Suffolk Chamber finds little comfort in Budget statement

Its economy group chairman Matt Moss - who also runs a manufacturing company called SMART Modular Buildings - said at first glance, Jeremy Hunt's statement appeared to offer little new.

North Sea energy bosses also said they were "extremely disappointed" after the government extended a windfall tax on North Sea oil and gas. 

Mr Moss said Suffolk businesses were struggling - and there were infrastructure projects in the region which needed funding.

“At a time when core business health indicators -  investment, cash flow and sales and orders – are at their lowest levels since the pandemic, this Spring Budget offers comparatively little against these criteria," he said.

"Treasury approval for the Ely/Haughley rail junctions still remains uncertain, nothing seems to be being done to address the complex and confusing business rates system, and the future funding after March next year of employer-led Local Skills Improvement Plans hang in the balance.”

Most business people were likely to be responding to it initially with a "weary shrug", he said, as there was a lack of detail on help for projects which would directly benefit businesses here.

“On behalf of our thousands of members and the wider business community, Suffolk Chamber of Commerce has been strongly advocating for longer-term planning from Government, better infrastructure, securer skills pipelines and smarter corporate taxes – all essential ingredients for sustainable and inclusive growth."

But the chamber's head of public affairs Paul Simon suggested there were some positives - such as a lobbying part-win on research and development tax relief - after a government commitment to establish an expert advisory panel to support the administration of R&D reliefs.

Suffolk Chamber has been campaigning to reverse HMRC’s current punishment regime which is directly and negatively impacting hundreds of Suffolk SMEs (small and medium-sized enterprises).

“Businesses will also welcome the Budget’s smaller scale announcements, including the extension of the “temporary” 5p cut in fuel duty, the belated and modest rise in the VAT threshold, and the promissory note to extend full expensing to leased assets as soon as that is possible," he said.

“Essentially, this fiscal event seems to owe more to the political cycle than the economic one. Suffolk was hoping for better – and we certainly deserves better."

The Chamber would be looking through the detail behind the announcements to see if there is anything more for the county that fuels, feeds and transports our economy, he added.

Offshore Energies UK (OEUK) - the trade body for the offshore energy industry - said a decision to extend a windfall tax on North Sea oil and gas producers was a "disappointing blow to the industry which risks jobs, investment and economic growth".

OEUK chief executive David Whitehouse said: "The industry is being taxed on windfall profits which no longer exist and facing a fourth round of fiscal change and turmoil in less than two years, making it impossible to plan investment for the energy transition and the path to net zero." 

The windfall tax - introduced in May 2022 after Russia’s invasion of Ukraine - imposes a 75% tax rate on the North Sea energy industry.  

OEUK said the price of gas in the UK is almost 10 times lower than the peaks seen when the tax was introduced, and the price of oil has returned to the level before the Ukraine invasion.  

The Chancellor’s plan to continue the tax undermined a homegrown energy transition intended to boost domestic energy investment and drive the shift to greater production of wind and hydrogen energy, alongside the introduction of large-scale UK carbon capture and storage facilities, it argued.  

“We are extremely disappointed that the government continues to ignore clear evidence that we need investment in offshore energy production to grow the economy and achieve net zero," said Mr Whitehouse.

“We have identified £200bn of investment in oil and gas and the UK’s wider energy transition awaiting the green light which will not happen with such globally uncompetitive taxation in place. 

“Thousands of jobs and billions of pounds in national revenue are at risk because of the destabilising impact of these tax decisions." 

Candy Richards of the Federation of Small Businesses (FSB) welcomed the increase in the VAT threshold.

"Increasing it to £90,000 is certainly a step in the right direction but we will continue to campaign for an increase to £100,000," she said.

"The cut to self-employed National Insurance Contributions (NICs) is also welcome, alongside commitments to make progress on the HMRC administrative burden."