SCC responds to the UK Spring Budget

Commenting on the Spring Statement delivered by the Chancellor Jeremy Hunt, Dr Liz Cameron CBE, Chief Executive, Scottish Chambers of Commerce, said:

“Businesses across the country continue to deal with spiralling costs fuelled by higher energy prices, higher inflation, and higher interest rates. On top of that, persistent labour challenges are preventing businesses from growing. This budget will do little to relieve these pressures and for too many sectors the struggle will continue.

“From a business perspective, not enough has been done to change the narrative and restore our reputation as an entrepreneurial and business-friendly nation. The Chancellor has set out his ambitions for growth and has committed to some nuggets of hope for the business community. But the overriding impression is that his real ‘long-term plan’ to address our economic stagnation has been left for another day, perhaps even another government.”

On National Insurance, Dr Cameron said:

“The 2p cut to National Insurance was the Chancellor’s ‘rabbit out of the hat’. The UK’s tax burden is at record highs and reducing employee national insurance contributions at this time was the right thing to do to help households with the cost of living.

“However, pulling this out of his red box towards the end of what has been the highest taxing Westminster Parliament to date will leave many asking whether this policy alone goes far enough.

“From an employer perspective, reducing employer contributions with the savings directed towards business investment and employee retention and recruitment was a missed opportunity.”

On the Energy Profits Levy, Dr Cameron said:

“The extension of the sunset clause on Energy Profits Levy to 2029 is quite simply the wrong decision. It will exacerbate the already heavily suppressed levels of investment currently seen in the North Sea and could harm the transition to net zero.”

On the VAT Retail Export Scheme, Dr Cameron said:

“The removal of tax-free shopping in 2021 was widely criticised at the time by industry and our calls to restore the scheme for international visitors which could bring £10 billion to the economy have been ignored. The decision will continue to damage the UK’s retail offering and has disincentivised international tourists from spending whilst in the UK.

“Major cities across Europe and the world are providing a far more competitive offering for visitors and are seeing visitor spending recovering much faster than the UK. Our retailers are operating with one hand tied behind their back and this must be addressed quickly.”

On Air Passenger Duty, Dr Cameron said:

“The UK already has some of the highest rates of aviation taxes and airport charges in the world.

“Increasing non-economy air passenger duty on business travellers, as well as families and those travelling for leisure is a tax by stealth and will do nothing to help revive and grow the industry.”

On VAT, Dr Cameron said:

“Whilst our calls to cut VAT for the hospitality, leisure, and tourism sectors was not addressed by the Chancellor, we will continue to make the case.

“However, we welcome that the Chancellor has raised the VAT registration threshold from £80,000 to £90,000, which will mean more businesses will fall under that threshold and not have to pay VAT, which will be welcomed.

“Further engagement between the business community and government to ease the VAT burden for those who will continue to pay, and simplify the process, should be pursued to address concerns over added administration from VAT compliance.”

On Alcohol Duty, Dr Cameron said:

“A freeze on Alcohol Duty is a positive step, but Scotch Whisky remains the highest taxed alcohol category in the UK. It is taxed at a higher rate per unit of alcohol than wine, beer, and cider, and faces the highest spirits duty rate among G7 nations.”


Related Posts

SCC International Trade Update

Access the world’s largest business to business network The Scottish Chambers of Commerce network is recognised as an internationally leading business to business network.  Our powerful