In its analysis of Chancellor Rishi Sunak’s Spring Statement, the Bathroom Manufacturers Association (BMA) stated inflation was “concerning” but welcomed VAT removal on energy-efficient refurbishments.

Referencing the ongoing Ukraine war, Sunak promised the unprecedented sanctions are working, and a stronger more secure economy for the UK is part of our response to the crisis. It does however, present a risk and the full impact is yet to be understood.

The Office of Budget Responsibility said there is a high uncertainty about the outlook, forecasting growth at 3.8%, followed by lower growth in 2023 and 2024 and 7.4% inflation this year.

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The BMA stated this may affect manufacturers’ forward budgets, as lower growth will impact consumer confidence and higher inflation will reduce spending on home improvements.

It also warned with employment statistics showing ongoing low employment, the shortage of installers and labour will not ease any time soon.

However, it welcomed the cut in duty fuel which would help bathroom manufacturers with their fleet and the VAT relief of 0% on energy efficient improvements in the home for the next five years.

The BMA has campaigned with the National Home Improvement Council for a cut in VAT for energy-efficient refurbishments for years and believes bathroom refits could benefit “vicariously”.

In last year’s budget, the BMA said the Government had missed an opportunity for the bathroom industry to reduce carbon in homes through home upgrades.

It also welcomed the increase in threshold for National Insurance, to mitigate the pressure on wage increases and appreciated plans in the autumn budget to cut tax rates on business investment.

Chief executive of the BMA Tom Reynolds said: “Following the confirmation that inflation is at its highest level for three decades, this is a concerning time for the whole of economy.

“Bathroom manufacturers are performing well after a strong recovery after the pandemic, but we do not operate in an economic vacuum.

“The industry will therefore welcome the cut to fuel duty. This will help companies manage the spiralling costs of logistics and fleet management and will help consumers with motoring costs.

“BMA, along with partner organisations like the FMB (Federation of Master Builders), have been calling for VAT removal on home energy efficiency improvements for years. So, it’s great to see the Chancellor finally make this move.

“Retrofit is an important way to tackle the UK’s reliance on imported energy, including Russian gas, and bathroom manufacturers are keen to play their role in home refurbishment.”

“While welcome, the tax cuts delivered through the NI threshold increase in July and through a penny cut in income tax by the end of the Parliament, will not help the cost-of-living crisis now.

The NI hike next month will dent consumer spending power and increase company wage bills immediately.”