COVID-19 recovery budget leaves ‘build back better’ behind

COVID-19 recovery budget leaves ‘build back better’ behind

BLOG · BY TTF CEO, DAVID HOPKINS · 5 March 2021

There were many things to like in the Budget for the short-term, but with few long-term measures, it appears the Government aims to “build back better” has been postponed. We’d like the Government to know it doesn’t need to wait for the future. A more productive, low carbon recovery can start today.

Chancellor Rishi Sunak this week announced a further £65bn in financial support for this year and next to support the economic recovery from COVID-19. This takes total government spending on the crisis to more than £400bn, emphasising the severity of the impact the pandemic has had on the UK. Almost all of the Budget announcements centered on emergency recovery and support, rather than long-term planning for the economy.

Of course, it is appropriate that the Budget took measures to support economic recovery, and stem potential job losses, including through the extension of the Coronavirus Job Retention scheme through until September, more support for the self-employed, and a new Recovery Loan Scheme beginning from 6 April.

On housing, the Government did a good job in boosting demand – through extending the stamp duty holiday till the end of September as well as new help to secure mortgages – but there was a distinct lack of announcements to increase the supply or quality of housing into the market. The £10m of seed funding for MHCLG to set up an MMC Taskforce is welcome but again assumes solutions will only be available in the future, rather than seeing the innovation which can be put into practice today.

It was also disappointing that there was no real effort to aid the retrofit of existing housing stock. After the struggles of the Green Homes Programme, it seems the Chancellor was happy to leave it out altogether. This is a shame as refurbishment and retrofit provide “shovel ready” projects around the country which can create local employment as well as future proof homes today against rising energy bills and a changing climate.

As the Government seeks to balance the books, a rise in the UK Corporation Tax rate to 25% in 2023 featured among announcements, as well as the freezing of thresholds for income tax till 2026. However, this blow was softened for businesses with the new 130% ‘Super Deduction’, which will allow companies to cut their taxes by up to 25p for every pound they invest in capital.

Eight freeport locations were also announced across England, including East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames, and Teesside. Given some of the issues being faced by traders from Brexit, they may well become popular as “in-transit hubs” for goods where the final destination is the UK or Ireland, or Northern Ireland back to the EU. TTF will be bringing members up to date on this as more information is available.

There were many things to like in the Budget for the short-term, but with few long-term measures, it appears the Government aims to “build back better” has been postponed. We’d like the Government to know it doesn’t need to wait for the future. A more productive, low carbon recovery can start today.

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