Spring Statement 'blow for rural businesses' with calls for more support

The Treasury announced a number of measures designed to help household incomes as the cost of living crisis bites, but there have been calls for more support to help the countryside “thrive”.

Cuts in fuel duty and an increase in the National Insurance threshold were included in the package, but Rishi Sunak was accused of doing “little to help rural households facing the most difficulty”.

One of the measures announced was the removal of VAT on green home improvements such as the installation of solar panels or a heat pump.

The Country Land and Business Association said this would be hugely beneficial to people looking to decarbonise their homes, but they wanted to see more from Rishi Sunak.

Victoria Vyvyan, Deputy President of the CLA, said: “While the Chancellor’s Spring Statement had some positive elements, including the increase in the threshold for National Insurance and a reduction in VAT on energy-saving technologies in homes, there was insufficient support for the rural economy and hospitality businesses.

“The failure to keep VAT at 12.5 per cent for hospitality businesses will have a sizable impact on profitability at an already testing time for many.

“This is a blow for rural businesses that are being asked to diversify, and the reduction in business rates will not plug this gap.

“If the Government is serious about supporting the countryside, it must create the environment for rural businesses to thrive.”

The cut in fuel duty was available almost instantly, with 5p per litre removed at the pump from 6pm last night.

But a countryside charity has said the change will make “no real world difference”.

The CPRE said: “It would have been better for the government to think strategically about how to help those people suffering most from the cost of living crisis in a way that enhances our ability to tackle the climate emergency.

“Saving the average family £3 to fill up their car, which is what a 5p cut in fuel duty amounts to, will make no real world difference.”

Petrol prices have already increased by 18p per litre in a month.

Motorists have been hit by record pump prices and figures from Experian Catalist show the average cost of a litre of petrol at UK forecourts on Tuesday was 167.3p, while diesel was 179.7p.

Announcing the duty cut in his Spring Statement, Mr Sunak said the UK Government wanted people to know they will “stand by them” in dealing with rising living costs.

He told MPs: “Today I can announce that for only the second time in 20 years, fuel duty will be cut.

“Not by one, not even by two, but by 5p per litre. The biggest cut to all fuel duty rates – ever.

“While some have called for the cut to last until August, I have decided it will be in place until March next year.

“A full 12 months.

“Together with the freeze, it’s a tax cut this year for hard-working families and businesses worth over £5 billion, and it will take effect from 6pm tonight.”

The tax cut was cautiously welcomed by the motoring industry, but likewise there were suggestions that the Chancellor could have gone further.

Rod McKenzie, executive director at the Road Haulage Association, described cutting duty as “a common sense move” that will “be a boost for the economy”, but he warned “more could have been done” to help with transport costs.

He said: “The Chancellor missed an opportunity to announce a rebate to relieve more pressure on businesses.

“We’ll continue to press the Government hard for this measure as firms grapple with huge operating cost hikes.”