Nick Bowes takes a look at what we should expect from this week’s Spring Budget, and why more business as usual isn’t good enough for the capital.
The Budget sees the Chancellor of the Exchequer, Jeremy Hunt MP, needing to walk a very fine tightrope.
The nation’s finances remain tight and this, despite better-than-expected tax take in recent months, leaves little wriggle room for spending splurges or tax cuts.
But on the other hand, there is considerable political pressure on the Chancellor to offer some goodies to the voters – the Conservatives continue to languish in the opinion polls and on May 4th there are elections across England.
But with no elections in London this year, the next scheduled time the voters go to the polls will be the following May, when the city decides who the next Mayor will be. So will London get the attention from the Budget that it needs?
Complacency about London’s economy
It’s no secret the city has felt neglected and squeezed out over recent years by a levelling up agenda that favoured the North and Midlands. Except for a brief period of a few weeks under Liz Truss when London was suddenly flavour of the month, the challenges facing the city have not been near the top of the priority list of recent governments.
The recent report by Centre for Cities ought to be a bit of a wakeup call that the complacency surrounding London’s economy must end. For too long, the continued success of the city has been taken for granted, and the huge tax revenues it generates simply banked as a given.
But there are very real threats to this continued success, made worse by the fallout from the Covid pandemic.
The Chancellor would be wise – if only for the sake of the nation’s financial solvency – to pay more attention to the competitiveness of the city. That means prioritising investment in the city’s infrastructure and skills.
London’s transport infastrucutre
But I wouldn’t hold your breath if you are looking for any big announcements on infrastructure spend in London.
The list of potential projects is long – Bakerloo Line Extension, West London Overground, Brighton Mainline Upgrade and Crossrail 2 to name but a few – but the chances of these receiving much more than warm words is pretty slim.
One to keep an eye on might be the DLR extension to Thamesmead, which feels the most likely scheme to move ahead over the coming years.
Wider additional funding for TfL seems unlikely beyond what is already agreed for the period up to 2024, but this will leave the organisation still needing to make considerable in year savings. For campaigners seeking a slug of cash to boost the car scrappage scheme, I fear you will be disappointed.
Devolution
The Chancellor has expressed support for more fiscal devolution, allowing Mayors and local authorities to spent more of their own income on measures to promote economic growth.
We might hear more on investment zones, which look like being part of wider devolution packages, with hints the West Midlands and Greater Manchester are to benefit. Given the Mayor submitted a bid for six investment zones in the city, to get none would be a real blow.
Tackling the cost of living
Much of the attention ahead of the Budget will be on cost of living pressures, and it will be hard politically for the Chancellor to do nothing in this area.
London, already suffering a cost of living crisis given how expensive it is to live here, will benefit should the Chancellor decide to extend support for helping people pay fuel bills. (This is currently due to come to an end in April.)
Also expect an announcement on childcare costs, which have remarkably united those on the left and right in calling for something to alleviate the financially crippling impact of parenthood.
Conclusion – politics keeps London down the pecking order
It pains me to say it, but the Budget is likely to continue to be built around the key battleground seats of the North and the Midlands, with London way down the pecking order.
It may be that the language towards London is more tempered and less confrontational than it has been in the past, reflecting the different faces in key Ministerial roles.
As the General Election gets closer, the focus on the key battlegrounds in the Red Wall seats seems likely to only grow further, and London will be squeezed out. This Budget could put a stop to that, and place the interests of London at its heart.