On Wednesday March 23rd The Chancellor will deliver his spring statement, whilst this is not a budget by any means it is an opportunity to review the economy and make any necessary changes.
Two issues are on the mind of businesses. First is waning consumer confidence, in the light of inflation predicted to hit 8% later in the year. The second is rising costs, just like consumers, for fuel, supplies and energy, at a time when for hospitality businesses, VAT will start to be fully repaid from April 1st and wage costs are spiralling with over 1.2m vacancies in the economy and unemployment being back down to pre pandemic levels.
I am not expecting too many rabbits to be pulled out of his red box however, here are some thoughts.
Increased employment has resulted in a greatly increased tax take in recent months and less being paid out through the welfare state, commentators state this could be a £25bn per year windfall. To maintain consumer confidence but not spike inflation then some income tax cuts would be helpful as would the continuing of the current lower VAT threshold for hospitality and some meaningful investment in encouraging the return of international visitors that many cities like Cambridge need.
Footfall in Cambridge last week was above 2019 levels and this is very encouraging, the city feels busy, in spite of the new covid strain impacting staffing, many businesses are starting to see some recovery and hope 2022 will be largely one of a return to normal. Tragic events in Ukraine cannot be ignored and to some extend are now being factored into a dip in consumer confidence and business expectations. There is still plenty of capacity to accommodate more visitors especially midweek since we are missing to a large extent the more lucrative business traveller and conference spend. Residents are another vital ingredient in supporting the city offer all year round, as the weather improves what better than a stroll around our beautiful city, a catch up with friends, shopping, coffee and cake, lunch, drinks and a show, enjoy.
