Budget Comment - 17 Mar 2023

Has Jeremy done enough?

Not a simple answer to this question as it depends who you are and what you do! For NHS consultants and other wealthy people not wanting to retire clearly the answer is yes but for most people I suspect the answer is no and it has certainly not gone down well with the opposition parties. What actions will these folk take in advance of a promised overturn by an incoming labour government?

Certainly the hospitality industry do not feel the cut in duty on draught beer is enough as duty will increase on non-draught and the industry remains seriously concerned about their energy costs. It is good to see that the price cap guarantee for domestic energy bills has been extended to the end of June but whether that is enough to encourage households to support their local bars and restaurants is questionable. On top of this, the UK hospitality trade body has warned that train strikes will cost the industry over half a billion pounds. We don’t see how many businesses will survive.

Jeremy also ignored calls to postponed the corporation tax increase and, given the precarious nature of the UK economy, we are concerned that this will seriously damage a huge number of businesses. The counter to this is of course the tax break on investment in machinery and technology but we are concerned for those businesses merely trying to keep trading through this downturn, not invest in the future.

On the positive side, we are pleased to see that the OBR has revised their forecasts and now believe that we will see a much smaller and shorter downturn and that inflation will fall to 2.9% by the end of this year. However, the Bank do not share their view – but given our last publication, that does not surprise us!

If you are involved with, or know of any business or individuals that are struggling financially we suggest that you talk to us.

The directors of SKSi look at a formal insolvency process as the last resort – not the first. It is their long held belief – borne out with proven experience – that seeking advice at the first sign of financial pressures will lead to a more favourable outcome. Conversely, doing nothing and hoping the problem will go away is far more likely to lead to a c all form the bank and an insolvency process.

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