Chancellor Kwarteng to Announce Government’s Growth Plan

Chancellor of the Exchequer, Kwasi Kwarteng, is set to announce details of the Government’s Growth Plan on 23^rd September; this will follow on from Truss’ Energy Price Guarantee announced on 8^th September. Kwarteng is expected to reverse the national insurance rise bought in last year by previous Chancellor, Rishi Sunak, freeze corporation tax and introduce low tax “enterprise zones.” In preparation for the announcement, representatives of the UK hospitality industry have reiterated the necessity for urgent financial support for the sector.

Surging inflation has impacted the cost-of-living and this has been reflected in what the Financial Times has dubbed, a ‘cost-of-business’ crisis. Some have estimated that inflation will add a further £800 million to business rates in the coming year. The hospitality industry has voiced concerns by penning a letter to the Chancellor stating that businesses ‘could wait no longer’ for further clarity on the level of government support available. The period of National Mourning for Her Majesty The Queen delayed announcements on intended support packages and there are fears that businesses are now entering into new, costly fixed-term contracts, with little knowledge as to how they will be supported further down the line. Moreover, whilst a short-term relief will provide a much-needed lifeline for businesses, long-term plans beyond the six months offered by the government will undoubtedly be integral to the sectors’ survival.

It remains unclear what support the government has prepared for businesses, though Truss and Kwarteng have made clear their desire to prioritise growth at all costs. This is further reflected in the Treasury’s insistence that Kwarteng’s announcement will not be an emergency mini-budget, but a ‘growth plan’ for the country. Some hospitality trade bodies have called for a reduction in VAT on food and drink and a temporary cancellation of business rates for the sector. Furthermore, the Prime Minister is said to be considering scrapping mandatory calorie labelling which commentators have stated should ease business costs, though this will only be for businesses with more than 250 employees.

You can stay up to date with government updates here and read a summary of the emergency budget after its announcement, here.