Tomorrow, Jeremy Hunt will present his first Spring Budget as Chancellor. So, what exactly do business leaders want to see from Hunt’s latest fiscal announcement and what will they get?
According to a survey from iResearch Services, sixty-four percent of business leaders are concerned, or very concerned about the Spring Statement.
Commenting on the findings Yogesh Shah, CEO of iResearch Services says: “It’s a turbulent time for British businesses and it’s worrying that there is so much concern surrounding what will be announced in the Spring Statement. Businesses need clarity and we urge the Chancellor to take bold and decisive action to tackle these escalating concerns.”
The survey from iResearch Services highlighted the biggest concerns of business leaders for the year ahead. The cost of living in the UK is the leading source of concern for businesses over the next few months with 48% citing this as a short-term risk.
With inflation remaining near 40-year highs, energy bill support for businesses set to end in April, and a host of other rising costs, this should not come as a surprise.
Alan Thomas, UK CEO at Simply Business, is one who wants the upcoming budget to provide help with rising costs.
He comments: “This year’s Spring Budget comes at a time when UK small business owners are particularly vulnerable. A worrying mix of challenges has backed the SME community into a corner, and many are hopeful that the Chancellor’s upcoming budget will provide some respite.
“Our research indicates that 65% of SMEs are worried about rising costs, almost a quarter are concerned by supply and material shortages, and many are finding profit margins squeezed as they struggle to pass on price increases to customers. Most notably, over a quarter (26%) believe that they, quite simply, will not be able to pay their bills in 2023. If that fear materialises then we will be in seriously dangerous waters.
“The cost of energy is front of mind for the majority of small businesses, with over half (54%) saying this is the single greatest threat to their business in 2023. Government support is due to move from the Energy Relief Scheme to the Energy Bill Discount Scheme at the end of the month. This new, less generous scheme may not scratch the surface for small hospitality businesses, who are already out of pocket to the tune of £40,000 on average due to the pandemic. Support with energy costs could prove crucial to their survival.
“With The Treasury considering an expansion of free childcare available in England, it’s essential that the Government both follow through with this promise and ensure that support goes far enough. For women business owners in particular, child care is an issue that remains front of mind – over one in five (21%) believe that access to affordable childcare is key to ensuring the success of their business.
“We’d urge Chancellor Jeremy Hunt to ensure that small businesses are at the heart of this Government’s economic plans. Accounting for over 99% of all British businesses, 48% of the British workforce, and contributing trillions of pounds a year in turnover, our economy’s recovery is directly linked to their prosperity.”
Dr Henry Balani, Global Head of Industry and Regulatory Affairs for Encompass Corporation, hopes to see the Chancellor commit to further promoting London as a world-class financial centre, and supporting businesses within it.
He continues: “It is crucial that this Budget instils optimism in the economy, and in how technology will be enabled to thrive. Regulatory technology, including the crucial solutions used to perform Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, should be a key consideration, especially as the Prime Minister, Rishi Sunak, is tech-savvy, with a deep understanding of financial markets and how they can support the UK economy when combined with proven technology solutions.
“The importance of a liquid banking system and tackling financial crime are critical and ongoing battles, which require a medium to long-term approach through these ongoing policy updates.
“The UK should also continue to reaffirm its public access policy towards data, enabling financial institutions to obtain and track important customer information, such as on Ultimate Beneficial Ownership (UBO), through APIs and workflow solutions. Continuing to promote transparency with regard to data can play an important role in the fight against financial crime.
“Ultimately, this Budget should cement the UK as a leading global financial hub, promoting UK exports as part of economic recovery and growth, while facilitating openness to data to create a solid foundation for thriving markets.”
According to Sunil Dial, CandidateX Founder CEO, the Chancellor has urged the over-50s to get back into the workforce to drive growth and prevent inflation. However, he says this misdiagnoses the problem.
He continues: “All the available data tells us that over 50s want to be in work. It is estimated that there are now one million 50–64 year-olds who want to be in employment, but aren’t – this is almost 2% of the adult population.
“On the face of it, that seems like there should be an easy solution, but ultimately the job market does not work for older people. Age discrimination and unconscious biases are pushing the over-50s out of employment, and if we as a nation want to increase their numbers in the workforce, we need to actively tackle this overlooked form of employment discrimination.
“Businesses must actively tackle their own recruitment practices to address this. They should make sure that CVs and applications are anonymised before they reach hiring managers, and that job advertisements use inclusive language, are advertised widely, and via accessible job platforms. They can also make sure that their internal talent teams and hiring managers are fully trained in preventing unconscious bias, and understand the value of underrepresented talent.
