Post-Budget analysis

• Short-term business and job support measures. In a widely welcomed move, the Chancellor extended the Government۪'s business and job support schemes until the autumn.
• ~~Excluded. An estimated 600,000 more people - the newly self-employed in 2019-20 - are now eligible for the Government support through SEISS. Millions remain excluded from support schemes, however, as highlighted by Martin Lewis on Andrew Marr.

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• Social security measures. Maintaining the £20/week uplift in Universal Credit was widely welcomed, but many campaigners have argued for a more permanent reform of social security.
• ~~Millions facing income crisis. NEF research has found that even with the uplift, a third of people are expected to fall into hardship by May, and almost 1 in 5 will be living with an "exceptionally high risk of material deprivation".
• ~~Cliff-edge. The Resolution Foundation has highlighted that the planned cut in Universal Credit is set to coincide with unemployment peaking in the UK, which would be both "disastrous" for families and undermine macroeconomic recovery efforts.
• ~~Legacy benefits. The Resolution Foundation also pointed out that many people on "legacy benefits" (pre-UC benefits such as Income Support) have not received an equivalent uplift, which the Disability News Service argues leaves 1.9 million disabled people worse off.  
• ~~Sick pay. The RSA has highlighted the need to reform Statutory Sick Pay - amongst the least generous in the OECD - a measure which gains clear majority support from both Conservative and Labour voters.
• ~~Longer-term reform. The RSA also argued the Government should replace Job Centres with Job Security Centres (bringing together unions, employers and others) as part of a new "Blueprint for Good Work" and look towards introducing a Universal Basic Income to address economic insecurity, elements of which could be put in place now.
  

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• Rebuilding public services? Despite widespread coverage of this being a "high spending" Budget, the Chancellor's announcements took £16bn out of pre-pandemic spending plans and "bizarrely made no provision whatsoever for virus-related costs beyond next year" (Economist). Day-to-day spending per head is set to be 6% below 2010 levels in real terms by the middle of this decade, in sharp contrast with the "build back better" narrative and popular support for increased public service spending.
• ~~Is that possible? The Economist coverage of the Budget highlights demographic pressures and argues "it is hard to find waste in the public sector", limiting scope for cuts. The IFS argue the Government's public spending plans "simply look implausibly low", in light of ongoing pressures on education, the backlog of court cases, and the need to reform social care, of which there was no mention in the Budget.
• ~~Health. The Health Foundation argues that major pressures on the health service were not factored into public spending plans: the cost of managing Covid-19 as it becomes endemic, the need for more capacity in the health system, and the backlog of patients that has built up over the pandemic.
• ~~Social care and inequalities. Beyond these direct pressures, the Health Foundation argues the pandemic has exposed the fragility of the NHS to shocks and the need to tackle the "broken" social care system and "deep-seated" socioeconomic inequalities, both of which increase the burden on the health service and neither of which were addressed by the Budget. (See the "Inequalities" section below for detail on the proposed 1% pay rise for nurses.)
• ~~An austerity Budget? Oxford economics professor Simon Wren-Lewis has labelled Sunak's budget "an austerity budget" while the Independent's Ben Chu has a Twitter thread examining "how exactly Sunak is bringing austerity back to public services".

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• Taxation. The Chancellor reaffirmed the Conservative manifesto commitment to not raising income tax, VAT or National Insurance, limiting the Party's room for manoeuvre when it comes to raising taxes in future.
• ~~Freezing income tax thresholds. The decision to freeze income tax thresholds - bringing more people into paying income tax and into higher tax bands - is one way to raise revenue from income tax while sticking to this commitment. While this measure is progressive, it is also the least progressive way of raising income tax.
• ~~Corporation tax to rise to 25% in 2023. The Chancellor has accepted arguments that corporation tax cuts have not stimulated investment (e.g. the final report of the IPPR Commission for Economic Justice), and the planned rise would bring headline rates of corporation tax more in line with the G7. There remains a question mark as whether the proposed rise will actually occur in full.
• ~~Council tax. Meanwhile, local authorities under financial pressure are already being forced to plan increases in council tax - which is highly regressive (see Sun coverage) - due to cuts in funding from central government, which the Financial Times has branded "austerity by stealth".

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• Super-deductions. In the near term, an est. £25bn will be spent on allowing businesses to write 130% of the cost of their physical investments against taxable profits. This could stimulate investment in the near-term, though there is a risk of "deadweight loss" - lowering taxes for businesses who would have invested anyway. Another risk is that super-deductions distort investment patterns by subsidising investment in plant and machinery compared to intangible assets.
• ~~Amazon wins. The untargeted nature of the tax cuts means that digital business who already pay low levels of tax in the UK - e.g. Amazon - will be able to further reduce their tax bills for investment that would go ahead anyway.

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• Levelling-up. Two of the Chancellor's "levelling-up" measures - freeports and the Levelling Up Fund - have come under fire.
• ~~Pork-barrel politics. Financial Times analysis has found that Conservative seats were consistently placed in a higher priority category for the Levelling Up Fund than their deprivation level would indicate, and the reverse is true for Labour seats. The Government is yet to publish its methodology, as promised. The Times' George Grylls has a thread on communities secretary Robert Jenrick's constituency receiving the "maximum amount of money it could have possibly received".
• ~~Freeports. The Chancellor announced the Government's freeport areas in the Budget. The criticism of freeports is that these encourage a politically costly race to the bottom, while the "advantages to business are almost non-existent", as argued by the UK Trade Policy Observatory. Tax Justice UK's submission to the Government's freeports consultation highlights significant money-laundering risks in addition.  

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• Recovery. IPPR has argued the Chancellor's stimulus is only half of what is needed to secure recovery, comparing the Budget's proposals to Biden's rescue package (see below), which is more generous despite the UK facing a deeper recession.  
• ~~Fiscal constraints? A popular narrative (e.g. Daily Mail) that works against arguments for higher spending is that the government's "colossal" debt will have to be paid back over "many generations". BBC economics correspondent Andy Verity has argued against this narrative here.
• ~~Stimulus and the deficit. The IMF and OECD have argued that the Government should prioritise recovery over fiscal consolidation - but these two goals aren't necessarily in tension. IPPR has argued that stimulus may also consolidate the public finances, as it would increase tax receipts and employment. The BBC's Andy Verity has highlighted that efforts to "balance the books" over the past decades have coincided with an increase in public debt, speaking to the need for governments to prioritise recovery.

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• Environment. Carbon Brief features a detailed look at environmental measures in the Budget and summarises the media response - overwhelmingly that the Budget fell short of the UK's environmental ambitions.
• ~~Political pressure. SPERI Professor Michael Jacobs has argued that COP26 and a shift in the Conservatives' electoral coalition has pushed the Government to change its approach to environmental policy, and that the Chancellor will likely have more "green goodies" to announce in the autumn as the climate summit draws near.  
• ~~"No vision for sustainable economic growth". UCL IIPP's Josh Ryan-Collins has argued that, despite the appearance of radicalism, this Budget is a reversion to economic orthodoxy. Common Wealth's Mat Lawrence argued that in the face of climate change, we need a "post-carbon growth coalition" in his analysis for the New Statesman.
• ~~Fuel duty. For the 11th year in a row, fuel duty has been frozen. Carbon Brief argued last year that these freezes have increased CO2 commissions by up to 5%.