York business leaders are calling on the Chancellor to take radical action in his spring statement to help them get through the cost of living crisis.
Rishi Sunak is being urged to do all he can to help businesses when he delivers his statement tomorrow (Wednesday).
Huge hikes in both fuel and energy prices are having an impact on inflation, while Britain’s budget deficit was £13.1 billion in February.
Reports suggest the government will stick to their plan of raising National Insurance by 1.25 per cent, despite pressure to pause or scrap the increase.
It would raise £12bn a year, but also push up wage costs. Reports suggest the government will instead cut the threshold that people will need to start paying for the tax.
What do York businesses think?
David Skaith, the chair of York High Street Forum, told YorkMix: “Many businesses have seriously struggled to just survive after the pandemic, to now only be thrust into a cost of living crises, the invasion of Ukraine and the ongoing issues of leaving the EU.
“We need a delay on the National Insurance rise. And some kind of cap on energy prices, especially for smaller businesses who are still struggling after the pandemic.”
Businesses will also be listening out for any announcement on VAT.
The government cut VAT for the hospitality sector during the pandemic to 12.5%. However, this is set to go back up to 20% in April.
Helen Heraty the owner of award winning boutique hotel Grays Court on Chapter House Street in York, called for VAT to be left where it is. A raise now would be “catastrophic, with accommodation and food being the hardest hit,” she told YorkMix.
“The increase in VAT is money that goes straight into the government’s pocket – which means businesses will have to raise prices for consumers who are already struggling with the increasing cost of living.”
Ahead of tomorrow’s statement, Mr Sunak said that “where we can make a difference we will”. However, he also conceded that his intervention would fall short of what is needed, saying that he “can’t solve every problem” and that surging inflation was “out of my control”.