“Employers can also take the bold step to publish data on how they are hiring now. AI-powered application systems and access to big data analytics are already streamlining inclusivity measures, and allowing companies to see where they can advance their DE&I.”
However, Ben Ashton, Co-founder of GoodOaks Home Care, would like to see more support to help young mothers get back into the workforce.
He comments: “The current underfunding and underinvestment in early years childcare makes it uneconomical for both parents to work. This has a big impact on the elderly care sector too, as 80%+ of the workforce is female, and informal arrangements often struggle to provide the certainty and reliability needed for safe provision of care.
“Although expensive, this would bring more people back into economic activity, and ultimately reduce the strain on the NHS by improving staffing capacity both for direct employment by the NHS as well as the related services such as homecare and care homes.
“Changing the tax status of homecare providers from VAT exempt to Zero rated. Currently, homecare companies cannot charge VAT, but cannot claim back VAT paid on products and services, effectively making everything 20% more expensive.
“With Zero Rated VAT, we still wouldn’t charge our clients VAT on the services we provide but we’d be able to claim back the VAT we’ve paid on goods and services. This would be a far fairer VAT regime for the social care sector and would allow us to reinvest that money back into the business to further support our staff and clients.
“We could spend this on building staffing capacity in the care sector, improving working conditions for home care professionals, and developing training and employee skills.
“Scrapping the planned fuel duty increase. I actually think in principle, fossil fuels should be taxed more heavily to speed up the change to renewables and electric vehicles. It does however hit the homecare sector and the less well-off the hardest, and in the current economic situation, it could be quite damaging. If the fuel duty increase does go ahead, the money should be ring-fenced for investments in green transport infrastructure to enable companies such as ours to move to clean transport in a shorter timeframe.”
Alex Franklin, Director of architecture at Basha-Franklin, wants to see planning reform in the upcoming budget.
He comments: “The UK planning system has been under scrutiny for some time for its slow application process. Political discussions have centered around finding a solution, such as simplifying or shortening the process, or providing more resources. However, many professionals in the field feel frustrated with being assigned planning officers who lack the required design or planning experience, indicating a gap in technical competence.
“To address this, I propose that instead of dispersing skills among local planning authorities, we centralise these skills to create a talent pool, to build and maintain state-of-the-art sector-specific expertise for engagement on major projects. This will lead to better-quality buildings in the long term, despite the lack of additional funding and the skills gap.
“The system also appears to effectively handle environmental considerations, and rightly so. However, the same cannot be said for building design technicalities. The lack of proper consideration of technical design issues can lead to consent being granted for designs that have oversights or flaws.
“To mitigate this, the reintroduction of Outline Consent, followed by a Full Plans or Detailed Consent, once the design is technically resolved could be considered. This solution may pose a challenge for Local Planning Authority (LPA) staff, as it would require the expertise of surveyors or architects to evaluate proposals, and to be blunt, there probably aren’t enough architects involved in planning. That needs to change moving forward.”
In a survey of 500 UK SMEs from Bibby Financial Services, 80% of respondents said they don’t think the government is providing enough support for SMEs.
Meanwhile, 67% are not confident that the Chancellor’s Spring Budget will deliver the support their business needs. This figure shows a decline in businesses’ confidence in the Government since Autumn 2022 when 62% of SMEs reported that they were not confident that the Autumn Budget would deliver the support they needed.
Notably, 85% of female respondents don’t think the government is providing enough support for SMEs, compared to 77% of male respondents, whilst 72% of female respondents are not confident that the Chancellor’s Spring Budget will deliver the support their business needs, compared to 62% of male respondents.
Jonathan Andrew, CEO of Bibby Financial Services, comments on the findings: “The UK’s small to medium-sized businesses have demonstrated incredible resilience over the past few months and years. Hit with crisis after crisis, SMEs have tenaciously adapted and evolved in any way they can to survive. But the difficult economic conditions have played havoc with their ability and desire to invest in innovation and growth.
“SMEs feel underrated, undervalued, under-supported. So, in this budget, we want to see better support and policy that matches SMEs’ resilience and ambition.
“First, education is key. Government should help to guide businesses to existing resources and initiatives that are currently underutilised, such as the Bank Referral Scheme. Second, the Government could take more effective steps to alleviate the burden for hardworking small businesses by pulling the levers of central and local taxation, such as business rates, and by extending the pay-back period on covid loans.
“As the Government ‘goes for growth’, those SMEs that are sufficiently equipped to build resilience and invest in their futures will play a vital role in driving the UK’s economic recovery.”
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