What Cambridge made of the Spring Budget 2024
Jeremy Hunt has unveiled his Spring Budget 2024, with a 2p cut in National Insurance, the extension of the Household Support Fund and confirmation of a long-term funding settlement for a Cambridge development corporation among the announcements.
You can see the measures at a glance here, and read what was said about Cambridge here.
We’ve been gauging reaction from politicians, academics and experts.
Labour MP calls it “desperate” and lacking “substance”
Daniel Zeichner, Cambridge’s Labour MP, was not impressed.
He described is as “a real let-down, with nothing announced that hadn’t already been leaked - including stealing Labour ideas such as ending the non-dom tax status, which we welcome, but should have been done years ago”.
He added: “Hard-pressed Cambridge residents and businesses still face much higher levels of taxation under the Conservatives, despite today’s desperate attempts from the Chancellor to pretend otherwise. Instead of short-term fixes designed to try and save Conservative seats, Cambridge needs the long-term stability, investment and reform that Keir Starmer and Rachel Reeves are offering.”
He also delivered a verdict on the Cambridge 2040 plans, after the Chancellor confirmed there would be a long-term settlement for the planned development corporation for the city, which will be tasked with delivering on housing secretary Michael Gove’s vision for “northwards” of 150,000 new homes in the Cambridge region.
Mr Zeichner said: “The ongoing Michael Gove saga continues, with very little new of substance being announced today. What Cambridge needs is not more policy papers, but for the government to genuinely unlock the water resources to allow current planned development to proceed, and access to the wealth Cambridge creates to allow us to build the transport systems we need.”
Life sciences: Bidwells welcomes support for sector - but says investment in transport and planning reform must follow
The government announced that AstraZeneca would be investing £650m, including £200m for its 1,000-person facility adjacent to its £1.1 billion global R&D Discovery Centre (DISC) on Cambridge Biomedical Campus and £450 million at its manufacturing site in Speke, Liverpool for the research, development, and manufacture of vaccines
In his Autumn Statement last year, Jeremy Hunt announced £520million of new funding for life sciences manufacturing. In the Spring Budget, the government confirmed competitions for large-scale transformational investments will open for expressions of interest this summer with a separate competition for medium and smaller sized companies opening in the autumn.
Some £45m for medical charities’ life-saving research was also announced to support the next generation of early career medical researchers, including £3million for Cancer Research UK.
Meanwhile, HMRC will establish an expert advisory panel to support the administration of the R&D tax reliefs and Canary Wharf in London will get £118m for a life sciences hub, commercial and retail floor space, a healthcare diagnostic facility and up to 750 homes.
Mike Derbyshire, the head of planning at Cambridge-based life sciences property consultancy Bidwells, said: “We are glad the government recognises the strategic importance of Cambridge’s life sciences industry to propel economic growth in the country at large.
“AstraZeneca’s £650m investment is evidence of this potential, but it can still deliver so much more in terms of both economic growth and health outcomes. The establishment of a Development Corporation will hopefully deliver a framework through which this can be fully realised.
“This will depend, however, on the government's conviction in regard to its investment in transport infrastructure, its willingness to streamline the planning system to boost lab space availability, and sufficient investment in housing and infrastructure more generally. If these issues are addressed, then investment will flow into the sector on its own accord.”
Cheffins welcomes £10.2m Cambridge investments
The government announced £7.2million to unlock improvements to local transport connections between the Cambridge Biomedical Campus and the city – which will help fund the Cambridge South East Transport (CSET) busway scheme – and £3million more for Cambridge University NHS Trust to support plans for growth.
Philip Woolner, joint managing partner at Cheffins, said: “The further £10.2m investment announced today will provide a welcome boost to the city, continuing to enhance its world-leading medical research and science facilities as well as supporting much-needed transport improvements.
“More detail will be needed to ascertain whether the Future Development Corporation will help to deliver the new homes and lab space earmarked for the City – there are already many layers of local government hierarchy so hopefully this will not add to the complexity.
“When it comes to residential property, the cut in the CGT rate from 28 per cent to 24 per cent is also welcome – any reduction in tax encourages property transactions, helping to maintain a healthy sales market.”
Cambridge University Hospitals chief welcomes £3m
The Chancellor announced £3m for Cambridge University Hospitals to develop its long-term plans for healthcare on the Cambridge Biomedical Campus, although there was no further detail.
