Chamber tells Jeremy Hunt what businesses need to hear in Budget

28/02/2024

NORTH-east businesses are putting pressure on Jeremy Hunt to ditch the controversial windfall tax in his Spring Budget next week.

Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce, has written to the Chancellor to make the case for it to be urgently scrapped as energy prices return to normal levels.

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The Chamber has four further requests, including designing immigration policy around the needs of specific sectors and regions, a cut in National Insurance to boost spending, and a VAT cut for retail and hospitality.

Mr Borthwick said: “We believe these measures would create significant benefits for businesses operating in our region and across the UK and deliver a strong statement of intent internationally.”

The Chamber’s budget wishlist

Here are the points the Chamber has made on behalf of its 1,250 members in the North-east.

The removal of the Energy Profits Levy: “A ‘windfall tax’ may have had justification while windfall profits were being made by energy companies in the wake of Russia’s invasion of Ukraine. Profits have since returned to normal levels and this supertax on just one specific sector should be lifted as a matter of urgency. Independent analysis shows this tax has badly knocked investor confidence in the North Sea, is already costing jobs with tens of thousands more at risk and is likely to result in carbon capture and offshore wind projects being shelved at the very time we should be ramping up investment in decarbonisation and renewables.”

Immigration policy: “We need an immigration policy that works for Scottish businesses. Since the UK left the European single market, businesses right across our region and throughout Scotland have found it increasingly hard to recruit the people and skills they so desperately need. With a shrinking working age population and an extremely tight labour market, some of the workforce of tomorrow will have to come from elsewhere. We urge you to enter serious discussions about developing a workable policy designed around the needs of specific sectors and regions- this cannot be a one size fits all issue.”

Personal taxation: “Consumers need more cash in their pockets, meaning more spending power to stimulate the consumer economy which remains sluggish compared to pre-Covid levels. To benefit people in Scotland, who pay higher rates of income tax above the £28,000 threshold, this should be achieved through further cuts to National Insurance to ensure the benefits are felt right across the UK.”

VAT cut for retail and hospitality: “High street retailers and the hospitality sector continue to face immense challenges. We would urge you to consider further targeted cuts to VAT to support these businesses specifically.”

Improve business conditions: “Finally, we would urge you to consider what further incentives could be pursued to encourage entrepreneurship and scale-up by new businesses. New entrants to the business world face enormous pressures as they seek to grow and create employment opportunities. Our members would like to see taper reliefs in corporate taxation, to reduce the burden on new businesses in their early years to give them the best chance to survive and thrive.”

You can read the full letter here.

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