Our comment: UK Budget 2018
The Chancellor of the Exchequer last week (29 October) revealed his new budget. Chancellor Philip Hammond described this budget as being the end of austerity (a claim which has been debated among critics and the Office for Budget Responsibility (OBR)).
This budget contains various financial packages for different schemes as well as changes in taxation in different areas. The Chancellor has committed to “Fuel the Midlands Engine” and a number of his proposals will indeed have large impacts on the region. Mayor of the West Midlands Andy Street has described this budget as a “£100m vote of confidence” in the region. The OBR forecasts 800,000 additional jobs will be created nationally by 2022 which is welcome news for the region as a reduction in unemployment will likely see an economic boost for the region. Significant investment in infrastructure for the region has also been announced, tying in with the recent announcement that the West Midlands would become the first Future Mobility Area in the country.
UK Government departments are also to receive an additional £0.5bn of funding to prepare for Brexit, where it is as yet unclear how it will impact businesses in the West Midlands.
Short Haul rates of Air Passenger Duty are not set to rise, which could arguably have been increased to incentivise people to look to more sustainable methods of domestic travel, such as rail. A major UK train operator estimates that an individual return journey from Birmingham to Edinburgh could save 270kg of CO2, when travelling by rail instead of air.
£30bn will be invested in highways, strengthening England’s main arteries and improving congestion. Whilst this will be welcomed by many car users, it is mainly about improving road conditions and journey times, rather than reducing emissions. In comparison to previous budgets, there was a lack of acknowledgement of Electric Vehicles (EVs), something the UK Government has recently announced funding for in terms of innovation. The Spring Statement may yet bring news on improved infrastructure in order to make EVs a more viable alternative to conventional cars.
In addition, small retail businesses are likely to welcome investments in transport links for high streets, in order to rejuvenate and promote them, alongside a temporary cut in business rates.
Social and natural capital
£60m is budgeted for the planting of new trees in England, a clear move to combat deforestation and preserve natural capital. This will benefit air quality in the future but this also requires large scale change in actual emissions, especially as tree saplings will take many years before growing to fully-mature trees.
A £20bn increase in NHS spending has been announced, including a £2bn increase in annual expenditure on mental health treatment, an area which could really benefit from such funding. For the West Midlands, such an increase in funding would hopefully make our region healthier and more prosperous, helping to reduce our stubborn health inequality gap, as outlined in our latest Roadmap monitoring report also published last week.
One key area this budget was arguably lacking in was any reference to the recent IPCC report and a subsequent lack of reference to climate change. The biggest reference to environmental issues was arguably a new tax on plastic packaging that does not contain 30% recyclable material. Whilst this is welcomed, it doesn’t address the issue of single-use plastics and their detrimental environmental impact. The Chancellor clarified that a tax on disposable coffee cups will only be implemented if the industry does not make enough progress on reducing their consumption. The industry is undoubtedly making steps to reduce their consumption but more progress needs to be made.
Our annual conference on 3 December will allow attendees to hear from the West Midlands Combined Authority on the Local Industrial Strategy (LIS) and how the region is set to be part of the Government’s ambition to increase productivity nationally. This fits with the government’s ambition to locally strengthen economies and productivity. Our conference will also include a keynote from Myles Allen, contributing author of the IPCC report to enable discussion on how the region can shape policy and practice in the global fight against climate change. Are the two compatible? It will provide an opportunity for you to make up your own mind on whether this budget could be classed as ‘sustainable’ or not.
For the Treasury summary of the key points of the budget, click here.
For the BBC summary of the Budget 2018, click here.
Leo Morton, Volunteer Communications Officer, SWM