The Friday Blog: Marmalade Escapade
Heading into this week, I sensed it could mark a pivotal point in the trajectory of the Conservative Party, clarifying when the next General Election might occur. Perhaps it was simply naivety, or that this Spring Budget was particularly underwhelming, but my views have changed since Monday. With another vote on the Rwanda bill on Monday, a well-received Spring Budget could, and was perhaps intended to, be a positive jumping off point to call an election before the end of the month. Whilst I will not try to predict exactly when the election will be called, this past week has unfortunately done very little to inform my view either way.
Though I would like to give myself credit for 'being interested in politics at a very young age' á la Succession's Connor Roy, my first introduction to Jeremy Hunt was through the 2019 Conservative Party Leadership Election (I should note to avoid judgement here that I was just 16 at the time). Upon learning he would be Johnson's final opponent I thought it worth looking into him, and whilst his political history exhibits the standard trajectory one might expect from a Conservative from Surrey with ties to landed gentry, I was surprised to learn that he was also a failed Marmalade exporter. The vote itself happened to take place while I was on a school trip. We were staying in a hostel in San Jose, had not been allowed to bring phones, and one of the sixth form boys - who at the time had hopes of one day becoming Secretary of State for Transport - asked if he could use the group phone overnight to keep up with the results. He was team Hunt. The teachers laughed and obliged whilst I chose not to admit that I would have liked to do the same. Though the use of the group phone became less sacred as the trip progressed, and it was passed around so we could stay updated on the ongoing season of Love Island (again, I was 16).
Anyway, onto the Budget update. I must apologise for beginning with a tangential ramble but without much of a personal interest in cricket or rugby, unlike our seasoned blogger, I needed something else to pad this out. One of the more notable announcements was the funding allotted to the NHS; £5.9 billion to be exact, which took the total to £164.9 billion, with £2.5 billion for extra day-to-day budget and £3.4 billion to realise the NHS Productivity Review. The £2.5bn has been met with mixed reviews, naturally more money is generally 'better', but it is unlikely to account for costs of the rising backlog and sustained industrial action. Though the £3.4bn, if allocated effectively, has been said to allow for a 2% average productivity growth by 2030 and with it, cumulative savings of £35bn. It is a far cry from what the NHS Confederation had asked for (£6.4 billion per year in additional capital funding) and has not yet been committed to being followed within NHS procurement structures. But still, it is a significant chunk of money, it was supported by Amanda Pritchard, and it recognises the importance of AI, digital and tech in bolstering the wider NHS system.
Interestingly, Jeremy Hunt also stated Treasury’s commitment to prioritise proposals that deliver annual savings within five years equivalent to the total cost of the investment required, something we would very much welcome. But this appears to be more an attitudinal change than anything that has been committed to on paper just yet.
There were various pots announced for manufacturing with frequent references made to Life Sciences and sustainability, unfortunately a lot of the ‘announcements’ were simply voicing commitments to the 2023 Autumn statement. That being said, £14 million has been allocated to boosting the UK’s public sector research and innovation structure, on top of the £750 million package for R&D announced in Autumn. This comes alongside an additional £92 million put to boosting health resilience and an announcement that the Life Sciences Innovation Manufacturing Fund, worth £520 million, will open for applications in the Summer for large scale transformational investments, and in the Autumn for SMEs. This is something we were particularly pleased to hear as we have been passing on feedback surrounding the difficult thresholds on previous schemes, and we will continue to work to ensure this fund can be utilised effectively for our sector. Additionally, the allocation of the £4.5 billion Advanced Manufacturing Fund has been made clearer, with over £2 billion going to the automotive industry and £975 million going to aerospace over the next five years. Hunt also announced a £242 million investment into Barking Riverside and Canary Wharf to increase housing and transform it into ‘a new hub for life science companies’. Though it is unclear what this actually means for the area, the Guardian highlighted the link between the areas receiving levelling-up investments and the constituencies that will be close calls in the next general election.
Outside of sector-specific investments, the Budget tries to recognise the importance of supporting SMEs. To do this, the Government announced an extension of the Recovery Loan Scheme, now the ‘Growth Guarantee Scheme’, as well as changes to the VAT registration threshold. As part of a commitment to prioritising long-term growth, full expensing was made permanent in the 2023 Autumn Statement, something that has now been forecast to increase business investment by £14 billion by 2028-29. Surprisingly, Hunt also axed the non-dom tax break. An admittedly smart move following complaints of Akshata Murty, the Prime Minister’s wife, heavily benefitting from her non-dom status, though she later agreed to start paying tax on her overseas income. The U-turn also allowed Hunt to scrutinise the Labour Party for having no concrete plans or policies, having just stolen one of their main ones.
These announcements, the good and the bad, must be taken with a pinch of salt. It is easy to make promises when you know it is unlikely you will have to keep them, and even if there are good intentions, the Conservatives may not get the chance to prove them. This Spring Budget elicited mild reactions from other Conservative MPs, and myself. It would appear that the party will not go out with a scandalous bang, but instead, they will cling on with optimism slowly petering out, and a lacklustre Budget seems fitting for possibly their last one.
Next week the blog will be back in Richard’s hands, but in the meantime, I hope everyone has a lovely weekend and Mother’s Day.
