Recognition of the vital role of culture and the creative industries

Professor Vee Pollock, Dean of Culture and the Creative Arts

The Chancellor’s funding for arts, culture and heritage announced in the Budget is most welcome. It signals clear recognition of the vital role culture and the creative industries will play in the nation’s social and economic recovery. The creation of the flexi-job apprenticeship will enable more and smaller industry bodies to act as agencies for the sector, as well as promising to open up opportunities for those wishing to join the industries that make such a valuable contribution to our economy.

Bolstering the recovery of the cultural and creative sectors is undoubtedly crucial, but the issue of rebuilding a sustainable, robust and thriving cultural sector reaches beyond recovery, and beyond venues and organisations; it rests on supporting and developing our full cultural ecology for the foreseeable future. Integral to this are the contributions of graduates and emerging creatives, many of whom go on to be at the heart of our freelance creative community. It is these young people who will work with venues and organisations and across sectors to drive this country’s world class reputation for high-quality cultural content and catalyse innovation.

It is only through rethinking skills provision and pathways between FE, HE and the cultural sector, and enhancing career pathways, that we will equip the sector of the future for the challenges of the future. We need more initiatives to support freelancers and those at early stages of their careers to enable their creativity, to support the creative economy, and to safeguard the significant steps the sector has taken in diversity and inclusion. Put simply, it is not about enabling the cultural sector to survive, but about ensuring that it thrives.

Little of the investment needed to acheive a zero carbon future

Dr Sara Walker, Director, National Centre for Energy Systems Integration

With the Government’s 10 Point Plan and Energy White Paper, there was momentum and belief around the idea that this Government would plan for a green economic recovery. Sadly, the March 2021 budget delivered very little of the needed investment for our Zero Carbon Future.

There are some glimmers of good news. The December 2020 White Paper had a target of 1GW of floating offshore wind energy by 2030, and the budget has proposed a £20m investment programme to support the development of technologies for this. The North East is well placed to deliver on this ambition with the Floating Offshore Wind Centre of Excellence, as well as the University’s own work on stability for floating turbines.

The White Paper also proposed 5GW of hydrogen production by 2030, with a hydrogen strategy expected in early 2021. The budget allocated £4.8m for a ‘Holyhead Hydrogen Hub’, although this is well short of the £1bn+ investment into hydrogen which the White Paper outlined.

On transport, much of the White Paper and 10-point-plan has a focus on zero-emission road vehicles. The North East is, again, well placed given the production of Nissan Leaf batteries in Sunderland. The budget also announced investment for rail, with the £30m Global Centre for Rail Excellence. No doubt colleagues in the University’s Future Mobility group will have a keen eye on these road and rail developments.

Our research at Newcastle University tells us that all of these sectors interact, and so it is vital to take that big picture, whole systems view. As Director of CESI, I hope our research can have lasting impact in highlighting how sectors such as wind, hydrogen and transport can link and be developed in a way that benefits from those interactions. I hope we can see more ambitious spending plans announced ahead of COP26, to demontrate our commitment as a country to achieving a zero carbon future.

A Budget framed by historical precedent

Dr Martin Farr, Senior Lecturer in Contemporary British History

Particularly in unprecedented times are there benefits in precedents; historic events demanding a sense of history. Yesterday’s was an unusually time-deferred Budget, and felt – not unreasonably – like a holding exercise in the middle of a national emergency, but it’s unusual for a Budget so immediately to be framed by earlier ones. The first and most obvious historical precedent, as is has been throughout the pandemic, was wartime. but others peppered responses to the Chancellor of the Exchequer’s second budget. Given the quite unprecedented – and uncosted – personal branding in which he’s been engaging, Rishi Sunak’s Second Budget is how it may come to be known.

Reginald McKenna in the First World War, or Kingsley Wood in the Second, would not have recognised, or sought, such self-promotion, though Hugh Dalton most certainly would. Dalton it was who was resigned by Clement Attlee in 1947 for disclosing to a journalist a minor measure in his budget minutes before he delivered it. Sunak would be an ex-Chancellor today were Boris Johnson’s standards those of Attlee; as the Speaker grumpily replied when the Prime Minister heralded the widely-leaked budget minutes beforehand, “I think I already know most of it”.

Though some resist the comparison, the closest equivalent to the pandemic, in both time and degree, is the Second World War. So it was convenient – and not immaterial – for the Chancellor – “our borrowing is the highest it has been outside of wartime … the highest level of borrowing since world war two … comparable only with the amount we borrowed during the two world wars” – to invoke a time of national peril.

The 1960s, whatever Thatcherites went on to say, wasn’t quite that, but Roy Jenkins beams out from the morning newspapers more than at any time since his death thanks to reference to him by the Office for Budget Responsibility, a body he’d have cherished had it been around when he was Chancellor. Sunak revealed that the tax burden is scheduled to be the highest since 1968, the first full year of Jenkins’s Chancellorship; that was the age, George Harrison sang, to “declare the pennies on your eyes”.

