What’s the Bother with Budget?
By Jessica Riley on Thursday, 4 March 2021
With yesterday’s Budget announcement, International Women’s Day right around the corner and Covid restrictions starting to ease from next week – March is already proving to be a very busy news month. And, we are only four days in.
For the very first time the PR team experienced a virtual Budget. Normal procedure see’s the team in the office with a slice of pizza in hand, the Chancellor on the TV screen, and teams prepped and ready to get comments quickly turned around and out the door. Time is always of the essence on Budget Day. But this year presented a slightly different challenge.
With all of us working from home Teams was our saviour enabling us to share key points form the Chancellor’s statement and draft comments ready for our client’s review and issue.
While it was different for us, it was also different for journalists. Without colleagues gathered in the same room, accountants on hand to crunch the numbers, the technical insight and expert view of our clients was so very valuable.
And, there was a lot to discuss.
For the 4.7 million people who are currently furloughed, the new extension of the scheme until September received mixed reviews. For those in the hospitality, leisure, and retail industry, it’s a crucial safety net before any of these industries are able to reopen to the public throughout the rest of this year. For the economy, it’s a bit of a warning sign ahead of the future labour market challenges to come.
Similarly, the launch of the 95% mortgage guarantee, while a blessing to eager FTB’s and those struggling with affordability concerns does raise the risk of creating housing bubbles in the long-term. Will Generation Rent really become Generation Buy – we shall see!
What was fundamentally clear was the Government’s attempt to instil confidence in those who’ve suffered financially during the pandemic and to clear the road for economic recovery. And it will be a while before we can tell how successful that will be.
Indeed, Mr Sunak laid out his plan to recover the UK’s financial losses over the next few years. To do this, the Government announced it will be increasing the rate of corporation tax in the UK to 25% by 2023.
Another surprise policy was ‘The Super Deduction’. Mr Sunak said, “The Super Deduction” makes the UK’s tax regime for business investment “truly world-leading” and according to him it’ll be worth £25 billion during the two-years it is in place - the biggest business tax cut in modern British history. Quite a strapline!
Looking ahead, the Chancellor also announced the creation of the first ever UK Infrastructure Bank. According to the policy design papers, the Bank will work with the private sector and local government, leading a shared mission to accelerate investment in the country’s infrastructure with environmental initiatives at its heart.
As the Chancellor concluded his speech, remotely and simultaneously teams turned their attention to swiftly drafting and issuing reactive comments. Some were punchy, others were very technical using of the hidden points in the Budget papers (there’s always hidden detail lurking somewhere!). By 3pm we’d send out over 25 comments for clients and by the end of the day that number had increased, as we all dived into the detail of the statement and rushed to issue additional thoughts.
As the dust settled, we all breathed a collective sigh of relief – another Budget Day done, and one that certainly won’t be forgotten in a hurry!