On Thursday 16th March, WA Communications hosted Jim Pickard, Deputy Political Editor of the Financial Times, and Kitty Ussher, Chief Economist at the Institute of Directors and former Treasury Minister, to discuss what the Budget means for businesses and the big unanswered political questions following Chancellor Jeremy Hunt’s statement.
Chaired by WA’s Head of Public Affairs Marc Woolfson, the panel discussed the revised economic forecasts, Hunt’s focus on supply side policy, the upcoming challenges for the government, and policy areas that did not attract significant attention in the Budget.
Our panel outlined five key takeaways during the session:
- The single biggest piece of good news in the Budget for business is the improved economic forecasts, which will provide greater confidence over the coming year and the government will have more money to fund its priorities. This meant the Budget was far easier for Hunt, with fewer difficult decisions to make, helping the government present a more optimistic picture and focus on delivering its central ambition of more economic growth.
- The government has bet on supply side policy to deliver on its priorities and spur medium term economic growth, but it still might not be far enough. The focus on high growth sectors, getting people back into work and time limited investment support may not be a silver bullet to the UK’s wider productivity problem across the wider economy. Furthermore, Hunt has now used up a lot of the fiscal headroom meaning if the gamble doesn’t pay off or a new crisis emerges, the government could be in fiscal trouble.
- The long-term implications of the Budget may not be down to the individual policies announced, but the continued impact of ‘fiscal drag’ on households. it may be a big money maker for the Treasury, but it has also contributed to the highest tax burden in decades. With the cost of living continuing to bite, and the importance of standards of living in determining elections, expect debates on tax cuts to continue in the coming year.
- The government’s Net Zero agenda was notably absent from Hunt’s Budget, and a significant gulf between rhetoric on new technologies like CCUS and the plan for delivery. Whilst Energy Secretary Grant Shapps has a ‘Green Day’ scheduled later this month to set out further action on the UK’s energy security and decarbonisation ambitions, there is scepticism this will be a big or defining moment and risk that government is becoming complacent in the face of big pushes to attract global sustainable investment from the US and EU.
- Rishi Sunak and Jeremy Hunt are happy to constrain Labour by stealing their policies. The continued windfall tax and childcare reforms mean Labour may find it difficult to disagree with the substance of the Budget. Keir Starmer and Rachel Reeves may need to refocus their attacks and priorities in the face of the Budget, with training and Net Zero early contenders for more attention.
To learn more about what the Budget means for you and other takeaways from the Chancellor’s Statement, get in touch with WA’s team to see how we can work together.
WA regularly host high-profile political figures and leading journalists to explore the intersection between politics, the media, and business – our recent event speakers include Rachel Reeves, Shadow Chancellor of the Exchequer; Chris Giles, FT Economics Editor; and Katy Balls, Political Editor at The Spectator.