The Budget always comes with a tranche of exciting opportunities, packages of support for those that need it most and investment to promote future growth. This year, with the pandemic as the backdrop, it was no different and it reiterated the UK Government’s support for individuals, families, and businesses throughout the UK.
Currently, UK debt stands at over £2 trillion equating to around £30,000 per person. As such, this Budget and the proceeding months were always going to be hard for many. Therefore, I am delighted that this Budget has the nation’s economic and social recovery from the pandemic at its heart.
However, with this support in place, the measures in the Budget will also ensure that as the economy reopens individuals and businesses will be able to thrive once more and return to self-sufficiency. In doing so, it will also support the UK's future prosperity.
I also welcome that this is very much a Budget that looks forward; it looks out of the pandemic and into the future. With the ethos of building back better and greener at its heart, I am delighted that there are measures to support local areas and their future development, the regions of the UK that need it most and sectors that look set to grow in the coming years.
Here is a selection of the announcements:
Investment and support for North Wales
As a result of the Budget announcements, Welsh businesses are now set to receive more than £93 million of investment for the green recovery in Wales. This will also result in the accelerated creation of 13,000 new jobs.
For Wrexham and North Wales, the North Wales Growth Deal will get an extra £4.4 million per year from 2021/22 for the remaining nine years of the Deal, helping the Deal to create up to 3,800 new jobs and to support an uplift of £2.2 billion for the economy. This will drive forward local economic priorities and support regeneration while delivering new jobs in sectors such as infrastructure and transport. These are both areas that need additional funding in Wrexham and North Wales, so I am pleased to see this accounted for.
These are some excellent announcements and, along with other funding announcements made this year such as the extension of the ‘Levelling-Up Fund’, they show the UK Government's commitment to Wales. It is significant that this funding will be focussed on local projects, showing that the UK Government is leading the way in Wales on delivering for local communities. This will rebalance devolution, righting twenty years of increased separation between Wales and the rest of the UK – something I know that many in Wrexham are concerned about.
Continuation of the Furlough Scheme and the Self-Employed Income Support Scheme
The Furlough Scheme, along with the wider package of measures implemented by the UK Government, has been a lifeline for many businesses in Wrexham and the UK. In Wrexham, over 15,000 jobs have been supported by the scheme and it did an excellent job of sheltering many people from the worst impacts of the pandemic.
I am proud of this scheme – one of the most comprehensive of any across the globe – and as such, I am supportive of the continuation which will protect jobs and livelihoods whilst the UK is still in a period of economic and social restrictions. By April, when the scheme was due to end, it will not be feasible for economic and job activity to return to pre-pandemic levels. Therefore, it is welcome that the Treasury will prevent a ‘cliff-edge’ for jobs by continuing the scheme. Importantly, this move is also supported by business leaders and groups; the CBI, a business lobby group, said the extension would “give businesses the chance to catch their breath as we carefully exit lockdown”.
As well as this, the scheme for self-employed individuals will also be continued. This will include an extension of the scope of the scheme to capture an extra 600,000 people; for the first time during the pandemic, the recently self employed (those who have only completed tax returns for the year 2019/20) will also qualify.
Business investment and development, and supporting skills in the workforce
With the success of the vaccine programme, the Chancellor also that he wanted the UK to witness a scientific and technological revolution, which would make the UK a “scientific super-power”. Given my earlier question to the Prime Minister at Prime Minister’s Questions, during which I asked the him to back me in promoting jobs in STEM and health care sectors in Wrexham, I am certainly supportive of this endeavour and the Chancellor’s comments.
I believe that Wrexham’s existing infrastructure, such as the Wrexham Maelor, Glyndwr University and the Industrial Estate, coupled with the town’s role in the vaccine rollout, should inspire young people in the town to take up further study and careers in the STEM and health care sectors. Therefore, I am encouraged to hear that this Budget will promote growth in these sectors, whilst also providing opportunities for young people to train and gain the skills required for future employment.
