The proposals in the UK Government’s Back to Work Plan contain a confusing mixture of devolved and reserved responsibilities, which leave us slightly mystified as to exactly how this is all going to work in practice (writes Fraser of Allander Institute’s MAIRI SPOWAGE):
In his speech, the Chancellor said: “… last week I announced our Back to Work Plan. We will reform the Fit Note process so that treatment rather than time off work becomes the default.
“We will reform the Work Capability Assessment to reflect greater flexibility and availability of home working after the pandemic. And we will spend £1.3 billion over the next five years to help nearly 700,000 people with health conditions find jobs.
“Over 180,000 more people will be helped through the Universal Support Programme and nearly 500,000 more people will be offered treatment for mental health conditions and employment support.
“Over the forecast period, the OBR judge these measures will more than halve the net flow of people who are signed off work with no work search requirements. At the same time, we will provide a further £1.3 billion of funding to offer extra help to the 300,000 people who have been unemployed for over a year without having sickness or a disability.
“But we will ask for something in return. If after 18 months of intensive support jobseekers have not found a job, we will roll out a programme requiring them to take part in a mandatory work placement to increase their skills and improve their employability. And if they choose not to engage with the work search process for six months, we will close their case and stop their benefits.”
These changes have the potential to impact recipients of Universal Credit. The complication is that UC is reserved, while many elements of employment support – the “extra help” that the Chancellor talks about – is, on the whole, devolved.
Because of this, many of the support mechanisms to help people avoid sanctions in England (& Wales in most cases) generated Barnett consequentials, including:
Restart: expand eligibility and extend the scheme for two years
Mandatory Work Placements: phased rollout
Universal Support: increase to 100,000 starts per year
Talking Therapies: expand access and increase provision
Individual Placement and Support (IPS): expand access
Sanctions: closing claims for disengaged claimants & end of scheme review
Fit Note Reform trial
So, in summary, it looks like the sanctions could be applied in a reserved benefit, following support that may or may not be provided by the Scottish devolved employability system as the Scottish Government could choose to spend the money on something else.
We wait for more details from both the UK & Scottish Governments about how this is going to work in practice.
• The real pay crisis is intensified and now expected to last 20 years. • The politically charged National Insurance cut makes the smallest dent in the worse squeeze on household incomes since the 1950s. • While the Chancellor has enjoyed higher revenues, he has chosen to play austerity politics rather than back public services on the brink – £20 billion has been taken from public services to fund the meagre tax cut. • An ‘Autumn Budget for growth’ has meant the reduced growth in almost every year of the forecast. • ‘Full expensing’ of capital expenditure is a seriously inefficient way to boost the economy. • In spite of all the claims to the contrary, the Tories are still presiding over worst deterioration in public finances for more than 100 years.
Real wage and household disposable income crisis unended
The forecasts published alongside the statement by the Office for Budget Responsibility (OBR) contained alarming news on real wages. According to the OBR forecasts, real wages are now not set to return to 2008 levels until 2028. The current pay squeeze will hit two decades.
This is a significant downgrade on the March forecast, when wages were returning to 2008 levels by 2026 – two years sooner than it now expects.
The forecast for broader living standards (as measured by real household disposable income per person) remains dire. After already declining in both the 2020/21 and 2022/23 financial years, further falls are expected over the next two.
While in fact a less bad forecast than March, the OBR stress that living standards “are forecast to be 3½ per cent lower in 2024-25 than their pre-pandemic level … this … represents the largest reduction in real living standards since ONS [Office for National Statistics] records began in the 1950s”.
The OBR also put into perspective the 2 per cent cut in National Insurance, reckoning it will boost living standards by around 0.5 per cent at the end of the forecast. This is a minor dent in an immense collapse, and of course as everybody has pointed out only reverses in a small way tax increases at past statements – even on their own terms the government are failing.
Minimum wage
Specifically for those on the minimum wage, the Chancellor has accepted the recommendations of the Low Pay Commission (LPC). This takes the wage floor to £11.44 an hour and extends coverage to everyone aged 21+. This is badly needed and follows pressure from unions and low-pay campaigners. But with prices sky high, and the OBR increasing its inflation forecasts, the minimum wage must be raised to £15 as soon as possible, and extended to all adult workers.
The Low Pay Commission’s recommendations take the minimum wage to 66% of median wages. This is an internationally recognised measure of relative low pay. However, the Chancellor’s claims that he has eliminated low pay should be taken with a pinch of salt. This is a measure of pay distribution which looks at how close low-paid workers are to the median worker. The floor has risen since 2010 but the middle has had no real pay rise over 13 years. The bottom has been catching up, in part, because wages are stagnant for everyone else. The government should set the LPC’s next minimum wage target at 75% of median wages, and this should be delivered alongside a plan for real wage growth for all workers.
Unemployment rise
The OBR has also predicted that unemployment will steadily rise from now until midway through 2025, estimating there will be 275,000 more people in unemployment than at the start of this year. At no point in the OBR forecasts do they predict unemployment will fall below the level at the start of the year.
It is unfair to put it mildly to penalise individuals for an economic climate which is out of their control. The Chancellor decided to support compulsory work placements, but analysis show this punitive policy does not result in an improved employment outcome.
