The Drum Awards Festival - Official Deadline

-d -h -min -sec

Budget Training Business

With the public purse running dry, here’s how the UK budget impacts marketers


By Hannah Bowler, Senior Reporter

March 23, 2022 | 5 min read

Just as the Money Saving Expert Martin Lewis says he’s out of tools to help people cope with the rising cost of living, the UK chancellor unveiled his spring budget for a year in which inflation could hit 7.4%.

UK govt spring budget

The UK government’s spring budget was announced by chancellor Rishi Sunak / Pexels

“The actions we have taken to sanction Putin’s regime are not cost-free for us at home,” Rishi Sunak said. “There is unusually high uncertainty around the [Ukraine war] outlook and it’s too early to know the full impact on the UK economy.”

With a war in Ukraine, petrol prices up 40p a litre and inflation on course to reach record levels, the ad sector is already grappling with rising business costs and realizing its role in helping UK households cope with the crisis.

“Amid the highest level of inflation we’ve seen in 30 years, consumer motivations are likely to change and, as marketers, we must be responsive to this,” said Chris Jones, managing director, Space & Time. The budget didn’t include an intervention in inflation, which Sunak previously promised would happen if it rose beyond 3.1%.

To relieve business costs the government has cut fuel duty by 5p per litre for the next 12 months, taking roughly £3 off a tank and potentially saving £1,500 for the average lorry. Sunak has also increased the employment allowance to £5,000, two years after he raised it from £3,000 to £4,000.

The Office of Budget Responsibility revised its initial 6% 2022 growth forecast down to 3.8% and said GDP would grow by 1.8% this year and 2.1% in 2024. The OBR also revealed the economy grew by 7.5% in 2021 after a fall of 9.4% in 2020.

Elsewhere in the spring budget, Sunak unveiled a suite of training and development measures after admitting the UK is lagging behind the US and Europe, with its skills spend half of EU levels. “To lift our growth and productivity we need the private sector to train more and invest and innovate more. People. Capital. Ideas. That is how we will create a new culture of enterprise,” he said.

The budget included a 90% subsidy for SMEs that use the Help to Grow: Management training and a 12-month extension to the temporary £1m annual investment allowance. The government also reformed its research and development (R&D) tax relief by adding cloud costs associated with R&D into the relief and including data, science and pure maths.

In a statement to The Drum, Stephen Woodford, chief executive of the Advertising Association, said: “It is only right that employer-led skills training receives recognition. We stand ready to work with the government as trade bodies and professional associations to help close the skills gap and provide opportunities for people seeking to upskill and progress in their careers, while contributing to the wider business economy and responding dynamically to business needs.”

To support the decarbonization of businesses the government has introduced rates exemptions for renewable energy and a 100% relief for low-carbon heating.

Away from business, Sunak committed to cutting the basic rate of income tax from 20% to 19% in 2024, claiming it would be irresponsible to make a tax cut this year. “Tax cuts must be paid for, they must be prioritized and they must fit the economic circumstances of the time,” he said.

When the cut comes into place it will be the first in 16 years. Sunak said: “[A tax cut] requires hard work, prioritization and the willingness to make difficult and often unpopular arguments elsewhere.

“It is only because this government has been prepared to make those difficult but necessary choices to fix our public finances that I can stand here and tell this house that not only are taxes being cut, but that debt is also falling while public spending is increasing.”

Shadow chancellor Rachel Reeves says Rishi Sunak’s “choices are making the cost of living crisis worse, not better.” If she’s right, marketers must be aware that the consumer purse is tightening.

More: Ogilvy UK’s Nina Jasinksi explained what money pressures could mean for brand marketing

Budget Training Business

More from Budget

View all


Industry insights

View all
Add your own content +