UK Government provides a cautious budget - what else is needed?

Our CEO, James Berry provides his thoughts on the latest financial statement. 

The UK Chancellor of the Exchequer, Rishi Sunak, outlined his latest financial statement, already the 5th major update to the government’s financial plans since the start of the year. Bristol Credit Union, CEO, James Berry provides his thoughts. 

“In normal times, this would probably be seen as a giveaway budget, with an unusual (for the last couple of governments) focus on investment rather than cuts.

However, these are not normal times, and it’s pretty obvious that whilst welcome, these measures are likely only to be the beginning of what it’s going to take to get the economy going again.
For example, the £1,000 payment for retaining furloughed workers just puts off redundancies a bit longer. There’s also a big question about whether it’s even attractive enough for businesses who wouldn’t be keeping people on anyway to retain jobs. In addition, the very short term nature of many of the measures, including the so-called ‘meal deal’ and the job support for young people scheme means that further assistance is likely to be needed later in the year if the economy develops as gloomily as expected.

Looking at the home insulation and stamp duty cut, both are good news tickets for homeowners, but miss a large number of those most likely to be affected by Covid-19 which is those who rent. Furthermore, in the context of the scale of change needed to decarbonise our economy it really is a drop in the ocean, and we would look to see much more in this area in the Budget. 

The VAT cut for hospitality sector helps put money back in business’ pockets, but should be matched with a commitment from those businesses to maintain employment.
One big missing piece was a commitment to making sure the safety net of Universal Credit or other benefits is much more generous for at least the first 6 months of a claim, including full support with rent for those renting, so that families who experience redundancy over the next few months aren’t left high and dry, and potentially homeless too, without time to adjust to changed circumstances or get a new job.”

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Posted on
10 July 2020