Businesses are left to rue missed opportunities - Dr Liz Cameron

Businesses are left with missed opportunities from Budget that did little to relieve pressure

There was little doubt the impending general election would heavily influence the Chancellor’s decision-making ahead of his final Spring Budget. His headline message focused on tax cuts for workers and a slightly improved economic outlook, giving us the clearest indication yet of the Conservative Party’s positioning ahead of the country going to the polls.

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. The budget will do little to relieve these pressures and for too many sectors the struggle will continue.

So, as speculations on giveaways have now been confirmed, we are also left with the missed opportunities.

Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce

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.

The Chancellor had a clear opportunity to show the United Kingdom is open for business but as the OBR now forecasts that tax as share of GDP is going to rise to 37.1 per cent by 2029 – the highest level since 1948 – we need to course correct and get the economy back on track.

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 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.

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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. Industry is rightly asking why one of our greatest economic assets and global exports continues to be penalised.

Similarly, 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.

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.

Dr Liz Cameron is chief executive of Scottish Chambers of Commerce