How Oxford reacted to the chancellor's budget plans

The Chancellor of the Exchequer, Rishi Sunak, yesterday announced his plans for the UK Government’s budget for the year from April.

In the budget, Mr Sunak set out a three-point plan which he claimed would protect jobs and livelihoods, fix public finances and ‘lay the foundations’ for the future of the economy.

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Among the plans he laid out were a freeze on fuel and alcohol duty, as well as a six-month continuation of many of the support schemes designed to keep businesses and workers from going under during the pandemic.

A pint in a beer garden

In his speech, Mr Sunak said furlough will be extended to the end of September with no changes to the scheme for employees. However, employers will start having to contribute 10 per cent as of the end of summer.

Support for the self-employed is also continuing until the end of September in two block grants. And after the Government has taken flak for not doing enough to support the self-employed he emphasised a further 600,000 people can now claim these grants.

For those on benefits or low pay, the £20 a week Universal credit uplift will also be continued for another six months.

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A business rates ‘holiday’ will also continue until June this year, to give companies a chance to recoup losses, and after that two-thirds of the full rate will be implemented.

Another tax holiday, the slashed VAT rate for tourism and retail businesses, will also continue until the end of September.

Representatives of Oxfordshire’s tourism businesses from Experience Oxfordshire have previously called for this measure to be extended.

Another measure which could have an impact on house buyers in Oxford, one of the most expensive places to buy a home outside London, is the plan to provide a Government-backed guarantee to mortgages.

New homes at Barton Park. Picture: Ed Nix.

This means that banks and mortgage lending companies could feel more confident lending cash to people buying houses who can only afford a 5 per cent deposit.

As part of his plan to ‘fix’ the UK’s finances, Mr Sunak said the Government will not raise the rates of income tax, national insurance or VAT, and will freeze the current tax thresholds.

However from 2023 it plans to raise the rate of corporation tax on company profits to 25 per cent.

Mr Sunak said this would likely affect only the largest companies, in a move similar to the so-called ‘windfall tax’ which some have called to be levied on businesses which have benefited from the pandemic like supermarkets and online retailers.

The Chancellor added the measure was announced two years ahead of its start date because ‘certainty matters’ for business.

As part of plans to ‘lay foundations’ for the future of the economy, the Chancellor announced a new Green investment bank, as well as new freeports around the country including in Liverpool, Teesside and Thames.

However, not all measures in the budget were welcomed by Keir Starmer, the leader of the opposition.

READ AGAIN: Our in-depth coverage of the budget announcement as it happened

He said it was not the time for Mr Sunak to take a 'victory lap’ and added the budget will not 'feel so good' for keyworkers with pay freezes, those families swaddled in debt, and those paying higher council tax.

He added that more council houses should be built instead of relying on the new mortgage guarantee to fix the housing crisis

Mr Starmer also said the six month extension to £20 Universal Credit payment uplifts was too short term.

Instead, he suggested UC needed to be overhauled, and while that was done, the uplift should be kept indefinitely.

In Oxford, a construction firm was disappointed over the lack of a ‘green tinge’ to the Budget to drive sustainable job and economic growth.

Laura Mansel-Thomas, partner at Ingleton Wood, a property and construction consultancy in Oxford, said: “While we welcome the renewed pledge to accelerate the green industrial revolution we are disappointed by the lack of flagship support. We wanted to see more of a green tinge to the Chancellor’s Budget to drive more sustainable job creation and economic recovery.

“Whilst we welcome the Chancellor’s comments on having a real commitment to green growth, our expectations were that the Government would go further.”

But Graham Jones of high street traders association ROX, welcomed the measures to extend support for businesses, including the VAT relief.

Graham Jones, of Rox - Backing Oxford Businesses Picture Oxford Mail

Mr Jones said: “That is very good news because we hope businesses can get off the ground in May or June. I don’t think too much is going to happen in April. But with hospitality opening up, the fact that this has been extended for a longer period of time I think they are playing it safe.”

Mr Jones added the Government’s plan to extend the support schemes beyond the planned end of the roadmap for leaving lockdown in June would help to give some certainty for the future if Covid cases spike again when schools open next Monday, March 8.

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Meanwhile, Oxford MPs also had criticisms for the plans.

Layla Moran, Liberal Democrat MP for Oxford West and Abingdon, said SMEs ‘have been left behind’ by the budget, as she vowed to ‘fight to protect our small businesses, which are the backbone of our economy and at the heart of our local communities’.

She called on the Government to put small businesses and hospitality at the centre of the economic recovery, with suggestions including maintaining the business rates holiday for all small businesses throughout 2021-22, not just until June.

And Anneliese Dodds, Oxford East MP and shadow chancellor, said: “"This budget confirmed that the UK has had the worst economic crisis of any major economy, due to mismanagement of our health crisis

“Unfortunately the budget failed to secure our recovery from such a deep crisis.

“There's no plan for a recovery for our NHS, no guarantee of help for the young unemployed, and no plan for our high streets.

“And the Chancellor is going ahead with his hike in council tax for families.

“This wasn't the budget that Oxford and its people needed. Nor did it support Oxford's key worker heroes- in fact, many of them will see their incomes squeezed under the Chancellor's plans.”