Reeves told to use Spring Statement to fix ‘unintended consequences’ of Budget
Rachel Reeves must use the Spring Statement to fix the “unintended consequences” of her Autumn Budget, the boss of a tax services firm has said.
Tom Shave, President of the Europe and Asia-Pacific division at Ryan, has urged the Chancellor to use Wednesday’s update to provide businesses under economic pressure necessary support.
Shave anticipated Reeves’ statement would “be more of an economic update focused on spending cuts rather than tax changes” but stressed the need to support suffering businesses.
“From rising costs to international trade uncertainty, many are finding it increasingly difficult to manage costs and the uncertain business environment,” he added.
Reeves’ flurry of tax changes, set to come into effect in early April, have been one of business’ biggest grievances since the Autumn Budget.
The Chancellor raised employer’s national insurance contributions 1.2 per cent to 15 per cent and many firms have responded by issuing a hiring freeze.
“Meaningful action is needed to ease the burden of taxation on businesses along with more growth-associated measures,” Shave said.
Whilst Reeves staked her political reputation on bolstering economic growth, the results thus far have remained dire.
The economy shrunk 0.1 per cent in January, in a major blow to the Chancellor, and added further speculation her fiscal headroom had been wiped out.
Following the Autumn Budget, Reeves left herself nearly £10bn of elbow room to meet her pledge to fund day-to-day government spending through tax receipts.
The government will publish the Office for Budget Responsibility’s updated economic assessment alongside the Spring Statement, and any downgrade could erode the Chancellor’s remaining leeway.
Shave said Wednesday’s update offers an opportunity to “develop a more supportive environment for business and investment in the UK.”
“The UK should be a place where businesses can thrive and drive economic recovery, without further incentives to invest and operate in the UK, we risk stalling economic momentum and resilience.”