CBI @10am: What does the chancellor's statement mean for business?

Speakers:

• Rain Newton-Smith, Chief Economist, CBI
• Nicole Sykes, Director of Policy and Communications, Pro Bono Economics
• Nigel Pocklington, Chief Executive, Good Energy
• Ceri Thomas, Editor and Partner, Tortoise Media (Chair)

In this session

Rain Newton-Smith:

• It was a difficult moment to present an economic forecast – the Chancellor had hoped he could present good news but the outlook for growth and inflation is bleak.
• Now expecting growth at 3.8% and below 2% next year and inflation is expected to 7.4% and peak at 8.7% in the final quarter this year.
• Energy prices have softened but we are going to see high numbers and lower income households will be more exposed.
• CBI view - he set out a vision for what will drive growth and productivity over the longer-term, but some disappointments as nothing to help businesses deal with higher energy costs now. Could have looked at loan schemes to ease pressures on cash-flow.
• Now is moment to accelerate transition to the green economy - did a few measures but felt like tinkering round the edges.
• The CBI will continue to call on government to support businesses in the immediate term and work with business on long-term growth priorities.

Nicole Sykes:

• The charity sector has bene under a lot of pressure over the past couple of years - 1 in 4 charities ended with an income drop as they couldn't fundraise, but demand increased.
• 75% charity managers are concerned about staff burn-out and this was before the cost-of-living crisis.
• Many families on universal credit already struggling to make having to choose between food or fuel. Worth noting, even before inflation was rising 1 in 3 of lowest income households struggling to make housing payments, and 4 in 10 struggling with debt.
• In low incomes, still supported by the benefits system and many are in work. When we turn to what business can do in this space, they need to think about their own employees in their own workforces.
• Things like foodbanks will be hit on the demand and donations side as those on middle incomes feel the squeeze. Don’t just provide food but also other essential goods – fridges, and mattress for example.
• Estimating a £2bn fall in charity income as a whole over the pandemic period.
• Over the pandemic, we’ve seen huge response from employers regarding mental health and wellbeing so make sure your staff are aware of what you offer.
• When it comes to consumers and customers - energy companies and banks do have good partnerships with charities. Have a look to see "are we doing everything we can?"
• Businesses should also be proactively engaging with lower paid members of staff to understand pressures they’re facing - those on low incomes, younger staff with student loans, families needing childcare may also be facing financial strains.
• Think about commuting / working hours / childcare to help ease some of the pressures.

Nigel Pocklington:

• Very disappointing Spring Statement from an energy point of view – but might be more in the upcoming energy strategy.
• Prices will go up again and that will be a source of further anxiety for households. The response and support from government is still inadequate – referring to this as ‘heat or eat’
• A million households in the UK which are off the gas grid and the price has tripled over the past month – causing even more pain for those households.
• Ukraine situation has been a sharp shock to energy market which is beyond the Chancellor’s control – but there are a couple of areas that could make a big different to bills:

1. Treatment of the cost of failed energy suppliers.
2. Social and environmental costs on household bills – we’re paying for warm home discount scheme / home insulation etc through taxation, so could have saved money on energy bills.

• Some welcome changes: one for domestic customers and one for businesses - rates rebate for business investing in green technology e.g., solar panels, wind turbines etc. Same for households. We have the worst insulated and heated housing stock in Europe - any incentive to improve insulation is welcome. Helpful for people to have the capital to fix this but what they can't do it help people pay their bills next month.
• Limit to what energy suppliers can do as many run on very thin margins