As Business West expected, the public finance position for this year and into the future made for stark reading and confirmed the degree of economic shock our region has experienced due to COVID-19. The UK’s economy is only expected to return to pre-pandemic levels two years from now, much slower than we previously hoped.
As a region, Business West is disappointed with the government’s lack of capital investment announced yesterday. Some minor funding has been allocated to the West of England Combined Authority for local transport improvements through the Transforming Cities Fund. Elsewhere it was thin pickings - with our regional leaders having to bid against other English regions for a share of the new £4 billion Levelling Up Fund for local infrastructure projects to support our area’s economic recovery. We hope this doesn’t all ‘head North’.
Extensions to grant support for businesses whose premises remain closed under high level tiers was absent despite the end of the national lockdown next week. Whilst most public sector workers outside the NHS have their pay frozen, the 2.2% increase to the National Living Wage and similar increases for younger workers and apprentices from April 2021 will further strain business margins in the private sector. Given Brexit is just 6 weeks away it was surprising the Chancellor made no mention of this – despite the subdued growth figures assuming an EU trade deal.
The Government’s plan for paying for the crisis will emerge in the Spring but at the moment he is keeping businesses very much in the dark.
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