Co-op Party says more clarity is needed on growth after Hunt budget

'We got little in terms of commitments, little in terms of clarity, little in terms of confidence, and fundamentally little for our sector'

Chancellor Jeremy Hunt unveiled his autumn statement to the House of Commons last week, after a turbulent period for the government marked by the fiasco over Kwasi Kwarteng’s financial statement and the departure of Liz Truss. 

Hunt is attempting to correct the government’s course under new PM Rishi Sunak but his statement met a critical reception in the press.

The Co-op Party was also sceptical. It said the budget “could have been an opportunity to address the inequalities we face in our economy. However, for communities, businesses and co-operatives across the country, the chancellor’s promise of growth is still unclear and uncertain”. 

The chancellor announced a raft of measures including an increased in the minimum wage, state pensions and means-tested and disability benefits.

Apart from in Scotland, top 45% additional rate of income tax will be paid on earnings over £125,140, instead of £150,000. Thresholds on income tax National Insurance and inheritance tax have all been frozen for further two years, until 2028. Tax-free allowances for dividend and capital gains tax also due to be cut next year and in 2024.

Local councils in England will be able to raise council tax by up to 5% a year.

The Co-op Party’s communications assistant Georgia Horsfall welcomed new funding for retrofitting and other energy efficiency initiatives, but criticised its start date of 2025. “This means families struggling to pay their bills now will not feel the benefits of this policy for another two years. We also heard the Energy Price Guarantee will be going up to £3,000 from April – even more evidence that we should have an energy sector owned and controlled by us.”

With regard to community energy, the Party also wants to see more clarity in Hunt’s to introduce a windfall tax on energy generators. 

“While the windfall tax will only apply to schemes larger than 100GWh per annum, which means that small community energy projects will not be afected, it is important that the principal difference is recognised between community-owned projects, where profits are reinvested in the community, and for-profit schemes,” said Horsfall. “Recently Co-operative parliamentarians pressed for immediate action to safeguard the contribution made by community and co-operatively owned energy initiatives and include exemptions for our sector in the Energy Prices Bill. 

“The government must go further than simply verbally committing and ensure this is enshrined into law.”

The Party welcomed increases to benefits but called for the value of Healthy Start vouchers to be raised in line with soaring inflation. And Horsfall said more attention should have been paid to challenges in the childcare sector. “to address the cost of childcare forcing many, mostly women, to stay at home to look after childcare .

She also criticised Hunt’s failure to reverse the 2020 government cut to the international development budget. “Co-op Party members has applied pressure in all forms to hold the government to its commitment on international development. The announcement to not restore overseas aid spending to 0.7% of GDP for another five years is a huge blow to those countries who need it most.”

She added: “We got little in terms of commitments, little in terms of clarity, little in terms of confidence, and fundamentally little for our sector. The Co-op Party will continue to campaign for action which delivers a fairer, greener and more prosperous Britain for all.”

There was also criticism from Tony Armstrong, CEO of Locality, the national network for community organisations.

He said: “For community organisations on the front line, there is little here to change the reality on the ground right now. Charities and local groups have been working tirelessly to support their communities with food banks, warm spaces and money advice – all while their own costs continue to skyrocket. 

“Uprating benefits in line with inflation and continuing the emergency Household Support Fund will provide important help for those who need it most. But to ensure people can continue to access vital local support, the government should extend energy bill relief for community organisations after April, and prioritise them in the welcome drive for energy efficiency. We need our front line local organisations now more than ever, not just to get people through this crisis, but also to build a hopeful future.”

Ailbhe McNabola, director of policy and communications at community business body Power to Change, said: “With the UK now facing a recession, we know that communities – and the community businesses that serve them – will see an increased demand on services which are already under strain. Continued pressures on public services will further exacerbate this. Community businesses will continue to provide vital support in their places through the challenges of a recession and can support those furthest from the labour market to build their skills and employability … but they need certainty and support from the government to ensure places not only survive but thrive during the current crisis.”

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