Budget Day is usually an opportunity for the Chancellor of the day to present their vision for the future accompanied with some giveaways which may (or may not) go down well with the public. This year’s, however, struck a more sombre tone, with the Chancellor levelling with the public that despite seeing light at the end of the COVID-19 tunnel, we are at a critical economic juncture and must meet the scale of the challenge together.
The Chancellor’s statement involved three broad sections. First, tackling the crisis and offering further economic support for individuals and businesses in the short-term. Second, begin fixing the public finances and levelling with people around some tough choices on taxation, choices of which there is no doubt he would have had ideological concerns about. Third, appealing to backbench MPs across the country and be as forward-thinking as possible about the future of our economy.
For the built environment, the focus was on levelling up. The Budget was accompanied by a Levelling Up Strategy and announcement of a new infrastructure bank that will provide funding for road upgrades, energy, utilities and housing – with a focus on projects that look to net zero.
Our 3 built environment headlines from Budget 2021 are:
1. Green growth is a popular strategy
With the hosting of COP26, the environment is a significant policy focus this year and there was plenty of environment-related content in this year’s Budget.
A key announcement was the launch of the UK’s first infrastructure bank located in Leeds to accelerate progress to Net Zero. The Chancellor also unveiled the world’s first government green bond and measures were outlined to bring down carbon emissions, including a more extensive electric vehicle-charging network and earmarked investment into cleantech.
Critics will say this goes nowhere near as far enough and point to the fact that fuel duty remains frozen, but the statement today indicates the growing importance of green growth as a popular post-pandemic strategy.
2. An ongoing and reinforced commitment to levelling up across the country
In his statement, the Chancellor pledged to use the full measure of our fiscal firepower to think about the future of our economy and UK-wide levelling up remains a core ambition of this Government.
In a win for red wall Tories, Mr Sunak confirmed that the Treasury’s new economic campus will be in Darlington, contrasting with the officials’ preferred options of Leeds and Newcastle.
He also announced the launch of two UK-wide new funds, a Levelling Up Fund worth £4 billion to invest in infrastructure, town centres and high streets and heritage and cultural assets, and a £220 million Community Renewal Fund, with 100 priority places already identified to receive assistance with their applications.
But the big announcement that came at the end was the naming of eight freeport locations across England, including East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames. And Teesside.
3. A boost for prospective home buyers
Facing a cliff-edge with the stamp duty holiday set to expire at the end of March, the Chancellor opted to extend this holiday until the end of June with the nil rate being £250,000, double its standard level until the end of September.
Perhaps more interesting was the decision to bring back 95% mortgages in the form of a mortgage guarantee in a bid to help first-time buyers. The Chancellor has suggested this policy has the backing of major lenders across the country but is facing backlash from critics who say it will do little to protect generation rent and only help higher income earners.
Our verdict
This was a critical moment for the Government and the Chancellor who used this Budget to balance the support individuals and businesses need with an insight on where he sees the country going as we recover from the pandemic. With many of the announcements trailed in advance, there were no major surprises, but it can be argued that today’s Budget is simply a placeholder for what is to come in the autumn, when the focus will be less on support and more on the Government’s vision and ambition for the rest of this Parliament and beyond.
If you would like to discuss any issues outlined in the Budget in further detail, then please do not hesitate to get in contact with Samir Dwesar.