Public sector net debt has risen above 100 per cent of GDP for the first time since the first year of that benighted decade. Corporation Tax, introduced by Jenkins’s beleaguered predecessor James Callaghan in 1965, was by 1969 raising 3.3 per cent of GDP, the highest on record. The extraordinary increase Sunak announced yesterday – from 19 to 25 per cent – will take Corporation Tax to 3.2 per cent in 2025-26. It’s the first time Corporation Tax has been raised since Denis Healey did so in 1974, a year which made 1968 feel like a land of honey.

The problem Jenkins had was that he became Chancellor during a crisis and had, by his own estimation, “two years’ hard slog” before the general election. Sunak, at least, has four, which helps; the government lost in 1970, and the Chancellor was blamed. As it is, the Chancellor known as Rishi has the time and the inclination – neither of which Jenkins had – to cut taxes before the next election. And for that there are precedents aplenty.

What does this mean for the skills and lifelong learning agendas?

The Conservatives have shape-shifted to become a party of public spending

Dr Alistair Clark, Reader in Politics

Against the backdrop of the COVID-19 and ongoing Brexit crises, Chancellor Rishi Sunak’s second budget has been one of continuing to spend today, but with the warning of ‘tough decisions’, and with many commentators predicting increased taxes and/or spending cuts alongside inflation, to come in future. Support for various COVID-19 measures such as Furlough have been pushed further down the road, to at least September for many of them. There are four points of political context worth remembering while poring over the detail of Sunak’s speech. Firstly, the difficulty of exiting from COVID-19 support measures when much of the economy is being supported by them. Secondly, the tension between the promised ‘levelling-up’ agenda from 2019 and support for new ‘Red Wall’ Conservative voters, and maintaining support in the Conservative Party, which is ideologically more oriented towards cuts than spending. Thirdly, Sunak’s ongoing positioning for leadership of the Conservative Party when Boris Johnson stands down. Fourthly, the forthcoming sub-national elections in May 2021, which will be the first, and overdue, electoral test of the Johnson government.

The emphasis on the economy and the claim that there will be no income tax, national insurance or VAT rises will suffice in the interim to keep a section of the Conservative Party happy, even if there may be grumbling about longer term rises in Corporation Tax. An infrastructure bank for Leeds, port infrastructure and a Freeport in Teesside, and a new economic campus with the Treasury and other economic departments relocating some capacity and jobs to Darlington, indicates that ‘Red Wall’ arguments are also being heard. Local politics has clearly mattered. The Conservative Tees Valley Mayor Ben Houchen was mentioned, and the area spoken about at length, arguably more than any other area in the budget. It is, of course, entirely co-incidental that the Tees Valley Mayoral position is up for election in May 2021.

Support for high streets, communities and levelling-up may be welcome, but the answer in resolving these issues is not more pots of centrally-held money which can be applied for, but in more meaningful devolution and ability to raise money locally without central control. This was not addressed, although the speech contained a major hint about the UK government’s view of devolution. Sunak’s speech contained a direct attack on Scottish and Welsh devolution in proposing to spend directly in both countries. Scottish and Welsh governments, already at loggerheads with the Johnson government on Brexit, will no doubt respond forcefully. More broadly, Labour will also find it difficult to challenge a Conservative Party which, enabled by the pandemic and its so-called ‘levelling-up’ agenda, has shape-shifted to become a party of public spending, robbing Labour of a key argument. In the meantime, as with most things this Conservative government has touched, the can of dealing with the COVID-19 finances has been politically kicked down the road, while major pressing issues such as health and social care barely merited a mention.

Can £5bn save our High Streets?

Dr Luca Panzone, Senior Lecturer in Consumer Behaviour

The retail sector has been clearly affected by changes of lifestyle brought by COVID, as research we recently carried out shows. The idea of announcing support for the high-street is important, because physical stores are those that have been affected the most as a result of the coronavirus pandemic.

The government has opted for investments in the High Streets rather than focus on retail more generally, an indication that this retail channel is considered particularly important. But does the support announced today, of £5bn to help High Streets reopen, go far enough? The figure seems on the low side, as we estimated joint losses of £40bn for each non-food and restaurant businesses. At the same time, it does not seem to differentiate much within the high-street where large and small stores can co-exist, and it is not clear if stores who are not on the High Street, but which have had to close due to COVID, are eligible.

A key question is also whether stores will be able to remain open if habits - both in terms of purchasing habits and the frequency of going to the office - have shifted in the long-run. If shopping online stays, and people spend less time in their office in city centres, the money spent for reopening may not be conducive to long-term growth in the sense that the government expects. Retail in high streets is still heavily dependent on physical footfall, and a lot of the success of this monetary support will depend on the ability to have people return in the high streets in sufficiently large numbers.

It would have been more appropriate under the circumstances to provide grants to allow these businesses to diversify their retail, whether that is selling more online or adopting new forms of retail such as food box delivery schemes.

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