Update: Harrogate business on the challenging landscape after Spring Statement

Rachel Reeves told Parliament last week that, in announcing welfare cuts to go with tax rises for businesses, she was sticking to her fiscal rules and the aim balancing the budget by 2029/30, so that day-to-day spending is met by tax receipts.

Her announcement followed more bad news for the wider economic outlook when the The Office for Budget Responsibility (OBR) revised down the UK's growth forecast for economic growth for 2025 from 2% to 1%.

Simon Midgely, Owner/Director of Harrogate’s Starling Independent Bar and Cafe and Chair of Harrogate BID, said businesses were being hit hard by rising costs.

“I was disappointed there was no “softening” of the impending 1st April tax and cost burdens.

"At Starling we have increases in staff costs, employers NI and business rates – a triple whammy!

"If we do nothing and carry on as we are these increases drop £35k off our bottom line profit.

"It certainly doesn’t build confidence or inspire growth when you’re battling hard just to stand still.”

After 14 years of austerity and low economic growth under Conservative rule combined with the impact of the Covid pandemic and the cost of living crisis, Harrogate traders are wondering when the good times will return.

Looking ahead, the OBR’s projections for the UK predict GDP growth of 1.9% in 2026, 1.8% in 2027, 1.7% in 2028, and 1.8% in 2029.

Harrogate’s Lib Dem MP Tom Gordon has said that the Chancellor has “missed her chance” to deliver the change needed in Harrogate and Knaresborough by failing to pledge new funding for the North or scrap the ‘jobs tax’ or reform business rates.

“The Spring Statement was a real opportunity for the Government to turn things round for the better,” said Mr Gordon.

"Instead, it will just inflict more pain on our small businesses and high streets, cut public services and, even worse, punch down on disabled people.”

New figures show inflation fell from 3% to 2.8% in the 12 months to February.