Keeping London at the forefront of global business
working with and for the whole UK
Big, bold but balanced? – Reacting to the 2020 Budget
11 March 2020
Comprehensive action is needed on Coronavirus – that was the kick off to today’s Budget, as the Chancellor set out what he claimed was ‘a world leading response’ to the virus.
Businesses will be reassured by the bold tone of the Budget. The Chancellor made clear commitments to refunding companies with fewer than 250 staff for 14 days’ statutory sick pay, offering loans of up to £1.2m to support small and medium business during this period, and abolishing business rates paid by shops, cinemas, restaurants, music venues and more for the coming year. The discount for pubs was also raised to £5,000, and alcohol duties were frozen.
Moving to the Government’s future vision for prosperity, he repeated “this budget gets it done” before committing to a package of measures to raise the incomes of the lowest paid. From start-up loans to small business tax cuts, from investment in new technology to “new ideas”, there was a lot of money put on the table today, including for educational institutions around the UK, with more detail promised in the Spending Review. Encouragingly, funding was also confirmed for improving Further Education buildings and estates.
On the net-zero carbon agenda, the commitments were varied – there was a sense of things to come but many of them not immediately. Shifting the focus from taxing electricity to increasing the penalties for gas, introducing a tax on plastic packaging from 2022, and ensuring better access to rapid charging points were all in the mix, as was support for flood recovery and funding for future flood defences.
Moving onto infrastructure, he committed to the widely trailed £600bn investment, confirmed the review of the Green Book and promised to move 22,000 civil servants to locations around the country.
Perhaps the best line was: “If the country needs it, we will build it”. This came as a rallying cry that preceded the commitment to extending full fibre, maximising 4G, investing in rail and roads, filling potholes, connecting up ports and airports. However, once again this was light on detail but paves the way for good news in the National Infrastructure Strategy, as the levels of GDP in discussion are more than enough to deliver a full package of investment across the UK, including Crossrail 2.
Turning to housing, he promised reforms would come from the Secretary of State, to be unveiled tomorrow, that would bring our planning system into the 21st century. Ahead of this, he confirmed the extension to the Affordable Homes Programme, allocated £1bn from the Housing Infrastructure Fund to build c. 70,000 new homes across the UK and committed to £650m of funding to help rough sleepers into permanent accommodation.
Rounding off, he promised to back public services – from our education system to the NHS – and committed once again to making sure that the Government’s response to the Coronavirus will help to see us through this period and successfully into the future. Overall, a bold and hopeful Budget, which sought to reassure at a very unsettling time for our businesses and our economy. We’d like to see more detail, as ever, and will continue to advocate for the investment our capital needs to thrive.
Responding to Chancellor Rishi Sunak’s Budget, Jasmine Whitbread, Chief Executive of London First, said:
“With a reassuringly bold tone, the Chancellor rightly committed to boost the NHS and shore up business confidence in the face of the immediate threat of coronavirus.
“Measures like the cut to National Insurance Contributions, temporary changes to sick pay and extended relief on business rates will provide much-needed short-term support for businesses and their staff at a time of maximum uncertainty.
“Beyond the immediate priority of tackling coronavirus, focusing on infrastructure investment across the UK is the right decision. The Chancellor’s commitment to build what the country needs, from 5G to new roads and rail is welcome but must be followed up with swift action. Publishing the long-overdue National Infrastructure Strategy is now critical to give industry the certainty it needs to invest in keeping the whole of the UK connected, moving and plugged into the global economy.
“We support the Government’s levelling-up agenda, and businesses in the capital wholeheartedly back HS2 and Northern Powerhouse Rail. We now need the missing piece of the jigsaw which will help improve rail connectivity — Crossrail 2, which will deliver much-needed additional capacity across the South East, and move people away from transport bottlenecks such as Euston, where HS2 terminates. The Government must also prioritise short-term assistance for the aviation sector as it deals with Coronavirus, alongside providing long-term certainty to support the growth of the industry.
“Given the current health outlook, Brexit can seem like a distant problem. While support for exporters is positive the key for business is what the future relationship with our biggest trading partner will look like.”