Today’s Budget had a twin focus: expanding elements of the various support packages designed to see people and employers through the coming months as the Government’s roadmap to ease restrictions takes its course, and introducing new measures to boost the longer-term recovery of the UK economy and reduce Government borrowing in the years to come.

Ultimately, despite the fact that many of the measures contained in the Chancellor’s speech are to be welcomed – including the extension of the furlough scheme and the uplift in Universal Credit payments –much more is likely to be required to tackle the insecurity that millions of people across the country could face as we rebuild post pandemic.

Extending and expanding immediate support measures

The Chancellor’s Budget announcements today began with a review of the Office for Budget Responsibility’s estimate that 1.8 million fewer people are out of work due to government support like the CJRS and SEISS. The Government have extended the both the CJRS and SEISS until September this year, including a welcome broadening of the SEISS grant to finally include those newly self-employed in 2019/2020 who were left in the cold by the previous three SEISS grants. We have highlighted the large number of self-employed workers excluded from the scheme, so HMRC’s estimate that more than 600,000 additional self-employed workers could qualify is very welcome. Despite this, there are still self-employed workers who aren’t eligible for the SEISS scheme, and the UK needs a stable safety net to catch these people.

The extension of the Universal Income £20 weekly uplift for a further 6 months is a small step towards this, as this uplift forms a vital lifeline for many people. However, there is a real risk of a substantial number of redundancies when furlough ends in September, at the same time the uplift is due to end. The Government needs to engage in a larger project of repairing the weaknesses in the current welfare system to better support unemployed people into good jobs. This could include ending welfare conditionality that prevents job seekers from undergoing intensive training, as highlighted in our Learning to Level up report. Given the lessons that have emerged from our experience of the pandemic, and the challenging road to recovery that lies ahead, it is highly likely that a more fundamental re-thinking of our welfare system will be required in the near to mid-term.

Additional measures that will help to support workers on the sharp end of the recession include the increase of the National Living Wage to £8.91 per hour. The increase in employer grants for new apprentices to £3,000 is a welcome move, and could help to bolster engagement which has lagged since the levy was introduced. However, no announcements around the Lifetime Skills Guarantee were made, despite our research showing that approximately 1.4 million people who might benefit from retraining would be excluded under its current terms.

Introducing measures to drive longer term recovery

Moves to ensure that those sectors most badly affected by the pandemic are supported over the longer term are also welcome. This includes Restart Grants of up to £6,000 for non-essential retail, a sector that has our analysis has found struggled during the pandemic, as well as £18,000 for hospitality and leisure businesses facing difficult paths to reopening fully.

In terms of encouraging increased private sector investment, a programme of newly proposed ‘super-deductions’ was announced, which are would aim to encourage businesses to invest new plants and machinery through sizable tax cuts. However, it should be noted here that increased capital investment may not lead companies to deliver an equivalent expansion or development of their workforce, so the impact on workers could be more limited.

Alongside these measures, there were also announcements regarding a new Infrastructure Bank to support growth in ‘green’ and ‘sustainable’ sectors, the re-location of elements of the Treasury to Darlington, ten new Town Deals to support local growth and eight new Freeports to encourage enterprise and trade.

And yet despite the ambitious rhetoric of the Chancellor’s address, it remains to be seen whether, when taken together, these relatively piecemeal measures will make even small progress towards the Chancellor’s stated aim of “shifting the economic geography” of the country. Despite the pandemic having shone a light on some of most significant structural inequalities and challenges across the labour market and wider economy, there was relatively little announced regarding new measures to improve access to higher quality, more secure and better paid employment, or to empower places to truly transform their local economies.

And alongside the Chancellor’s pledges to reduce borrowing and stabilise the national debt as a proportion of GDP over the years to come through a mix of growth incentives, cuts to public expenditure and targeted tax rises, many will be concerned there wasn’t more in the way of fundamental reforms to help create jobs, tackle insecurity and re-imagine the role that the state could play in supporting people as our economy transitions to a low carbon, digital future over the decade to come.

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