Spring Statement: EOA welcomes cut to fuel duty and extra support for SMEs
The EOA has welcomed the cut to fuel duty and extra support for SMEs announced by Rishi Sunak in his Spring Statement in the House of Commons today.
Against a backdrop of rising fuel, energy and food costs amid the war in Ukraine, the Chancellor was under pressure to deliver some much-needed respite for people and businesses in the UK.
His statement came on the day it was revealed that prices had risen by 6.2% in the 12 months to February and that inflation is likely to average 7.4% for the rest of this year.
Mr Sunak began by announcing that fuel duty will be cut by 5p a litre from 6pm today, until March 2023, to combat a record-breaking spike in prices at the pumps, in what he described as “the biggest cut to all fuel duty rates ever” and only the second time in 20 years fuel duty had been cut.
This will come as a big relief to a big section of our membership who rely on fuel in the day-to-day running of their businesses, such as hauliers and those in the manufacturing and food industries.
According to motoring group the RAC, the reduction in fuel duty will take £3.30 off the cost of filling a typical 55-litre family car.
SMEs get helping hand
Mr Sunak went on to outline a tax plan as part of his Spring Statement that he said would deliver the “biggest net cut for personal taxes for over a quarter of a century”. This included announcing:
- A cut to the basic rate of income tax from 20% to 19% by the end of Parliament in 2024.
- Raising the National Insurance threshold by £3,000, meaning people must earn £12,570 per year before paying income tax or NI, which he said was a tax cut for 30 million people worth over £330 a year.
- VAT will be scrapped on home energy-saving measures such as insulation, solar panels and heat pumps.
He went on to say he wanted to provide immediate assistance for small and medium-sized businesses (SMEs).
The vast majority of the businesses that make up the employee ownership sector are SMEs, with more than 550 employed-owned SME companies currently in the UK.
As well as retail, hospitality and leisure sectors getting a 50% discount in business rates up to £110,000 from April – a tax cut for small businesses worth £1.7bn, Mr Sunak announced that the Employment Allowance will increase to £5,000 in two week’ time, which he said was a tax cut worth up to £1,000 for half a million small businesses.
Employee ownership can help bring certainty in uncertain times
Having come through an extended period of uncertainty because of Brexit, the pandemic and now the Ukraine conflict, any extra help for businesses is to be welcomed.
In these uncertain times, however, the EOA is eager to reiterate the certainty that is delivered though employee ownership:
- The certainty that all employees hold shared responsibility for the business through their stake, leading to more collaboration that puts the business first.
- The certainty that through a culture of engagement and representation, every opinion and voice is listened too, leading to better decision making and buy in and fairer outcomes.
- And the certainty that these businesses manage risks as they think about the long-term health of the business.
EOA Chief Executive James de le Vingne has been embarking on a tour of members since joining the organisation in mid-February and said: “In my chats with employee owners across the country over the last six weeks, I have gained a clear sense that they know what is happening in the business and hence have a high level of certainty about both their own and the businesses future.
“This comes from an ownership culture that delivers high levels of transparency and employee engagement and an ownership structure that enables a shared stake.
“As our members often cite, this means that when times become hard or uncertain, as we have seen in recent years, employee ownership provides an empowerment and employees pull together because they all have one common purpose and a shared interest as owners of the business to ask ‘what can I do to make a difference’, which in turns fosters resilience to weather such periods.”
Karen Mosley, Managing Director at employee-owned HLM Architects, recently told the EOA: “Moving forward, no-one knows what lies ahead. The only thing that’s certain is change.
“The most important thing a business can do is view its surroundings through the widest lens, through the eyes of its staff, and encourage innovative thinking. That will enable it to remain resilient, to flex and change and stay fit for the future.”