Our comment on the Spring Budget 2023
Measures to grow the workforce
We hear from businesses every day of their significant staffing challenges. So there were welcome measures in today’s Budget.
It’s great to see the measures to help more people with disabilities and long term health conditions stay in or get into the workplace, for example separating capability assessments from benefits entitlement, introducing additional funding to 50,000 people into employment and providing additional support with occupational health services and mental health and musculoskeletal support.
It was also encouraging to see more support to help care leavers into employment.
Increasing the hours people on UC work before benefits are affected, and applying JCP sanctions more rigorously are also positive moves.
It will be interesting to see the detail being the new Returnship “apprenticeships” for over 50s looking to return to the workforce, working alongside Bootcamps and Sector Based Work Academies. It’s particularly welcome that these will be flexible to take into account prior experience and qualifications. We’re also looking forward to hearing more about the expansion of the Mid Life MOT scheme, as well as other measures above, when we meet with DWP on Friday.
Abolition of the life time allowance on pension contributions won’t impact most people – but it will have a very significant and much needed impact on keeping doctors at work and in our NHS.
The measures announced around childcare should, over time, have a significant positive impact on drawing more parents into the workforce or enabling them to increase their hours. These measures include financial incentives to encourage more people to become childminders, increasing funding to nurseries offering free childcare by an average of 30%, enabling flexibility in child to carer ratios, 30 hours free childcare for every child from 9 months old until they start school and, for those on Universal Credit, enabling payments up front and increasing the level of those payments. There’s also provision of funding which aims to ensure that by 2026 all schools will be able to offer 8m-6pm wrap around care, either alone or with others.
While there clearly is a need to give time for the childcare sector to grow to support this (with it’s own challenges in finding staff!), given the acute staff shortages businesses are facing, it’s disappointing that some of these measures will take so long to come to fruition – with the 30 hours free childcare for younger children being introduced on a phased basis and not fully operational until September 2025 and full implementation of wrap around care not expected until September 2026.
However it was disappointing that measures did not go further and enable businesses, especially in the visitor economy and the land-based sector, to access staff from abroad more easily.
Investment and Innovation
It was disappointing that the planned increases in corporation tax will still be going ahead but the announcements around investment are welcome, with the small business investment allowance increased to £1m and full expensing allowing businesses to claim in full against purchases of IT, equipment, plant and machinery for at least the next 3 years.
It was also disappointing not to hear Cumbria’s name in the list of those areas able to apply for a new Investment Zone or mentioned in other regeneration projects. Support announced for innovation, for example, around ground breaking AI, was also welcome although in practice it’s effect on Cumbria will be as innovations come through in the longer term.
Nuclear energy
The announcements on nuclear are clearly important to us here in Cumbria, with investment in nuclear on top of that already announced for Sizewell C and the intention of 25% of electricity from nuclear by 2050 positive for the nuclear supply chain. As is announcement of the first competition for SMRs.
Fuel Duty
Maintenance of the 5p cut and freezing of fuel duty to next April is particularly welcome in a county such as Cumbria, but it’s always disappointing not to see more.
© Cumbria Chamber of Commerce