Thu, 28 October 2021

Newsletter sign-up

Subscribe now
The House Live All
Health
This year’s political cringe event is here - the gambling industry’s Safer Gambling Week Partner content
By Gambling With Lives
Health
Economy
By Lord Bassam and Baroness Valentine
Economy
Economy
Press releases

Brexit, Welfare And Social Care: Everything Missing From Rishi Sunak's Budget Plans

Brexit, Welfare And Social Care: Everything Missing From Rishi Sunak's Budget Plans
5 min read

Chancellor Rishi Sunak's Budget included some major announcements, but there were also some conspicuous absences too. PoliticsHome points out the gaps.

Brexit

One the most surprising omissions from the Chancellor's Budget statement was Brexit, which was not referenced by name a single time in either his Commons speech or the full Budget report published by the Treasury.

Its stark exclusion was amplified by the OBR's forecast which revealed that customs requirements on UK exports had had a greater impact on the UK's economy than expected, with the group saying exiting the EU slashed 0.5% of the UK's GDP in the first quarter of the year.

"This reflects both that exports appear to have been hit harder than imports, and that the trade disruption will affect UK supply chains," the group concluded.

But the Chancellor did announce the creation of eight new 'freeports' in England which would not have been allowed under EU rules.

The controversial special economic zones allow goods to arrive from abroad without having to pay tariffs unless the goods are moved into other parts of the UK.

Companies working inside the zone also get some some tax breaks for a set period after setting up, with Sunak saying they would have "different rules to make it easier and cheaper to do business".

Supporters of the scheme say it will help boost manufacturing and investment opportunities and create new jobs. But critics of the plans, including some trade unions, say the plan instead would simply encourage firms to relocate their operations and jobs rather that creating new ones.

Welfare Spending

Sunak's announcement that the £20 Universal Credit uplift would be retained for a further six months, was a major, if not unexpected, measure confirmed in the Budget.

But with growing job losses and record numbers of people applying for benefits and financial support, there was little detail on what further measures are being considered to support people beyond the new September deadline.

Despite more optimistic unemployment estimates from the OBR, now expected to peak at 6.5% compared to their previous estimate of 11.9%, the government could have been expected to provide a more comprehensive plan for how they will support people who have lost their jobs or had their savings wiped out.

Questioning the Chancellor in the Commons, Meg Hillier, Labour chair of the Public Accounts Committee asked what would "suddenly change" in September to justify ending the £20 uplift as she called for futher support for those with "no prospect for work" in the wake of the pandemic.

Meanwhile, the Institute for Public Policy Research (IPPR) think-tank, added: "We welcome the extensions of job and business support schemes which we have been calling for, and which serve as planks to prevent economic hardship. But there was a striking lack of new support for public services, little public investment and no lasting boost to welfare for those hit hardest by the crisis."

Aviation Industry

With international travel all but banned under the lockdown rules, the aviation industry is under a major strain. But there was little good news for the sector in today's announcement.

Sunak failed to mention the sector directly in his statement, and the Budget report confirmed that air passenger duty, something which the industry had been calling for action on, would continue to rise as planned in the coming years.

The boss of Heathrow Airport, John Holland-Kaye said: "The Chancellor talks about protecting jobs and livelihoods, fixing the public finances and laying the foundations for the future economy, and yet he continues to ignore the UK's aviation sector.

"He clearly doesn't understand that all three depend on strong aviation sector delivering the trade, tourism and investment that power vast parts of the British economy.

"Failing to even mention aviation, let alone provide full business rates relief for airports in today's Budget, is a missed opportunity to ensure the sector can play a key role in the country's economic recovery."

NHS And Social Care

After enduring one of the largest challenges in its history, there was some surprise that Sunak failed to make any significant announcements about the NHS or social care.

While the NHS has received multi-billion pound funding boosts over the period of the pandemic, Labour have claimed that the Chancellor's spending plans actually translate to a planned drop in resource spending of £30.1 billion in 2021/22.

Responding to the statement, shadow health secretary Jonathan Ashworth accused Sunak of having "buried" the details.

"Rishi Sunak promised to be 'open and honest' with the British public. But buried in the small print of his Budget is a cut to frontline NHS services that will increase pressure on staff and do nothing for patients stuck on growing waiting lists," he said.

"This Budget papered over the cracks rather than rebuilding the foundations of our country."

Meanwhile, there was an immediate response from health unions flagging their disappointment that there was no mention of a pay rise for NHS staff and raising concerns it would lead to people leaving their jobs.

Hannah Reed, national officer of the Royal College of Nursing, said staff needed to hear a "clear commitment from the chancellor that he's willing to act on their call for a significant rise".

She added: "His failure to listen leaves even more contemplating their futures and only adds to the nurse staffing crisis. These delays send the worst possible message to staff who are still giving their all."

And once again, the thorny issue of social care was largely ignored, even after a year which many industry groups have claimed has pushed the sector to breaking point.

Gavin Edwards, senior national officer for social care at the Unison union, said the lack of a detailed plan for addressing social care was "shameful".

"The sector is in a desperate state and ducking decisions on reform will only make the situation worse," he said.

"The pandemic has made many finally realise this service is decaying. Thousands of jobs need filing, staff feel dejected and wages are shockingly low.

"The Chancellor must put his hand in his pocket and fund a major overhaul of the entire care system."

PoliticsHome Newsletters

PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe

Categories

Health Brexit Economy
Podcast
Engineering a Better World

Can technology deliver a better society? In a new podcast series from the heart of Westminster, The House magazine and the IET discuss with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

New episode - Listen now