Budget 2021 – reflections from Story MD Amanda Lowe
Last week, the Chancellor unveiled a Budget aimed squarely at ‘protecting jobs and livelihoods’. As a staunch believer that our economic recovery must be regionally led, I’m quietly optimistic.
Here’s four reasons why:
Levelling Up steps up
As the Chancellor took to his feet I was listening out for more on the recently announced Levelling Up Fund and detail on the support and stimulus we in the Midlands and other regions, might get both for short term recovery and the long term rebuilding of value in our local economies.
‘Levelling up’ – the term given to policies designed to put the regions on an economic, social and development par with the capital and South East – were key to the government’s 2019 election campaign.
Now a year on, just 15% of Midlands leaders surveyed in our Midlands: Graft & Grow survey are satisfied with work done so far and half (50%) say they would like more investment in vital infrastructure.
The Chancellor announced some significant measures, and while the detail is yet to emerge for many, the headlines are heartening for the regions:
- Eight new freeports – In the Midlands, the East Midlands Airport Freeport, delivered by a consortium bid led by the D2N2 and Leicester and Leicestershire Enterprise Partnerships is expected to create 60,000 jobs in the region
- £1bn Towns fund – designed to promote regeneration in 45 English towns including Wolverhampton, Rowley Regis, Smethwick and West Bromwich
- £150m for community groups – to take over pubs at risk of closure
- New UK Infrastructure Bank to be set up in Leeds
- A new Treasury campus – in Darlington
Support now, to pay up later
Continuing furlough, extending support for the self employed and more incentives for apprenticeships were a no-brainer. With thousands of jobs depending on these schemes, pulling the plug was never an option. We’ve not come this far, to only come this far.
The Chancellor will need businesses to start making a dent in the huge borrowing figures in the months and years to come. To do that, he needs us to grow and create jobs so he can tax us more later – otherwise that debt is going nowhere.
Jobs are the biggest lever the Chancellor has in economic recovery and long term balancing of the books. Support now, pay later.
A step in for young talent
The unemployment that has resulted from the pandemic has disproportionately affected young people. This has a huge impact in Birmingham, given its overwhelmingly young demographic. In the Greater Birmingham area alone the youth unemployment claimant rate nearly doubled from 4.7% in March 2020 to 8.9% in November 2020.
Extending and doubling the apprenticeship hiring incentive, ‘flexi-job’ apprenticeships and 40,000 more traineeships alongside the Kickstarter Scheme, mean our region’s young people have a better chance. A chance to learn, gain skills and secure a job in an economy that has not invested in them much over the last 12 months – but that is going to need them more than ever in the months and years to come.
The Chancellor’s measures are one step in the right direction.
A boost for growth
As they continue to steer a course through the toughest economic climate in a generation, around a third (36%) of Midlands business leaders would like more advice on business support services and another third are looking for increased access to finance to support recovery.
We heard the Chancellor announce a new ‘Superdeduction’, allowing firms to reduce their tax bills by investing in their growth, business rate support and Restart grants for those reopening as lockdown eases.
Our research found that two-thirds of Midlands leaders are confident of growth this year, but finance and talent are key concerns. While there are many more devices to boost regional productivity available to the Chancellor, this package will give many Midlands businesses a much needed boost.
The devil will be in the detail as always. Let’s see what more comes.
Amanda Lowe @amandalowe_bham