What the Chancellor's mini-budget means for food and drink businesses
23 September 2022
The Chancellor delivered the Growth Plan 2022, which had been dubbed a ‘mini-budget’, but now appears to be of the boldest fiscal events in recent history.
- Business insights & economics
- Economic insights
Driving economic growth is “the government’s central mission”. They aim to achieve a trend growth rate of 2.5% and to achieve this will need to use “every tool at government’s disposal and requiring each policy and initiative to be measured against a defining test of whether it helps or hinders growth”. The Chancellor kicked off by outlining the government’s energy measures announced earlier this week, stressing that their help for households and businesses would reduce peak inflation by 5%, and will lower wider cost of living pressures.
Policy announcements focused on areas including:
- Investment: creating the right conditions and removing barriers to the flow of private capital – whether taxes or regulation.
- Skilled employment: helping the unemployed into work and those in jobs secure better paid work.
- Infrastructure: accelerating the construction of vital infrastructure projects by liberalising the planning system and streamlining consultation and approval requirements.
- Enterprise: cutting red tape and freeing business to grow and invest.
While policy announcements focused on incentivising investment – including changes to the Annual Investment Allowance and introduction of Investment Zones – there was a strong narrative throughout about the need to support businesses by reducing barriers caused by unnecessary and excessive regulation to allow businesses to realise their potential. While no specific regulations were commented on, the Chancellor did confirm that later this autumn, the government will bring forward a set of regulatory changes to support higher economic growth. The government also confirmed that they will automatically sunset EU regulations by December 2023, requiring departments to review, replace or repeal retained EU law.
The Chancellor also today promised to publish a medium-term fiscal plan “in due course”, accompanied by an OBR forecast. With £72bn of additional borrowing expected this financial year, the government may now look to cut spending in other areas, perhaps quite drastically. A further fiscal event (i.e. full Budget) remains likely before the end of this year, given the Chancellor’s promises on the delivery of forecasting and a need to set departmental budgets. However, in that future statement the Chancellor is likely to have less in the way of potential giveaways and far less leeway if the measures he’s announced today are struggling to deliver.
Julie Byers- Public Affairs Manager