IED responds to Spring Budget 2020
The Institute of Economic Development (IED) has responded to today’s Spring Budget. IED Executive Director Nigel Wilcock commented:
“This might be the budget that brings Keynes back in vogue with the Office for Budget Responsibility expecting the expansionary measures to create a demand-led economic boost. Certainly, from the budget speech there was little not to like – some emergency fiscal loosening, some provision for the lower paid, and lots and lots of spending announcements.
Clearly the Institute for Economic Development welcomes all the measures concerning rebalancing, some of the attention to green measures (although at the same time building roads and freezing fuel duty) and the tone of the entire delivery which continued the narrative of the importance of economic development and re-balancing.
So why the caution? Well, partly because we are an Institute for economists. But partly because it is easy to get wrapped up in the headlines of the shopping list but less easy ‘in real time’ to properly grasp the materiality of some of the numbers which sound large but may amount to little – and because there was virtually nothing on taxation. It seems likely (though not mentioned) that when more detail on allowances is published they will either raise more through fiscal drag (by remaining the same) or be widely tweaked to raise more funding.
One other important thought is what happens to local authorities – we remain clueless about long-term funding and once again there were many central government promises on business rates which is a tax that local government increasingly needs for its own funding. This remains a concern, fuelling a suspicion that local decision-making and spending powers are being eroded by this government despite a rhetoric to the contrary.
Finally, almost four years after the EU referendum the Shared Prosperity Fund seems no closer to delivery. The full text from the Budget Bill 2020 states: ‘In repatriating the EU structural funds, the government has an historic opportunity to design a UK Shared Prosperity Fund to match domestic priorities. The UK Shared Prosperity Fund will replace the overly bureaucratic EU structural funds, levelling up opportunity in each of the four nations of the country. Funding will be realigned to match domestic priorities, not the EU’s, with a focus on investing in people. At a minimum, it will match current levels of funding for each nation from EU structural funds. The government will set out further plans for the fund, including at the CSR’. There is a concern with this, and other announcements, that the Spring Budget may have been big on headlines (many of them welcome) but somewhat less clear on detail.”
Nigel Wilcock is available for interview via Phil Smith, Institute of Economic Development PR consultant, 01778 218180 / 07866 436159 / firstname.lastname@example.org.
Notes to editors:
The Institute of Economic Development (IED) is the UK’s leading independent professional body representing economic development and regeneration practitioners. Established over 30 years ago, the IED’s key objective is to represent the interests of economic development practitioners and ensure their views are widely expressed and noted. The IED is committed to demonstrating the value of economic development work for local and regional communities; the pursuit of best practice in economic development and the attainment of the highest standards of professional conduct and competence.