bell, Deputy Leader of Durham County Council and Cabinet member for finance: “We know the cost of living crisis is a cause of great concern to many of our residents and we welcome the emphasis placed on this in the Chancellor’s spring statement.
“This includes increasing the Household Support Fund from £500 million to nearly £1 billion. We will continue to work with our partners to administer County Durham’s share of the funding, ensuring it reaches households that are most in need.
“The confirmation of the second round of the £4.8 billion Levelling Up Fund is also welcomed. We successfully secured £20 million from the first round of funding for the Bishop Auckland constituency as part of a broader £32 million investment.
“We remain absolutely committed to developing Levelling Up proposals for County Durham’s five other parliamentary constituencies as part of our work to enhance the vibrancy of communities, attract investment and create and safeguard jobs. We will consider the updated prospectus once published to ensure that the best possible proposals can be considered in line with the funding criteria.
“It was also good to see a renewed commitment from the Government to supporting investment, innovation and growth, with increases to the Employment Allowance for smaller businesses and two new business rate reliefs to be introduced from next month.
“Further details on our funding allocation from the Shared Prosperity Fund were not provided within the statement and we hope to receive more information on this soon. The fund is vital to supporting skills development, local businesses and adult literacy and numeracy initiatives.
“Over the coming days and weeks, we will consider the impact of any changes within the spring statement closely and develop our plans appropriately to ensure the best outcomes for residents and businesses.”
Nigel Emmerson, Partner at Womble Bond Dickinson: “The government’s decision to double the Household Support Fund to £1bn is a good one, and will have a meaningful impact on the UK’s most vulnerable families.
“While it remains to be seen how each Local Authority will allocate this funding, overall it is a positive step.
“The VAT cut to energy saving materials is good for the construction industry, which has been at the mercy of a range of factors in recent years. The move has the potential to give the sector the much-needed support it needs to recover from the effects of the pandemic and Brexit, which in turn may alleviate the UK’s housing crisis.
“The VAT reduction is also positive for homeowners wanting to install energy saving products, and supports the UK’s move towards Net Zero. However, homeowners will still have to fund the upfront costs of these products, which at a time when the cost of living is at a record high is not ideal.”
Arlen Pettitt, North East England Chamber of Commerce knowledge development manager: “This Spring Statement was not on a significant enough scale to make a difference to many businesses, or our region as a whole, at present.”
“However, we do acknowledge the Chancellor’s recognition of the enormous pressures on the economy and household spending at present. Unfortunately recognition is not enough. There needed to be more to tackle the huge pressures created by the cost of doing business at present. We believe an initiative such as a temporary energy price cap for small businesses would have been extremely helpful, as would a reduction in NI in line with that announced for individuals.
“There were some positives. Our haulage sector will be pleased to have the fuel duty cut but many companies are still disadvantaged by the removal of red diesel as a low price option. It is also good that the Chancellor is looking at tax breaks for training and changes to the apprenticeship levy.
“In summary this Spring Statement tinkered around the edges of some substantial challenges facing businesses.”
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