The Spring Budget: Move along, nothing much to see
8 March 2017
This year’s first Budget was an opportunity for the Chancellor to make some bold investment decisions to prepare London and the UK for Brexit. Instead, we saw some tinkering at the margins, moving penny-packets of public spending around.
The changes to business rates are a prime example. The flagship national grant of £300m to councils to provide discretionary relief represents about 1% of the take from the tax. It will have little impact on London businesses struggling with higher bills. This tax needs root and branch reform, starting with annual revaluations and moving to full devolution to London government. We are looking forward to hearing the Chancellor’s plans.
Increased investment in education is always welcome, so the decisions around technical education, classroom refurbishment and new schools are great – but from London’s perspective make little sense when our schools are facing millions of pounds worth of budget cuts as a result of changes to the national funding formula. The London Challenge, which amongst other things increased spending per pupil, has seen a radical improvement in school performance and is one of the most successful public policy interventions in recent decades. Putting it into reverse ahead of Brexit makes no sense.
One welcome step forward, albeit a baby step, was the memorandum with the London government on devolution. As well as proposing more talks, there is a specific set of proposals around a pilot to capture land value uplift as a means of part-paying for new transport investment. This is something all cities should be interested in.
Our focus is moving to April’s Industrial Strategy consultation; this will be the mechanism to make the case to government for the investment that London and the UK need ahead of the Autumn Budget. Let’s hope it is third time lucky with Chancellor Hammond.
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