A 5p cut in fuel duty to take effect from 6pm tonight (Wednesday) has been welcomed as “positive” move.
But, at the same time, measures revealed in Chancellor Rishi Sunak’s Spring Statement “fall short of the actions” needed by Northern Ireland businesses, according to the NI Chamber.
Mr Sunak has also revealed plans to raise the National Insurance threshold by £3,000 which he says will effectively act as a tax cut.
And at the end of the Parliament in 2024, it is intended to cut the basic rate of income tax from 20% to 19%.
Responding to the Chancellor’s Spring Statement, Ann McGregor, Chief Executive, Northern Ireland Chamber of Commerce and Industry (NI Chamber) said: While there are some positive announcements that firms will welcome, it did not fundamentally address the huge cost pressures they are facing.
“For example, while cuts to fuel duty are welcome, in reality, the reduction is small when compared to the larger tsunami of surging costs that is bearing down on firms and households.
“The Statement lacked the kind of decisive action which businesses, who are already struggling with a rapidly escalating ‘cost of doing business’ crisis, needed to see.
“Smaller firms are particularly exposed as they have neither the protections, or financial support provided to households, nor the negotiating power of larger businesses.
“As the economic outlook is likely to get worse before it gets better, many firms will be forced to continue raising prices, further fuelling the cost-of-living crisis. Businesses are braced to face some gruelling weeks and months ahead.
“More is needed to support them and protect jobs through the domestic and global economic shocks to come.”
Northern Ireland Finance Minister Conor Murphy has also described today’s announcements as “underwhelming”.
Finance Minister, Conor Murphy says the Chancellor’s Spring Statement does not go far enough to support people and businesses facing spiralling fuel and energy costs.
Speaking following the Chancellor’s announcement, Minister Murphy said: “The Chancellor’s statement provides nowhere near enough support to people and businesses struggling with the rising cost of living. Despite inflation being at a 30 year high, the Chancellor is tinkering on the edges.
“Increasing the threshold for National Insurance contributions will help mitigate the impact of the hike on workers on the very lowest incomes, but the Chancellor should have gone further by scrapping his planned increase in National Insurance entirely.
“The reduction in fuel duty for motorists is minimal. A 5p reduction will be of little comfort to motorists given that petrol and diesel prices have increased by over 20 and 30 pence per litre respectively since the start of this year.
“At a time when households are facing spiralling costs to heat their homes today’s statement fails to reduce VAT on energy bills or uprate benefits.”
The Minister continued: “It is hugely disappointing the Chancellor is proceeding with the removal of the red diesel rebate. With businesses, our construction and agri-food sectors in particular, already facing increased prices this additional tax burden couldn’t come at a worse time. The Chancellor could also have imposed a windfall tax on energy companies but he chose not to.”
Northern Ireland will receive £34 million Resource DEL in Barnett consequential for 2022-23 as a result of the announcement today. Commenting on this, Minister Murphy added:
“I have asked the Chancellor to consider ring-fencing any additional Barnett for the cost of living crisis. This may enable me to allocate the money for similar support here. My request remains under consideration. Therefore this £34m will be added to the £300 million which in the absence of an Executive cannot be allocated to help families, communities and businesses.
“With households struggling to heat their homes and fuel their cars, the actions that the Chancellor has taken are extremely limited. Much more could and should have been done. I will continue to press the British Government to take further measures as a matter of urgency.”
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