What Are Your Initial Thoughts on the Chancellor’s Spring Budget?

Henrietta Lindsell
Co-Founder of vocL

What are your initial thoughts on the Chancellor’s spring budget?

VocL Voices’ Responses

Rebecca Harlow
Net Zero Carbon Lead, Arcadis

For me, the most exciting part of the spring budget was the announcement of the new innovation zones. As part of wider devolution, the commitment to areas of focus across the country offer an opportunity for places and their communities to thrive through driving economic growth will benefit those who need it most. However, like all budgets- it is not the announcement which causes a step change to people and business, but the follow up and ability to implement and media focus on this will be even more important than the analysis of the announcement.

Richard Sansom
East Midlands Network Director, Cadent Gas

Net Zero is one step closer! Acknowledgement of a greener, more sustainable, future is a great start. Specifically, up to £20bn of support has been allocated to Carbon capture technologies (CCS), which is a significant, and will be encouraging many sectors to accelerate their investments into their transitional plans for zero carbon future. More to do though to provide clear pathways, information and incentivisation for consumers and businesses to reduce their carbon output whether: heating their home and/or workplace, operating their mode of transport or selecting products and services.

Sion Lewis
Associate, Arup

The proposed investment zones are a positive step forward to levelling up across the country. However, a clear plan of how these will improve the local and wider regional prosperity need careful planning. To secure inward investment clear, flexible masterplans will be key. Part of this should be providing incentives for green developments which can build on the investment in carbon capture etc. A broader approach to energy, inclusive of generation and storage technologies in addition to nuclear would have been welcome. This would increase yields from our natural energy sources thus improving the longevity, blend and reliability of UK energy production.

Will Lankston
Managing Director of B2B at the Timpson Group

To be honest, after Trussonomics, it was inevitable that the chancellor was going to play it relatively safe! It was great to see the energy price cap being extended. It was also fantastic to see the massive investment in reducing the costs of childcare. This should see more parents returning to the workplace, but I suspect it will take quite some time before the significant labour shortages are corrected. Unfortunately, the chancellor has missed another opportunity to fix the inherently broken apprenticeship levy scheme. Businesses have wasted £3.5bn in unused levy funds over the past 3 years. Giving businesses the freedom to decide on how they develop, train and upskill their workforces is crucial to increasing our productivity.

Justine Ball
Partner, Shakespeare Martineau LLP / AMPA

There were some promising steps taken by the Government to help manage the cost of living crisis plaguing a significant proportion of households, with the announcement of childcare reform and funding, as well as extending the cap on what we pay for our energy. The Chancellor however was quiet on green markets and wider investment in green technology (save for the specific mention of nuclear energy). Although, we may see more on this in the Autumn statement. Further, announcements in relation to the skills market would have been welcome. Given the current skills gap in many markets, upskilling our people is key – either through further reform/investment in the apprenticeship levy and/or the introduction of new initiatives.

Gonzalo Coello De Portugal
Associate – Design and Project Leadership, Arup

Mr Hunt has succeeded in appearing orthodox, methodical, and balanced in his approach. The 2023 budget ticked enough boxes to ensure that markets, tory voters, and the general public (in that order of importance) would remain calm. It does so despite some trickery to defer to the next Government, after 2025, the impact of the cuts announced last November or the cost of the most popular decision from this exercise: extending the childcare subsidy. One is left with the impression that, if we used an Artificial Intelligence programme to work out the budget, we would have found a similar content in the red briefcase of the chancellor. AI Hunt would be trained with data from the past, learning from tried and tested fiscal measures, and constrained with parameters from the present, such as the rising interest rates, cost of living crisis, and the political strategy to remain in power. The outputs of the AI can be tweaked to ensure that most stakeholders receive a share of attention, transmitting in this way some impression of fairness. However, if AI Hunt considered that a general election is due in 2 years, it would avoid tackling the deeper problems with a long-term vision, or consider the UK situation in the wider global economy. Let’s look at three areas that require courage, new data, or imagination; qualities that AIs do not have… yet. First, the fight against climate change. Biden has launched the Inflation Reduction Act (IRA), $369 billion to boost green technology in the U.S. The EU has responded with a plan based on 4 pillars (the regulatory environment, financing, skills and trade) aimed “to make Europe the home of industrial innovation on the road to net zero” (von der Leyen). This would be too bold for AI Hunt, which announced another freeze on car fuel taxes (extended since 2010 with a total accumulated cost of £80bn and countless carbon emissions), suspended the construction of the HS2 train line into central London or Manchester (£2bn saving), and attempted to boost the economy outside the South East with twelve low-tax “investment zones” supported by £80m each. Second, Education. The extension of childcare services is welcome, but AI Hunt has applied the same parameters of funding previously used for above 3 years old. Since those subsidies were underfunded, nurseries were overcharging toddlers and losing money with 3-4 year old children. Unless the funding is corrected, they will now lose money with all children. The budget does not address the underfunding that public schools have suffered from the 2010 cuts, expressed in the teacher strikes. That’s the danger of feeding old data to an AI. Third, Productivity. An ongoing problem which AI Hunt aims to solve incorporating more people to the labour force (migrants, women, and older workers), rather than promoting deep changes in the way people work, or tackling the lack of long-term investment of companies. The tax allowance now introduced for corporations is temporary, and the OBR watchdog considers that high investment over the next three years will be offset by lower spending after that. Hatching a wider plan would require imagination, beyond solutions already tested. AlphaGo, an AI applied to games, defeated the world champion of Go in 2016. Its younger sibling, AlphaFold, applied to scientific discovery, succeeded where humans had failed and resolved the structure of every possible protein in 2020. The chancellor should be careful: if an ambitious plan with long term vision is not required, there may be an “AlphaGov” AI on the way to take his job. And it will have been funded with the green act from Biden.