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Reaction to the Chancellor’s Spring Statement

23 03 22 Reaction to the Chancellors Spring Statemen hero

Today’s Spring Statement by Chancellor Rishi Sunak was focused on addressing rising cost of living and ongoing energy crisis currently affecting households across the UK and whetting the appetite of UK business for changes to come in autumn.


As expected, the Office for Budget Responsibility (OBR) has revised down economic growth forecasts. UK GDP is now expected to grow by 3.8 per cent in 2022 (previous forecast: 6.0 per cent) and 1.8 per cent in 2023 (prev.: 2.1 per cent) as rising inflation will slow consumer spending. Inflation is now predicted to average 7.4 per cent in 2022 (prev.: 4.0 per cent) and will not fall back below the Bank of England’s 2 per cent target until 2024. The Bank of England itself has recently said it expected inflation to peak at 8 per cent this year. While Capital Economics and Oxford Economics predict a peak of 8.4 per cent and 8.5 per cent, respectively.

“The Chancellor’s Spring Statement had little to offer for commercial property directly other than a comforting sense of confidence and competence in budgetary matters,” said Walter Boettcher, Head of Research & Economics. “The Chancellor offered emergency support for households squeezed by inflation and a nod to the green agenda was welcome.  If there was disappointment, it was related to the suggestion that revisitation of research and development incentives would not occur until the Autumn Budget.”

Some of the measures targeted at cushioning the impact of the cost-of-living crisis include:

  • A 5p cut to fuel duty, coming into effect at 6pm today.

  • An increase in the threshold for paying National Insurance by £3,000, saving a typical employee around £330 per year.

  • Doubling in the size of the Household Support Fund to support vulnerable households to £1 billion.

In recent weeks, the Government had already announced a £150 non-repayable rebate for households in England in council tax bands A to D, a £200 energy bill loan and an increase in the National Living Wage from £8.91 an hour to £9.50 from April.

Oliver Kolodseike, Head of Economic Research, said: “We welcome the announcement of VAT relief on residential repairs and maintenance to encourage people to improve the energy efficiency of their home. With energy prices skyrocketing and the Government committing to net zero by 2050, this is a further step in the right direction. The Chancellor pointed out that a typical family having roof top solar panels installed will save more than £1,000 in total on installation, and then £300 annually on their energy bills. The changes will take effect from April 2022. However, more needs to be done for the Government to achieve its commitments outlined in the Net Zero Strategy: Build Back Greener paper, published last October.”

James Pay, Head of Client Sustainability, said: “This statement shows the importance of remembering that sustainability is not just about the reduction of carbon emissions to meet the Net Zero 2050 target. It needs to support a sustainable future/development for all social and economic groups as reflected by the (carbon counter-intuitive) temporary fuel duty cut and the business rates relief for SMEs. The mooted development of minimum efficiency standards for the private rental sector are welcomed but their confirmation and implementation needs to arrive faster. While, the time-limited VAT zero rate for the installation of ESMs will hopefully provide impetuous to this much needed retrofitting of homes.  However is the time limit long enough to take in to account any supply chain issues that could be exacerbated by a rush for "green" brought on by this cut?”

John Webber, Head of Rating, added: “It was disappointing that the ‘elephant in the room’, business rates was largely ignored, despite the impact that ultra-high rates bills has had on businesses in recent years. Retailers and other high street operators will be now considering their business plans for next year and looking closely at their future business rates liabilities, particularly when the Covid-related reliefs come to an end. It is essential the Chancellor provides reassurance that rates bills next year will immediately reflect the lower rents we are seeing in the market now - providing incentives for businesses to keep or expand space and for property investors to invest in the sector across the UK.

“Without this reassurance the government’s levelling up agenda will be meaningless. And the high street unlikely to get back on its feet. We are disappointed the Chancellor was not more forthright in his Statement today.”


Related Experts

Walter Boettcher

Head of Research and Economics

Research and Forecasting

London - West End

I am the the Chief Economist at global property advisors Colliers International based in London.  I am a research economist identifying timely research topics and directing research and forecasting outputs.

I have over 20 years UK and European property industry experience and extensive expertise across a wide range of property sectors and related industries.

I participate regularly in industry panel discussions, but am focused more on direct client engagement with institutions, property companies, banks, and private investors. A regular media commentator, I have a wide range of national and broadcast experience.

I joined Colliers International in August 2007 after several years at a private property company where he was responsible for managing a mixed portfolio of London residential, retail and office assets.

Previously, I worked in a few London property advisory firms, a geodemographic company as well as a few youthful sojourns in the US offshore oil industry, local government and entertainment business.

I am an economics graduate of the University of Texas at Austin and received his PhD from the Faculty of Science at University College London.  I am a member of Lambda Alpha International and the Society of Property Researchers.

Perhaps best known for my alternative take on property economics and investment, I am a keen proponent of UK regional development and infrastructure investment.

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Oliver Kolodseike

Director of Economics and Research

Research and Forecasting

London - West End

Oliver is Head of Economic Research and leads the quarterly UK forecasting process including the publication of Colliers' Real Estate Investment Forecasts (REIF) report. He also  authors the monthly Property Snapshot and, quarterly Scotland Snapshot. Prior to joining Colliers, he worked for the Centre for Economics and Business Research and IHS Markit. Oliver holds a BA in Economics from  Georg-August University Göttingen (Germany) and an MSc in Economics from Exeter University.

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James Pay

Head of Sustainability

Operations

London - West End

James has joined Colliers to help drive our sustainability offering and ensure that we are well equipped to meet and advise on the challenges of the Climate Emergency in a practical and meaningful way for our clients and in-house.

Prior to joining Colliers, James worked in the construction and demolition industries and has over 12 years’ experience working within sustainability for principal contractors and engineering consultancies.

During this time, he helped drive sustainability performance with a particular focus on strategy, the circular economy, carbon reduction and the setting of Science Based Targets, and sustainable certifications such as BREEAM and WELL. He has delivered the sustainability requirements on projects across London, including a global investment bank’s new London Headquarters, the Francis Crick Institute, Chelsea Barracks Phase 4, 100 Bishopsgate, 22 Bishopsgate and Crossrail.

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John Webber

Head of Rating

Rating

Birmingham

I have over 30 years’ experience in the rating industry and lead a 90 plus rating team at Colliers International.  When I took over responsibility for the team in 2005, it consisted of only a dozen people and has now grown into one of the leading rating advisory teams in the country.  I am a member of Colliers International Management Executive as well as sitting on the company’s promotion panel. 

I am regularly called upon by the national media to give my views on a range of business rates issues and I am vocal commentator on the 2017 Revaluation.

I started my career in the Valuation Office Agency in Kidderminster.  I joined Gerald Eve in 2000 where I spent 10 years before moving to Gooch Webster (now Colliers International). I sit on the National Retail Panel of Rating Surveyors Association which provides guidance on how the RSA town committees work with the VOA and valuation matters.  John sits on the RICS Rating Diploma Committee having passed the prestigious qualification in 2014.

Philip Harrison and I founded 'Accurates' in 2007, the Collier's Compliance and Audit team, which although forms an integral part of the Rating Team is now a leading brand in its own right.

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Suzy Simpson

Head of Content, Communications and PR

PR

London - West End

As Head of Content, Communications & PR for Colliers in the UK, I am responsible for driving the strategic direction of corporate communications, media relations, and the programming and production of multi-channel content to engage external and internal audiences across the UK.

Get in touch for help with: 

  • Content Communication Strategy 
  • Media Relations
  • Corporate & Internal Communications
  • Media Training & Personal Brand Training

 

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