Budget Days are strange affairs. There is a certain pomp associated with Budget Day. The nation used to listen intently to whether the price of beer, wines and spirits would increase, and what economic forces would be unleashed on a packet of fags. Perhaps not all that much has changed.
But beyond the economic jargon, beyond accountants watching like hawks the minutiae of marginal tax rates and ad-valorem duties, beyond Per Capita Real GDP and the Wholesale Price Index….beyond all that there is a tone and a philosophy and a message to the public. We get a sense of the competence of what is being presented (pasty tax anyone?), and we get a perspective on the manner of dealing with public priorities. And crucially, in Budgets that little word with a big punch is won or lost: trust.
The Chancellor, Rishi Sunak, has already scored numerous plus points during his tenure. Treasury officials praise his knowledge and skill, and stakeholders as wide-ranging and the Confederation of British Industry and the Trades Union Congress have been open about how impressed they are with him. It’s crucial that this confidence and trust is maintained in the March Budget. For all its flaws and omissions, the furlough scheme has not only been a life saver for millions of families in Britain. It has been a pioneer policy, emulated around the world. And the various loans, grants, mortgage holidays and tax deferrals have been a life-line for many.
This impressive platform must now be built upon. This trust must be solidified. The furlough scheme, for instance, left out a vast swathe of self-employed people. Artists, musicians, graphic designers, IT experts, project managers, builders – the self-employed today are far more than what we may have thought of in the past. The Chancellor should provide help for this group, using reasonable metrics such as previous tax returns and invoice history. Equally, the Chancellor might look at the plight of university students. During the pandemic university students have been doing all learning online, except some practical elements where relevant, often going back to the family home yet still paying their university accommodation rent. Quite apart from the awful student experience, the unfairness of handing over £9,500 a year and paying for a room that they don’t even live in seems to defy natural justice.
As offices space is likely to be relinquished by many companies, this is an opportunity to be more innovative with Special Economic Zones. Thinking beyond just free “ports”, incentives could be offered to, say, bio pharma firms or data science start-ups to move into newly vacated spaces that also benefit from proximity to existing business services and, in the case of London, the City. The tax intake that the Chancellor no doubt requires may take longer to materialise from this approach, but it will be enduring and reliable. And we’ll have fantastic new sectors that will provide high quality jobs – all thanks to longer term thinking and nurturing new industries.
The old adage about threats and opportunities being opposite sides of the same coin is no less true in the current circumstances. At this crucial time, after a searing pandemic and an exhausting set of lockdowns, the Chancellor must look beyond the short term and the obsession of immediate metrics. He should consider leveraging the trust and rapport he has engendered, and liberate a phoenix from the ashes.
Jeet Bains is a member of Bright Blue and a councillor in the London Borough of Croydon and was a parliamentary candidate in the 2019 general election. Views expressed in this article are those of the author, not necessarily those of Bright Blue. [Image: Number 10]
