Following Rishi Sunak’s Spending Review and warning of ‘economic emergency’, we spoke to our very own Steven Mason, insolvency practitioner and senior manager at Inquesta, for his expert comment.
On the announcement Steven said: “Rishi Sunak made no effort to downplay the difficulties facing the country in his Spending Review.
“Setting out his position, the chancellor solemnly spoke of the country’s ‘economic emergency’.
“Most concerning to business owners was the acknowledgement that this crisis has only just begun, as news of Britain’s worst recession in 300 years was laid before Parliament.
“The government committed significant funds to stimulate growth, including the announcement of a £4bn “levelling up” fund to pay for upgrading local infrastructure across the country.
“Defence spending will increase, a boost likely to be felt in several sectors. There may also be some comfort in the news that, whilst unemployment is forecast to reach 7.5 per cent, it is a smaller figure than initially predicted.
“There were plenty of headline-grabbing measures, such as a partial public sector pay freeze. The freeze may be justified as being in line with difficulties in the private sector, but it is likely to reduce the spending power of millions of consumers, something which will be felt by many businesses.
“It is important to reiterate that the Spending Review was not a budget. There was no mention of tax increases.
“That “Day of Reckoning” is scheduled for March 2021. It is then that the chancellor will be forced to confront the question of how to pay down the UK’s enormous deficit.
“Amidst the potential backdrop of a no-deal Brexit, and no guarantee the pandemic will be over, it is a date that will be feared by many business owners.”