Key measures announced by Hunt in yesterday’s (6 March) Budget include a further cut to employees’ National Insurance contributions (NICs) from 10% to 8%, which will take effect from 6 April; a corresponding cut to self-employed NICs; a continued freeze on fuel duty; and a rise in the Child Benefit ceiling to £60,000.
The Budget, likely to be the Conservatives’ last chance at pushing out major economic policies before the next general election, saw an overall £20bn of tax cuts, largely aimed at the electorate rather than businesses.
Bruce Thomson, managing director of mailing house Bakergoodchild, told Printweek he found the chancellor’s speech “somewhat underwhelming.”
“Whilst we were promised tax cuts – and there were several, along with some hikes! – from the perspective of an SME owner, operating specifically in the business mail sector, it’s hard to see anything of any major significance that’s going to make any real difference to us as a business.
“The biggest gain,” he added, “which I’m really pleased about, is to the team – our employees.”
To the average worker, on £35,400 annually, the cut will give back around £450 each year, on top of the 2p NIC cut in autumn 2023.
“Combined, this should save the average worker up to £900 a year. We employ about 50, so that’s £45,000 more, into the hands of our whole team, annually. This is welcome news.”
Brendan Perring, general manager of the IPIA, told Printweek that any boost to wages was positive news, even if relatively modest.
“It will help create confidence in the market. If people get to hold onto a little more of their paycheck, it will provide some stimulus to the economy, and help overall. I wouldn’t suggest that it’s going to be a game-changer, but it’s a gesture of understanding that people are facing a really difficult time,” he said.
Of more direct use to printers, he added, would be the continued freeze on fuel duties, which will help ease supply chain inflation.
“Considering we’re so heavily dependent on road haulage, that should have a decent consequential effect on our industry,” he said.
For Charles Jarrold, chief executive of the BPIF, while the Budget had little to excite printers, that was not necessarily a bad thing.
Speaking to Printweek, he said: “This seems to be quite a modest and measured budget, which after some of the upheavals of the last couple of years, is not wholly unwelcome.
“While there was little directly on offer to our sector, it’s encouraging to see more positive forecasts emerging on the economic situation with both growth forecasts being revised modestly upwards, and inflation predictions downwards.”
Office for Budget Responsibility (OBR) forecasts quoted by Hunt show a 0.1% growth in UK GDP in 2023, beating its November 2022 forecast for 2023, which predicted a 1.5% contraction.
Inflation has more than halved, falling from its 11% peak to 4%; the OBR forecasts that inflation will fall to the target 2% in the second quarter of 2024, a year earlier than it had predicted late last year.
Jarrold added: “We previously welcomed the announcement of full expensing, and the intent to extend that to leased assets will, if it takes place, be another step in the right direction, but beyond that, it is a little disappointing.
“We were hoping for a clearer recognition of the contribution of UK manufacturing, especially for SMEs. They are the engine-room of UK growth yet are still struggling with high energy costs, Covid loan repayments and mandatory wage increases.
“We remain convinced that what the UK really needs is an integrated and comprehensive industrial strategy that boosts investment in skills, technology, environmental improvements and infrastructure, properly addressing the productivity and skills challenges that we face.”
Overall, not much has changed, according to one packaging source, who simply said: “Honestly, there's nothing I can say on this pre-election, unexciting Budget.”
