By Scott Wright

MEASURES unveiled by Chancellor Rishi Sunak in this week’s Spring Statement to combat soaring inflation have been branded a “drop in the ocean” compared with the increased costs facing households and firms.

As Mr Sunak faces criticism that he has not done enough to help the most financially vulnerable, or to support businesses, the chief executive of Glasgow Chamber of Commerce, Stuart Patrick, said firms in the city had been hoping for more radical steps from the Chancellor.

Business groups were scathing that Mr Sunak did not adequately address surging energy costs, with Andrew McRae, policy chair of the Federation of Small Businesses in Scotland, declared that this was a “glaring omission” from the spring statement.

Mr Patrick said: “Whilst there were some positive initiatives within this statement from the Chancellor I think businesses across Glasgow were hoping for more ambition to tackle the immense challenges they will face in the coming months.

“Ultimately the positive steps are just a drop in the ocean compared to the larger tsunami of surging costs that is bearing down on firms and households.

“Smaller businesses are particularly exposed as they have neither the protections or financial support provided to households, nor the negotiating power of larger businesses.”

The spring statement contained few measures to support businesses, with the 5p per litre reduction in fuel duty arguably the most headline-grabbing move.

Mr Sunak said he would increase the employment allowance by £1,000 to £5,000 to help smaller firms, and examine how to improve technical skills, boost productivity and unlock investment in research and development. But business groups generally felt the statement did not do enough to ease the challenges firms are facing. Hospitality groups were disappointed that Mr Sunak did not deviate from plans to return the level of value-added tax to 20 per cent for the sector. VAT was slashed to 5% for hospitality when the pandemic took hold in 2020, before increasing to 12.5% in September 2021.

Mr Patrick said: “Most would have been wanting to see more action taken to help mitigate the rising cost of fuel. The 5p per litre reduction is only a mere fraction compared with other European nations who are reducing VAT levels by [up] to 20 per cent to help businesses and this ever-rising cost of energy is a huge worry for many firms – especially SMEs.

“We urge the government to take further action – including the introduction of an SME energy price cap – to tackle the escalating cost of doing business. Firms need the headroom to keep a lid on prices, protect jobs and make investment that is so vital to sustaining our economic prospects. I think the biggest takeaway for businesses listening yesterday (Wednesday) was that things are going to get worse before they get better.”