You wait ages for an update on the economy and then two come along in a week.
Today, the Chancellor of the Exchequer provided some meat on the bones of the Prime Minister’s speech last week with a raft of new commitments designed to stimulate the economy, create new jobs, and kick-start the levelling up agenda. Central to this is supporting young people into employment, and tackling the retrofit challenge to decarbonise existing homes across the country. There were also significant announcements of support for the tourism and hospitality sectors – including giving people up to £10 per meal they eat out in August.
Here are our top 5 takeaways from today’s speech.
- This week it’s ‘jobs, jobs, jobs’
The Government has, to its great credit, worked hard to protect jobs in the UK due to Covid-19 by introducing the ‘furlough’ scheme. Today was all about creating new jobs and opportunities, not retaining existing ones. The announcement of the Construction Talent Retention Scheme, an online portal that supports redeployment of staff at risk of redundancy across the sector will be something that the built environment sector will want to tap into.
For BECG this was especially pleasing. The work we’ve been doing with our client Communities that Work to ensure an ‘Opportunity Guarantee’ directly influenced the Plan for Jobs, including investment in green jobs, investment in support services like employment advice services, and the offer of an education place, apprenticeship, or job for every young person. The financial incentives to support this, across many sectors including the built environment, will support those who were at risk of being a ‘lost generation’.
- Get Britain buying
Responding to the fact that house purchases have fallen significantly in May, the Government has given a Stamp Duty holiday for all homes up to £500,000 until 31 March 2021. This is expected to save people on average £4,500, though it does little to help most first time buyers who already pay less. However, the second hand housing market may receive a boost.
An undiscussed benefit of this will be that the older people’s housing sector will finally (albeit temporarily) get their wish to see downsizers exempted from Stamp Duty. Whether or not this actually increases the level of downsizing, freeing up homes for young people to move up the housing ladder, remains to be seen but the onus will be on everyone in the sector to make the case for this holiday to be extended further.
- Green recovery
The retrofitting challenge is a significant one, and calls for action have certainly been getting louder over recent months. Funding for retrofitting of public sector buildings and vouchers for private housebuilders is welcomed, with a voucher system designed to help improve insulation and heating systems to improve energy efficiency.
There was also the announcement of a £50 million pilot to help the social housing sector find a solution to the issue of retrofitting – arguably the biggest challenge on retrofitting. BECG is working with one of our clients and a leading think tank on a report that will set out the pathway to retrofitting the social housing sector and look forward to seeing that recommendation launched next week.
- There will be another Budget and Spending Review in the Autumn
Always expected, but confirmed today that the Budget and Spending Review will take place in the Autumn. This will be focussed on the ‘rebuild’ phase of the Government’s Covid-19 response – and we’re likely to see more detail of infrastructure funding and ‘shovel-ready’ schemes that the Prime Minister hinted at last week. We will also see later this month the Planning Policy paper that will apparently revolutionise the planning system. But once again, much of the significant long-term detail has been put off until later in the year.
- This cannot last forever
The Government’s significant investment in jobs and job retention has been remarkable but it seems that time is running out. Insisting that the furlough scheme cannot be extended forever, and payments for bringing people back to work, demonstrates that eventually the Government has to take the economy’s stabilisers off and let it recover on its own.
So after this, what next? The Autumn Budget will no doubt set the scene for how the economy will be ‘reset’ or ‘restarted’, but the focus will be on how the private sector can stand on its own feet, create jobs and drive growth.
