BCC welcomes Chancellor's 'cost of living' support package but says businesses also need help

26 May 2022

Reacting to news of today’s measures announced by the Chancellor, Hannah Essex, Co-Executive Director of the British Chambers of Commerce, said:  “The sheer scale of the cost-of living crisis facing the British public means the Government is absolutely right to provide additional support to those worst affected.  

“For business, the toxic mix of inflation, raw material costs and supply chain disruption is the flip-side of the coin to the problems facing consumers.  

“Unless steps are also taken to ease business costs, they will likely feed into the inflationary pressure on the economy and quickly eat into the financial support announced today. 

“A reduction in VAT to 5% on businesses’ energy bills would directly alleviate some of this pressure to raise prices. 

“The Treasury must urgently consider the actions set out in our call for an Emergency Budget which would provide a way to break the inflationary cycle. 

“If we can ease the pressure on businesses then they can keep a lid on the price rises.  Firms will then have the breathing space they need to raise productivity and strengthen the economy. 

“But a change of course is needed now. If the Government does not act quickly then rising costs will put our economy in a stranglehold.”  

Measures unveiled by the Chancellor include:

• Every household in the UK is to get an energy bill discount of £400
• Those on the lowest incomes – around eight million people supported through welfare system – will receive one-off cost of living payment of £650 in two lump sums
• Pensioners who receive winter fuel payment will receive a one-off payment of £300
• Six million people who receive disability allowance will get a payment of £150
• There will be a temporary windfall tax on the profits of oil and gas companies at a rate of 25%