Mayor calls for 'long-term' economic strategy after Budget is unveiled
- Credit: Emma Bartholomew
Hackney’s mayor has called on the government for a long-term economic strategy after the chancellor unveiled his 2021 Budget.
In response to the government's spending plans for the year ahead, delivered by Chancellor Rishi Sunak in the House of Commons on March 3, Hackney Mayor Philip Glanville praised the £20 increase in Universal Credit, despite it “only” lasting until September, and the further business rates holiday.
He said: “I wrote to the government in January urging them to extend rate relief to avoid needlessly putting Hackney jobs and businesses at risk, and I welcome that this support has been extended in full for another three months.
“But reducing this discount from July is too soon for many of our businesses, who will need months to recover, even after they have reopened.
“It also does not align with the welcome extension of the furlough scheme to the end of September.”
The chancellor revealed more than 700,000 people had lost their jobs since March, the economy had shrunk by 10 per cent - “the largest fall in over 300 years”- and borrowing was at its highest point ever outside of war time.
“What was initially thought to be a temporary disruption to our way of life has fundamentally altered it,” Chancellor Sunak said.
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However, he also stated that he has and will do “whatever it takes” to “protect the jobs and the livelihoods of the British people”, having announced £407 billion in support over this financial year and the next.
Still, he said the Office for Budget Responsibility (OBR), a non-departmental public body funded by the UK treasury, expects the economy to return to pre-Covid levels by the middle of next year, six months earlier than previously forecast.
However, it also expects the economy will be 3pc smaller than if the Covid-19 pandemic had not happened.
“It’s going to take this country and the whole world a long time to recover from this extraordinary economic situation – but we will recover,” said the chancellor.
But despite Chancellor Sunak’s claims that the budget was the beginning of “building our future economy”, Mayor Glanville expressed concern: “[The] measures are sticking plasters rather than long-term reforms to restructure our economy.”
Mayor Glanville was “disappointed” by the time taken for ministers to announce support, “just weeks” before it was due to end.
He added: “Leaving families worrying about putting food on the table and businesses facing invidious decisions about furloughed staff and their financial future."
The mayor was also critical of freezing income tax threshold and public sector pay, saying it was a “kick in the teeth” after Hackney’s key workers “put themselves at risk”.
But the chancellor said the tax policy was "progressive and fair": "Nobody’s take home pay will be less than it is now, as a result of this policy."
The Mayor was also “astounded” the chancellor did not address the councils’ public health funding from next month or how to fill funding gaps "in the middle of tackling a pandemic".
The mayor called on the government to conduct its review of long-term local authority funding and, while welcoming the extension of a stamp duty holiday until June 30, questioned whether it is a “good use of public money” to “prop up a failing housing market” rather than fund a new generation of council homes.
The extension of the stamp duty reprieve aims to continue helping young buyers onto the housing ladder, alongside a new policy "to stand behind homebuyers" with a mortgage guarantee.
Chancellor Sunak said the government has delivered "one of the largest, most comprehensive and sustained responses this country has ever seen" and stated: "These are significant decisions to have taken. Decisions no chancellor wants to make. I recognise they might not be popular.
"But they are honest."
The alternative, he said, would mean leaving the country's deficit "untreated" and its debt "a problem for someone else in the future to deal with".
But the mayor added that ministers have been late to react throughout the pandemic, especially "on giving financial certainty" to residents and businesses.
He said: "We’ll work as quickly as possible to get additional funding and grants announced today to those who need it."