MGPLC asked its Chief Financial Officer, Chris Peach, for his three key insights in relation to this year’s budget. Read below to find out more…
With UK debt at its highest point since 1963, this year’s budget was a highly anticipated event with everyone wanting to understand the plan for getting the UK economy back on track after the impact of Covid-19. The key message from this budget is that our government is committed, through investment and growth, to support people, businesses and the economy through providing the boost it so desperately needs. These are positive steps in ensuring the UK “levels -up” and starts to recover from the events of the last year.
- Relying on Construction and Infrastructure: With construction and infrastructure being such a pivotal and important factor within the UK economy it was encouraging to see the Chancellors ambitious plans in relation to future infrastructure spend, from the launch of a new £12Bn infrastructure bank to the new Freeports across the country. Whilst these are positive initiatives, and widely welcomed across the industry, the success of them will be down to the speed of their implementation and accessibility across the wider supply chain. Only then will we see if they deliver the anticipated organisational and economic benefits they seemingly appear to promise. As many of our subsidiaries, people and clients rely on infrastructure projects this will be a crucial to aiding growth and recovery over the coming years.
The last year has also impacted UK housebuilders, however, the introduction of the stamp duty holiday in July 2020 provided the UK housing market with a life line. This budget has thankfully provided further support to this sector with the promise of more new houses, the brownfield fund pledge, availability of 5% mortgages and the extension of the stamp duty holiday. This immediate action is not only good news for housebuilders but also to the UK economy, it is immediate initiatives such as these that will aid recovery.
- Skills Crisis: The news of further investment in apprentices is very positive news, our departure from the EU combined with and stringent immigration criteria has meant we are potentially facing a labour shortage. Investment in future generations through training, apprenticeships and further education is encouraging and will help to prevent a skills shortage in the future, however, this does not solve the issue in the short-term, an issue this budget has not explicitly considered. From a Group perspective, more needs to be done to fill the short-medium term skills gap faced by many industries across the country.
- Net-zero: We all have a commitment and a responsibility, as people and organisations, to reduce our impact on the environment. A key phrase used throughout this budget is “net-zero” and how numerous initiatives are being introduced to achieve this, including the Green Investment Bond. These types of initiatives and packages must be utilised by organisations, they not only help tackle the wider issue of climate change, but can also help business and organisation operate in a more efficient and sustainable manner. Again, the success of these initiatives and packages will be down to accessibility and awareness, the more up-take and involvement across the board the stronger the chances of achieving “net-zero” will be.
This budget has detailed some of the ingredients needed to get the UK economy back up and running, the determining factor in all of this though is the speed in which it can be delivered. The time for change and action is now.
