Spring statement stale before it started – Growth talk rings hollow as small firms struggle

The Chancellor spoke of stability and growth, but with confidence falling, costs rising and global turmoil intensifying, many small businesses fear the economic reality has already overtaken the promises.

You may well think this strange, but I felt sorry for the Chancellor this lunchtime. She had to deliver her Spring Statement knowing it was out of date before she stood up in the House of Commons. The current world changing events are shifting the sands under our feet by the minute.

The Chancellor had to perform and keep an upbeat ‘face’ on it. She talked about stability and growth. She needs confident businesses that have the certainty to invest to generate growth. She needs their money coming in to pay for all the rest of it: the NHS, education, defence etc and the rug has been pulled out from under her. It’s too early to put forecasts on the impact on the world economy and on our UK economy, of the current geopolitical upheaval, but the runes aren’t good for either stability or growth.

It’s not as if things were going swimmingly well for UK business before the Middle East conflagrated. Confidence was down again according to the IoD monthly survey for February. More April increases in business costs are at the back of business owners’ minds. Those will be the straw, added to the pile of NIC, business rate, wage increases already endured, that will be the final one for many small and micro businesses. It’s probable that on the back of oil price increases, everything else will go up again. Grocery price inflation has already risen to 4.3% in the four weeks to 22 February, after falling to 4% in January from 4.7% in December, according to the market research company Worldpanel. Business materials and operational costs will all cost more too while oil, gas, energy, fuel, shipping, transport are all in the hot spot.

The Chancellor bravely talked about growth. Apparently, our growth is the fastest in the G7. I was wondering as she spoke why, if that’s the case, our Business111.com micro businesses aren’t telling us how well they’re doing. They aren’t feeling it. As I walked a short street in central London this morning, in an affluent area with lots of highly paid workers around, I spotted three restaurants with signs saying ‘We’ve ceased trading. Thank you for all your support’. Clearly, they didn’t have enough support. Some of that may have been down to unsupportive customers but the Government hasn’t provided support either. It’s loaded on ever increasing costs and the hospitality sector has been one of the hardest hit. For some the final straw has been reached.

We’d been told today’s Spring Statement wasn’t about tax changes, but many were hoping for a lifeline. It didn’t come and now it looks like the predicted falls in inflation and interested rates won’t come any time soon either. I may have felt sorry for the Chancellor at lunchtime but it’s micro and small business owners I care most about now.

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