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Julian Sturdy - Strong Voice for York Outer

Julian Sturdy

Member of Parliament for York Outer

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York Press column – Government must deliver on growth to maintain trust

York Press column – Government must deliver on growth to maintain trust

There is no point pretending last week’s heavy by-election losses do not send a serious message to the government. Defeated in both a traditionally very ‘safe’ rural West Country seat and urban West Yorkshire, my party is clearly struggling to retain public confidence across a diverse swathe of communities. My thoughts on how our leadership

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York Press column – Action on Education

Every child deserves a first-class education to equip them with the skills to pursue...

Julian welcomes Budget for York’s recovery

March 3, 2021

I warmly welcome the comprehensive extension of emergency covid jobs and business support, but this must not detract from the urgent need to safely return to normal trading conditions, facilitated by successful vaccination. It is a relief predictions of peak unemployment of nearly 12% have been revised to 6.5%, giving hope of a solid recovery.

Given 30,000 York residents have been supported by furlough and self-employment support, I am very glad these schemes have been extended until September. I am pleased that 600,000 more people are now eligible for self-employed support, through filing a 2019-20 tax return, and that the emergency Universal Credit uplift of £20 per week has been retained for a further 6 months, something I have pressed Ministers on privately.

Having recently lobbied government to extend support for  worst-affected sectors, like York’s large hospitality and tourism industry, I am relieved by the Chancellor’s extension of the special 5% VAT rate for hospitality and tourism until the end of September, and ongoing special 12.5% cut rate for a further 6 months after, alongside a lengthened 100% business rates holiday for retail, leisure and hospitality until June, and an additional two-thirds rates discount for 9 months thereafter. However, I would have liked some measures to address the unfair difference in business rates liability between high street and online retailers, and will look to take this up with Rishi Sunak. I also expect the £300 million more for the Culture Recovery Fund to further support local institutions like York Theatre Royal and Elvington’s Yorkshire Air Museum, that have benefited so far from this.

I know the Chancellor’s new restart grants will also be very helpful for many battered York enterprises as they reopen, with up to £6000 for non-essential retail, and up to £18,000 for personal care, leisure and hospitality, as they will likely open later or with more restrictions. But to survive local businesses fundamentally need normal trading conditions, not extended subsidies to stay closed or below capacity, and the overall Budget is only affordable if ‘normal’ is not much further delayed.

As a parent, the impact on younger generations has been a huge concern of mine, so I am glad there were substantial measures to guard against youth unemployment, especially the doubling of incentive payments to small businesses to take on apprentices of any age to £3,000. The issue of young people in more expensive areas like York kept off the housing ladder by enormous deposit requirements was also addressed head-on, with new government-backed mortgages requiring just 5% deposits.

I was also reassured to see the Rishi Sunak putting his money where his mouth is on Northern ‘levelling-up’ commitments by announcing two new ‘free ports’ on Humberside and Teeside, special business-friendly zones with cheaper customs, lower taxes and simpler planning to attract trade, investment and new jobs. The job-creating relocation of part of the Treasury and other government departments to Darlington, and creation of a new UK Infrastructure Bank in Leeds to finance economic growth for the region are encouraging signs Ministers will make good on their promises.

Fundamentally, the economic growth and jobs that will allow recovery from covid and pay for our public services depend on businesses investing in technology and their workforce, which is why I welcome the Chancellor’s ‘Super Deduction’ of 130% of taxable profits on investment. At a stroke this lifts the UK from 30th to 1st place in terms of how encouraging our tax regime is for job-creating investment, boosting this by 9%.

However, I have some questions about whether it is right to fund this sensible move by hiking corporation tax to 25%, which could make the UK less attractive to job-creators, although I am reassured this will only affect the largest firms. I also accept that given the appalling economic impact of covid, money has to be found somewhere, which is also why after an increase this year, income tax thresholds sadly will be frozen until 2026.

Besides vaccine-induced optimism, we also need to be realistic that even in 5 years time,  as a nation we will still be 3% poorer because of the pandemic, and are borrowing £355 billion this year alone. Any increase in the interest costs of servicing this debt could be dangerous, and this has already doubled in the last month, so the government have to take prudent measures like the above to reduce our vulnerability to rises in the cost of borrowing.