Roland Sinker, chief executive of Cambridge University Hospitals NHS Foundation Trust, said: “Today’s budget announcement is great news for Cambridge. The investment will help ensure we can respond to the needs of our existing population as well as developing plans for the longer term, and we look forward to working on this with health and care system partners.
“This investment will also allow us to continue our strong collaboration with life sciences and academic partners to drive economic growth and innovation which will ultimately benefit our local patients, as well as regionally, nationally and internationally.”
National Insurance cut is a “sugar-rush” and long-term impact is “uncertain” says Cambridge Judge economist
Michael Kitson, associate professor in international macroeconomics at Cambridge Judge Business School, said: “The big-ticket item in the Budget, as had been extensively leaked, was a modest cut in National Insurance, in effect a tax cut for most workers.
“Jeremy Hunt’s narrative was that this will encourage more work; but the impact is very uncertain, and even if it is positive, it will be small.
“The cut to National Insurance may give a brief ‘sugar-rush’ stimulus to consumer expenditure and a feel-good factor amongst some of the electorate, but it will do little to rectify the long-term structural problems in the UK.
“As usual, the Chancellor announced a shopping list of initiatives and cherry-picked a few questionable statistics to prop up his Budget, but this window dressing did not adequately address the long-term problems of the British economy.
“First, there is no effective policy to address the stagnation level of productivity in the UK. Productivity is the main driver of real wages, corporate profits and tax revenues in the economy, and it requires investment in productive assets, people and ideas.
“Second, regional imbalances have not been coherently addressed as ‘levelling up’ remains a political slogan with a hotch-potch of chatter rather than a coherent strategy. Third, the Budget failed to address the damage of climate change.”
“It is not a surprise that the Budget is so lacking policies for long-term growth in what will probably be an election year.
“The cuts in National Insurance may persuade some of the electorate to vote Tory but the lack of a long-term vision and investment in the economy is negligent. This lack of vision is not restricted to the Conservatives as the Labour Party are likely to fight the General Election on the issue of competence, and not much more. Of course, competence is important, but it is not sufficient to generate future prosperity.”
Culture secretary Lucy Frazer welcomes support for creative industries
On creative industries, Mr Hunt said the government will provide eligible film studios in England with 40 per cent relief on their gross business rates until 2034.
He also said: “We will introduce a new tax credit for UK independent films with a budget of less than £15million. For our creative industries more broadly, we will provide £26million of funding to our pre-eminent theatre, the National Theatre, to upgrade its stages.”
On recognising the contribution to the creative industries and tourism made by orchestras, museums, galleries and theatres, Mr Hunt said: “In the pandemic we introduced higher 45 per cent and 50 per cent level of tax relief which were due to end in March 2025. It has been a lifeline for performing arts across the country.
“Today in recognition of their vital importance to our national life I can announce I am making those tax reliefs permanent at 45 per cent for touring and orchestral productions and 40 per cent for non-touring productions. Lord Lloyd-Webber says this will be a once in a generation transformational change that will ensure Britain remains the global capital of creativity.”
Lucy Frazer, the culture secretary and Tory MP for South East Cambridgeshire, welcomed the moves.
She said: “Today’s Spring Budget again recognised our world-leading creative industries We’re sticking to our plan for long term economic growth, with £1bn in additional tax relief for our exceptional film, theatres, orchestras and galleries.”
She added: “Creative industries enrich our lives and bind our communities together and for over a decade we’ve been supercharging these industries with jobs, investment and growth.
“Measures announced in today’s Budget will help us go further, and ensure our cultural and creative industries remain the envy of the world with £1billion of new tax reliefs over the next five years.
“As a result of our tax reliefs, Britain has become the birthplace of some of the biggest blockbusters, with film studios from around the world investing millions here, boosting local economies and creating jobs.
“On the stage, our theatre sector rivals Broadway and our world-class orchestras and museums attract millions of overseas visitors each year. I’m delighted that the Chancellor has also made these tax reliefs permanent in the Spring Budget.
“We are also providing additional support for our vital indie film sectors and our innovative special effects firms. And in its sixtieth year, additional funding for ‘the nation’s stage’ at the National Theatre underlines our commitment to opening up access to the arts and bringing more culture to people’s doorsteps.”
