Apart from the rather strange approach to pension relief for the extremely wealthy what else did the government say to help the economy?
Yesterday’s announcement was rich in talk about investment in projects, developing regions and tax breaks for sectors that needed a boost like Nuclear power? All of which sets the groundwork for changes that are not likely to be seen for 10 years.
Many of the proposals put in place such as increasing the Corporation Tax to 25% were creating a headline grabbing figure. In this case it only relates to businesses with over £250,000 profit. At 25% the new level is still lower than other G7 countries.
The levels of corporation tax for businesses between £50,000 and £250,000 will have a marginal rate, a tapered rate system will apply increasing the tax above 19%.
Importantly for small businesses there is no change for businesses reporting profits under £50,000.
This was something that was flagged by Liz Truss some time ago, so not a new announcement.
The changes to childcare don’t come into play until next year so will not change things immediately.
From the Spring Statement what helps businesses in the short term?
In reality not a lot!
The government subsidies limiting typical household energy bills to £2,500 a year was extended for three months, until the end of June.
Many families were concerned about the loss of the £66 a month relief on energy bills so this will help. Whilst energy bills are higher than a year ago this amended period of relief will help consumer confidence.
UK consumer confidence saw a welcomed lift in February. With confidence returned to the same levels seen in April last year consumers are more likely to be spending in retail, hospitality and home improvement. This trickles through business and benefits the wider economy.
Much of the talk from the Chancellor was positive, naming specific regions, towns, cities for development. Along with announcements that we would avoid recession, have 1.8% growth next year, and reporting that inflation would be dropping to 2.9% the Chancellor appears to be telling everyone that everything is back to normal.
If the spring statement shifts the consumer confidence then all businesses will benefit.
Now we wait for the media to pick up on the things that they think will gain them an audience growth opportunity and hope that doesn’t undermine the positive nature of the statement!