Chancellor did not present longer-term approach to bring UK economy back on a ‘stable footing’
Following yesterday’s 2021 Budget announcement, presented by Chancellor Rishi Sunak to Parliament, Rebecca Evans MS, Minister for Finance and Trefnydd at the Welsh Government, has expressed concerns over unemployment rates and the UK Government’s longer-term economy ambitions.
The chancellor says that the budget presents a three-part plan to protect jobs and livelihoods. This will be done, he notes, by offering support, fixing finances and building future economy, as the UK looks to bounce back from the COVID-19 pandemic while the vaccination programme continues to roll out nationwide.
During his speech to Parliament, Rishi said that the budget presents an “investment-led recovery” and “unites and levels up” the UK’s economy.
However, Welsh’s finance minister said that despite the chancellor’s intentions for an investment-led recovery, the budget fails to provide the additional capital stimulus needed to lay the foundations, with no additional money for capital spend in Wales next year.
Rebecca commented: “The outlook for the economy, while still hugely challenging, looks better than it did at the time of the Office for Budget Responsibility’s (OBR) last forecast in November.
“Even so, by 2026, the level of GDP is expected to be approximately 3.0% smaller than the level expected pre-pandemic reflecting the long term economic cost or scarring effect of the pandemic. This will particularly penalise disadvantaged groups and young people as they try and get a foothold in the labour market.”
Rebecca also expressed concern over predictions for the UK unemployment rate to increase from 5.1 percent to 6.5 percent this year.
In a more positive light, the 2021 Budget includes a number of measures to protect jobs and livelihoods. These include an extension of the Coronavirus Job Support Scheme to September 2021 across the UK, which will come as a welcome announcement to mobility businesses who have staff on furlough.
There will also be an extension of the UK-wide Self Employment Income Support scheme to September 2021, with 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time.
Rebecca said that whilst she welcomes these announcements, they should be removed in a phased manner once recovery is well underway across the UK.
Also announced in this year’s budget, there will be an extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000. A new “flexi-job” apprenticeship programme in England worth £7 million will enable apprentices to work with a number of employers in one sector. This should incentivise businesses to bring more apprentices into wok.
Commenting on this investment, Rebecca added: “While the announcement to incentivise businesses to bring investment forward from future years and to hire more apprentices is also welcome, I am concerned that not enough is being done to incentivise businesses more generally to increase their workforces.
“A temporary reduction in employer National Insurance Contribution’s would have provided such an incentive and today’s Budget is a missed an opportunity in this regard.”
She also noted that an increase in statutory sick pay would provide reassurance and support controlling further coronavirus outbreaks.
Rebecca added that it is unfortunate that the chancellor has taken until now to confirm his plans for non-domestic rates. A measure, she says, which has been crucial in protecting jobs and livelihoods.
As a result, in Wales, the Retail, Leisure and Hospitality Rates Relief scheme for properties up to a rateable value of £500k in Wales will be extended for one year. Welsh businesses in the leisure and hospitality sector with a rateable value of over £500k will also be granted 100 percent rates relief for 2021-22.
In conclusion, Rebecca closed: “The Chancellor did nothing today to ease my concerns in regards to his longer-term approach over this Parliament term to bring the economy back on a stable footing or to provide the necessary funding to support our public services to recover from the crisis.
“The UK Government must still do more to deliver a comprehensive package of active labour market measures including more ambitious investment in training and skills, to ensure tax measures are progressive supporting the most vulnerable in our society and to take advantage of low interest rates to be more ambitious on capital infrastructure spending to stimulate recovery.
“It will be by growing the economy that we will be best placed to bring the fiscal debt under control. I will continue to use the levers at my disposal to take this approach to deliver a more prosperous, greener and equal Wales.”https://thiis.co.uk/chancellor-did-not-present-longer-term-approach-to-bring-uk-economy-back-on-a-stable-footing/https://i1.wp.com/thiis.co.uk/wp-content/uploads/2021/03/rebecca-evans-am-630x420_0.jpg?fit=700%2C467&ssl=1https://i1.wp.com/thiis.co.uk/wp-content/uploads/2021/03/rebecca-evans-am-630x420_0.jpg?resize=150%2C150&ssl=1Government & Local AuthoritiesInvestments & FundingNewsroomSector News2021 Budget,Budget 2021,Coronavirus Job Retention Scheme,furlough,Office for Budget Responsibility,Rebecca Evans MS,Rishi Sunak,UK economy,UK Government,Welsh GovernmentFollowing yesterday’s 2021 Budget announcement, presented by Chancellor Rishi Sunak to Parliament, Rebecca Evans MS, Minister for Finance and Trefnydd at the Welsh Government, has expressed concerns over unemployment rates and the UK Government’s longer-term economy ambitions. The chancellor says that the budget presents a three-part plan to protect jobs...Sarah SarsbySarah Sarsbysarah@thiis.co.ukAdministratorTHIIS Magazine