Lib Dems bemoan ‘deception’ and ‘empty promise’ on NHS
The Lib Dems’ Parliamentary candidate for South Cambridgeshire, Pippa Heylings, said: "Today, given that they still haven’t called a general election, we needed to see the government get a grip – get a grip on the issues ahead of them. Get a grip on the real issues affecting the people of this country and South Cambridgeshire.
“We saw no indication that money would be invested in vital South Cambs GP or dental services. Instead, we saw them focus on reducing taxes for the most wealthy.
“The so-called rise in NHS spending announced today is barely a reversal of last year’s planned cuts. It is an empty promise that will not save stretched local health services or fix crumbling hospitals. In reality under the Conservatives’ plans, NHS spending will still be £1.7bn less in real terms next year (2024-25) than it was last year. This is yet more desperate deception by the Conservatives.”
Ian Sollom, the party’s St Neots and Mid Cambridgeshire Parliamentary candidate, added: “The Budget shows once again a Conservative Chancellor and government that has little understanding of the everyday struggles of the people and businesses of St Neots & Mid Cambridgeshire.
“Just like his autumn statement, Jeremy Hunt has done nothing to tackle the chronic shortage of GP and dentist appointments we’re living with, and has tried the same trick of giving with one hand while taking much more with another on National Insurance Contributions. He fooled no-one last year and is fooling no-one now.
“Last Saturday, Lib Dem Leader Ed Davey and I spent time in St Neots listening to the real concerns of businesses continuing to struggle everyday with high energy bills and unfair business rates, and customers dealing with a cost-of-living crisis that drags on. Sadly, this Budget shows a Chancellor that can afford to spend £100,000 on his own re-election campaign simply isn’t listening to those concerns.”
And Charlotte Cane, the Lib Dems’ Parliamentary candidate for East Cambridgeshire, said: "People across Ely and East Cambs can’t get an NHS dentist, an appointment with their GP or hospital appointments. They want more funding for the NHS and good quality social care. This budget shows that the Conservatives won’t deliver that funding. Local health services have been left on their knees and that we need an election now.”
Cambridge Ahead welcomes recognition of city’s infrastructure gap
Cambridge Ahead, the business and academic member organisation, said collaboration between local and national was vital to secure the best outcomes for Cambridge.
Dan Thorp, CEO of Cambridge Ahead, said on behalf of the organisation: “The infrastructure gap faced by Cambridge limits the city region’s economic potential, it also threatens the quality of life of its residents. Announcements from government today to help address key water, transport and health aspects of Cambridge’s infrastructure gap are therefore a welcome recognition of the challenges and a first step which must be built upon.
“Today’s announcements follow concerted and determined work from stakeholders across the public and private sector in Cambridge, including Cambridge Ahead, to engage with government to advocate for these priorities.
“As government’s focus on Cambridge now enters its next phase, it remains vital to the long-term impact and success of this initiative that a strong collaboration between national and local is at the heart of the process.
“This collaboration is key to balancing the local and national benefits to be generated by the Cambridge economy. Cambridge Ahead will continue to produce and provide analysis that deepens government understanding of the case for Cambridge, and work with all policymakers to aid their role in developing plans to unlock Cambridge’s full potential.”
This Land CEO says there is ‘modest’ encouragement for the property sector
David Meek, CEO of developer This Land Ltd, said: “Despite it being an election year, UK chancellor Jeremy Hunt’s Spring budget gave little to invigorate the real estate market, although there were a number of measures which point towards some modest encouragement for the property sector.
“He confirmed that the plans for Cambridge’s Development Corporation were moving forward, with ‘over £10million invested in the coming year to unlock delivery of crucial local transport and health infrastructure’ and that its long-term funding would be addressed at the next Spending Review.
“Any lowering of capital gains tax for residential property sales is welcome and the cut in the higher rate from 28 per cent to 24 per cent, whilst only impacting those with second homes, may encourage more properties onto the secondary market and help supply shortages. The realignment of the tax treatment for furnished holiday rentals with those of longer term assure-hold tenancies may also ease the pressure in particular hot spots. However, strong pre budget rumours of 99 per cent mortgages and/or reductions in stamp duty for first time buyers proved to be unfounded.
“It was notable that the government announced match funding £3million of industry-led programmes for planning capacity in the next Spending Review. This compliments the Competition and Markets Authority report published on 26 February 2024, proposing reforms for the planning systems.
“Overall, the various measures announced may help supply on the margin, but importantly should continue to give further stability and confidence to the sector after a challenging couple of years.”
