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23rd February 2023

Spring budget must ease the squeeze

Chambers Wales South East, South West and Mid and the British Chambers of Commerce (BCC) are calling on the Chancellor to use the Spring Budget to relieve cost and recruitment pressures on business.

The call follows the release of new research which reveals how low business confidence has fallen at the start of 2023.

The findings from the survey, of more than 1,000 firms, reveal that almost two thirds of businesses (65%) plan to raise prices due to cost pressures and that more than half (52%) are consistently experiencing difficulties recruiting staff.

Almost half (47%) of businesses say paying energy bills will be difficult when the current business support package ends, while 4% state that they will not be able to pay their bills at all once the scheme ends on 31 March.

The survey backs up findings from both the BCC and Chambers Wales South East, South West and Mid’s recent quarterly economic surveys.

In Wales, over two thirds of businesses (67%) expected the prices of their goods and services to rise over the next three months, citing pressures from labour, raw materials, fuel and utility costs.

Recruitment also remains an ongoing challenge as over three quarters of businesses in Wales (77%) experienced difficulties recruiting staff in the last quarter.

Paul Slevin, Executive Chair of Chambers Wales South East, South West and Mid, said: “Businesses in Wales have faced a difficult few years and understandably this has knocked business confidence. With continuing cost pressures and upcoming changes to support for energy bills, many firms know that the year ahead will be tough too.

“Businesses will be looking towards the Spring Budget with the hope that the Chancellor recognises their capabilities and resilience and puts in place measures to enable investment and growth.”

Shevaun Haviland, Director General of the BCC, said: “This snapshot of the state of play for business at the start of 2023 sets out exactly why the Chancellor must act in his budget to fuel investment in the UK.

“We know we have a tough year ahead. With costs piling up on their doorsteps and so much uncertainty on Government policies, there is currently little incentive for firms to risk either their dwindling cash reserves or fresh loans on new projects.

“Firms know that the UK’s finances are tight, but the Chancellor needs to show more faith in the ability and talent of our businesses. If they can see the Government is prepared to invest in them, by taking action on childcare, energy costs, green funding and Solvency II, then the future could soon look a lot rosier and greener.”

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