The Budget is always an exercise in managing both the economic needs of the country with the wider political landscape. Today’s statement from the Chancellor was no exception. While the national headlines will focus on tax announcements, for businesses here in the East of England the question is whether the government can lay the foundations for long term economic growth whilst tackling the immediate pressures they are facing.

Infrastructure investment

From an economic perspective, the East of England has secured some vital continuity. The Budget confirmed the government’s commitment to the Lower Thames Crossing with an investment of just under £900 million to complete the works. The continued backing of Sizewell C is also a vote of confidence in our region’s role in delivering the UK’s future energy needs, whilst bringing thousands of jobs and opportunities to the area.

Support for East West Rail continues and the government is accelerating progress on the Oxford to Cambridge Growth Corridor. All of these projects are essential for unlocking regional productivity, whilst improvements in local infrastructure will help overcome the long dreaded bottlenecks we see in key parts of the region which stifle growth.

Tackling the skills shortage

One of the biggest challenges facing the East of England is the skills shortage, which is amongst the highest of any parts of the UK. To address this, the Chancellor announced over £1.5 billion will be made available across the Youth Guarantee Scheme and the Growth and Skills Levy. This will help tackle the high number of people not currently in education, employment or training. Getting more people into work, and upskilling the existing workforce, will be key to delivering the above mentioned projects and driving regional productivity.

Alongside this the Prime Minister was in fact in the East of England earlier this week with the Education Secretary, visiting a local school to highlight the expansion of free school meals to tackle child poverty and to ‘give every child the best possible start in life’. The government argues this is crucial in the long term, not just morally but to give young people the stable foundations they need before they enter the workforce.

Minimum wage rising

The government announced increases in the minimum wage to help people struggling in the cost of living crisis. At the same time, this will add costs to businesses, particularly in the region’s hospitality sector, but Labour is counting on a resulting increase in productivity and a reduction in welfare costs to help balance the books.

Metro Mayors in England will also be given powers to introduce so called ‘tourist taxes’ for visitors. The locations that will have the powers for these taxes have not yet been confirmed. MPs in the region are working hard to promote the East of England as a destination, so if the proposed areas do include the East of England then a careful balance will need to be struck between increasing local funding and not hindering this ambition.

The political context

But we can’t just look at these economic decisions in a vacuum. They are being made against a backdrop of significant political volatility and uncertainty, nowhere more so than in our own region.

Whilst at the last election Labour secured a landmark majority, a lot has changed in the past eighteen months. Exclusive polling by PLMR with Electoral Calculus highlights why delivery is now so critical for this government. Our latest analysis shows that, if an election were held tomorrow, Reform UK is projected to win almost every seat across the East of England. If that result was replicated across the country they would be able to form a majority government in Westminster.

However, despite all the political excitement in the media, an election is not due until 2029. Labour will be well aware that, following this Budget, they have to deliver. Voters in the East of England need to feel they have more money in their pockets, with food prices and bills coming down. If they don’t, Labour will face a very difficult election result in four years’ time.

These Budget announcements are just the start. The government now needs to show it can deliver.