Nearly two weeks on from the Spring Budget announcement, we’re looking back on the policy changes, responses, and how they will affect you.
Support for energy bills
“The Chancellor has announced that the energy price guarantee will remain unchanged at £2,500 until June 2023. In the meantime, the household winter discount of £400 on energy bills will run out on 1st April 2023. This means that energy bills will rise between April and June 2023 to accommodate for the previous winter discount of £66/£67 per month received between October 2022 and March 2023. Customers who prepay for their energy pay more than households paying through direct debit. From 1 July, the penalty on prepayment will end, saving around £45 a year for four million households.”
– Dr Annum Rafique, City REDI
Getting over 50s back into work
“The Budget set out several measures that will try to encourage more of the over 50s into employment. The increase in the Lifetime Annual Allowance is a positive step in incentivising some highly skilled workers to remain in the labour market. This is welcome particularly in sectors with skills shortages, including in the NHS. The announcement of a new ‘Returnerships’ apprenticeship targeted at the over 50s can be interpreted as some recognition that this age group often feels that existing skills programmes are not so well geared to their needs as they could be. Similarly, increasing the number of 50+ Universal Credit claimants who receive mid-life MOTs to 40,000 a year to provide guidance before retirement is intended to stem early exit from the labour market. However, it needs to be recognised that the demand side of the labour market matters too and what many over 50s are seeking is flexibility in their working lives.”
– Professor Anne Green, The Department of Strategy and International Business
Regional growth in the West Midlands
“Government investments into industry clusters where we already have excellent universities, and a strong science and technology base, are welcome. The first challenge is to leverage these funds to attract private sector investment and stimulate stronger economic growth across the region. The second challenge is to make sure that this growth is inclusive by enabling smaller local firms to benefit.”
– Professor Simon Collinson, The Department of Strategy and International Business
Read New investment zone in the West Midlands welcomed, but not without challenges on the Birmingham Brief
“The evidence suggests that it tends to shift activity from one place to another. Where they can work is when you have a much more kind of holistic approach to putting that alongside infrastructure locally, skills, innovation support. Having it close to a university might be a better way to go, nevertheless I remain sceptical as to whether there could be long term benefits from it.”
– Professor David Bailey, Department of Management
Read ‘Canary Wharf’ plan for Birmingham region as millions promised but there are serious problems on the Birmingham Mail for full comments
Sustainable growth and economic transformation
“Central to this Budget is a concern with transforming the wider framework conditions that support economic activity with a focus on trying to accelerate growth. This is meant to be a Budget for Growth, but what type of growth? Is this going to be sustainable growth, green growth, inclusive growth or even some form of responsible growth? There are many different types of growth. It is unclear what type of economic growth this budget is trying to facilitate, and perhaps the focus is on any type of growth being better than economic decline or stagnation.”
– Professor John Bryson, Department of Strategy and International Business
Read Hunting for Snarks or Boojums? Economic Growth and the March 2023 UK Budget on the Business School Blog
“As the OBR has pointed out we will narrowly avoid entering a technical recession this year, but the economy will still shrink (-0.2% GDP), however, we are not totally out of the woods yet. High-interest rates, gas prices remaining double what they were before the pandemic, stagnation of business investment since 2016, rising labour market inactivity and lowering productivity since the financial crisis, are all going to weigh down on growth.”
– Alice Pugh and Hannes Read, City REDI
Read Key Announcements From the Spring Statement 2023 on the City REDI blog
Childcare costs and support
“The government’s announcement of increased childcare support and £289 million funding for wraparound childcare provision in schools means that working parents in England will be able to access 30 hours of free childcare per week, for 38 weeks of the year, from when their child is 9 months old to when they start school. The UK stands out internationally in terms of high cost of childcare, and inequalities in childcare use. The extra provision will undoubtedly help parents who are currently struggling with childcare costs. However, it must be recognised that the support will only come into operation in stages. It will not be until September 2025 that every working parent of under-fives will have access to 30 hours free childcare per week. Our research points to the need for support to be expanded for parents working anti-social hours or on zero-hour contracts. Further, questions exist regarding where the extra supply of childcare workers will come from and whether provision will be available in the right places for the most disadvantaged parents to take advantage of.”
– Dr Abigail Taylor, City REDI
“It is important to remember that children deserve high quality early years education alongside their care. The recruitment and retention of a qualified workforce is needed to ensure the additional hours benefit children and their families.”
– Professor Celia Greenway, School of Education
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the University of Birmingham.