Relief For Workers Will Quickly Evaporate

24th March 2022

Dr Gordon Fletcher, retail and business expert at the University of Salford Business School, said the challenges being faced in the UK economy now were being felt before the war in Ukraine began.

He said: "Reductions in the fuel duty and possibly in income tax as well as an increase in the NIC threshold appear to give some relief to workers. But with the prospect of inflation climbing beyond 7% this year and volatility in the fuel supply chain these advantages may quickly evaporate.

"As the Spring Statement was being prepared there must have been a point when Sunak considered what the next day's headlines would say.

“Would this be about the cost of living crisis, post-COVID recovery, a new green economy or even a mini-war budget? What was offered up is in the end was a mixed bag that lightly promised on the first, gave nods to the others and leaned a bit too heavily on the last.

“These are changes that have little impact for pensioners or low income families in the lead up to next Winter. And reducing contributions in reduces government's ability to service debt or support social services.

“A slight reduction in the VAT for heat pumps also offers no hope for these groups - although it might be bring enough appeal for making the second home a bit greener. Placing the blame on the impact of Russian sanctions may ring the government's bell in showing international leadership but the many economic challenges we are now facing were evident long before tanks started rolling towards Kyiv."