As the Chancellor announced, this will be supported by a range of measures such as a so-called tax ‘Super Deduction’ which, over the next two years, will allow businesses to offset all the cost of any investment they make against their tax liability, plus an additional 30%. This make the UK’s business investment regime world leading; it will therefore pay for companies to invest. Furthermore, the ‘Help to Grow’ Scheme will also encourage businesses to become more innovative, competitive, and profitable through the introduction of MBA Style management training for employees (supported by business schools across the UK). The Government will contribute up to 90% of the cost of this training.
Support for veterans
Along with support for other marginalised and sometimes unheard groups, the Chancellor has also announced £10 million for specifically for veterans with mental health needs. In a recent Defence Select Committee inquiry, I heard about some of the mental health struggles our veterans face and as such I think this is an excellent step.
Freezing Alcohol Duties and support for pubs and brewers
Significantly, the Chancellor announced that all planned increases in alcoholic duties will be cancelled, freezing these duties for another year. As a former small brewery owner, I know how important brewing is to Wrexham. I welcome the announcements on Beer Duty, which show the Government's continued commitment to the sector and to ensuring pubs and brewers can bounce back from the pandemic. The specific measures on Beer Duty will be of great assistance to Wrexham's pub and the brewery sector, who I know have been campaigning hard for this.
Throughout the pandemic, many constituents have raised their concerns about the pubs and brewery sector via email, social media, and in-person. Through this correspondence and my work in Parliament with the APPG for Beer, I know that the sector has had a tough time, with many worried about how pubs and breweries will emerge out of the pandemic. Given this, I have been more than happy to raise these concerns in Parliament, escalating these worries directly with the team at the Treasury during meetings, at Treasury Questions in the Commons, and with other colleagues across Parliament. As such, these commitments are very welcome.
Importantly, they will also complement a range of other measures that I know will be appreciated too, such as the continued reduction in VAT to 5% for hospitality will be extended for six months to the 30th September of this year. After that, there will be an interim rate for 12.5% until April of next year. These support measures are something I have lobbied for.
Furthermore, the Community Ownership Fund, announced today, will provide £150 million to help communities across then whole of the UK buy local assets such as pubs, sports clubs, and theatres. I know that pubs are the heart and soul of many communities across the country, but often, when they are forced to close, the communities they served regularly seek to reopen them but find themselves lacking funding. The grants of up to £250,000 that this fund will provide will therefore be of great help to communities across the country, giving residents the opportunity to shape their area and protect the community assets that they treasure most.
Fuel Duty frozen
Fuel Duty will be frozen for a record tenth year, which will freeze the levy at 57.95p. This will result in more money in people's pockets and is a victory for drivers up and down the country. The Prime Minister was recently quoted as saying, "I firmly believe that the economic recovery is going to be powered by the white van man amongst others" and this announcement is certainly testament to this Government's support workers.
Increased flexibility on mortgages
It was announced that the Treasury will underwrite 95% mortgages on properties with a value up to £600,000. This is not restricted to first-time buyers or new-build homes and will therefore provide buyers with increased opportunity and flexibility.
Since 2010, the Conservatives have put in place many schemes to help buyers get onto the property ladder, but I know that many individuals and families still feel shut out of the housing market. As such, I am pleased to see the return of these high loan-to-value mortgages, which will help many individuals and families get onto the property ladder to make a house their home, turning what has become the so-called ‘Generation Rent’ into the ‘Generation Buy’.
Office for Budget Responsibility (OBR) upgrading of forecasts
The OBR has now upgraded the economic forecasts for the coming year, forecasting a “swifter and more sustained recovery” from the COVID-19 pandemic than had been expected. Buoyed by the excellent vaccine rollout, it is predicted that the bounce-back will see the fastest growth rates in fifty years with output back to 2019 levels by the middle of 2022, six-months earlier than previously though. At the beginning of this week, speculation on this announcement resulted in a rallying of the markets, further suggesting optimism for the future of the UK economy.
These forecasts are also a testament to the work this Government has done to ensure the economy is well supported through the pandemic.
Overall, I therefore believe this to be a transparent, honest and realistic set of proposals. The proposals recognise that we are not out of the pandemic yet, and that support is still required for those that most need it, but the announcements also look forward to a more positive post-pandemic future. This will give a boost to those areas that need it and hope to individuals, families and businesses that have had a truly torrid year.
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