Skills
The Government plans focus largely on reforms coming in for 16-18 year olds, overlooking the skills gap faced by those already in the labour market. On apprenticeships £50m for a 2-year pilot widely misses the mark. In 2021/22, there were approximately 349,200 apprenticeship starts in England – a 31% decline from the pre-Apprenticeship Levy figures of 509,400 starts in 2015/16 (Source: CIPD). The funds are largely directed at male-dominated sectors, according to the Women’s Budget Group. Other measures are recycled and/or small – though the increase to the pitifully low apprenticeship minimum wage is be welcomed.
Little has been done to reverse cuts to adult and further education budgets since 2010, with spending still significantly below where it was when the government took office. Celebrating an uptick in Level 4 apprenticeships just repeats the ‘virtuous cycle’ where those with the highest levels of qualification receive the most investment in their training. Graduates get most of the training as working adults, and almost half of adults from the lowest socio-economic group receive no training at all after leaving school.
Social security
It is a low bar for this Government when they boast that benefits are being uprated in line with September’s rate of inflation, which is standard practice. Though they have severed the link between inflation and the uprating of benefits numerous times since 2010 – which has slashed vital financial support for families.
And while the Local Housing Allowance has been restored to the 30th percentile after it was last frozen in 2020, it will be frozen again and support reduced for ever-increasing rental prices.
There were also significant cuts to benefit entitlements for some people with long term health conditions. They are expected to lose £400 a month compared to current system, and face the threat of sanctions to enter employment.
The rate at which prices are increasing may have slowed, but families are still struggling with the essentials. Over the last two years the cost of energy has increased by 49 percent while food prices have increased by 28 percent.
Energy prices
And energy bills are a glaring omission from this Autumn Statement.
Household energy bills remain 50% higher than they were in the winter of 2021-2022 (approximately £600 higher for an average household). This means that an estimated 6.3 million households are in fuel poverty (spending more than 10% of their income on energy), and more than 1 million households are in extreme fuel poverty (spending 20% or more of their income on energy). (Estimate by Friends of the Earth and National Energy Action as government data are not yet available.)
Energy prices are expected to remain high or increase. Ofgem today raised the domestic energy price cap by 5%, based on wholesale price volatility.
Many employers will also struggle with rising and volatile energy bills. The UK consistently has some of the highest electricity prices for business in Europe, affecting the ability of UK manufacturers to compete internationally. Unions representing manufacturing workers have consistently campaigned alongside employer bodies for measures to rein in excessive and volatile wholesale energy prices – but these issues seem to be far from the list of priorities of the current Government.
Public services and public finances crises continue
As the OBR gently warn, “it is worth dwelling for a moment on something the Chancellor didn’t announce in his Autumn Statement – which is any major change to departmental spending plans despite significantly higher inflation”.
The government has added “just” £5 billion a year in cash terms to departmental budgets, and this means that “the real spending power of these budgets is eroded by around £19 billion” relative to the previous forecast (as on their chart below).
In 2023-24 the increased budget is allocated for public sector pay increases (£3.9 billion for the NHS in 2023-24, and £0.4 and £1.4 billion for other departments in 2023-24 and 2024-25, respectively). Overall, the OBR have departmental spending growing by 0.9 per cent a year in real terms, down from 1.1 per cent at the March Budget.
Given the government’s political priorities on spending, the OBR stress that unprotected departmental spending is projected to fall by between 2.3 and 4.1 per cent a year in real terms from 2025-26. They wryly observe this (austerity) would “present challenges” and cite the Institute for Government’s recent report finding that “performance in eight out of nine major public services has declined since 2010”. Plainly there is no intention to resolve the crisis in public services and public service recruitment. And ultimately
The public finances overall
For the public finances as a whole, the government has enjoyed a momentary windfall – with less bad than expected growth outturn and higher inflation meaning tax gains (especially with tax thresholds not being uprated) outweighing higher interest and other costs. This has been spent on the NI cut and expensing.
But the Chancellor has made hollow boasts about the improved condition of the public finances. The overall management of the economy for 13 years has meant a disastrous failure for them. Immediately less bad GDP outcomes (next section) have meant marginally improved ratios for this statement. But overall the Conservatives have presided over a huge increase in debt from 65 per cent of GDP in 2009-10 to 98 per cent of GDP in the current financial year. This is an unprecedented deterioration relative to all economic cycles for more than a century.
Growth crisis unended
At the end of his speech the chancellor proclaimed an “Autumn Statement for Growth”. But nothing announced yesterday changed the bottom line. While the forecasts reflected ONS revisions to GDP data and a less bad than expected 2022, growth over the next two years is revised steeply down. And on a medium term view the OBR warn:
“we have revised DOWN our estimate of the medium-term potential GROWTH rate of the economy to 1.6 per cent, from 1.8 per cent in March” (our emphasis)
Of the onslaught in policy measures, the most prominent was making permanent the full expensing of business capital investment. The Chancellor chose to disregard OBR analysis showing both precursor measures (the super-deduction and temporary full expensing in the March 2021 and March 2023 Budgets) had a lower impact on investment levels than predicted (see OBR, Economic and Fiscal Outlook, November 2023, pp 33 – 34).
Introducing full expensing is forecast by the OBR to lead to an increase in business investment of £14 billion between now and 2028-29 and to cost £29.5 bn over the same period. This would appear then to be an extremely inefficient means of increasing business investment, reflecting huge ‘deadweight’ effects, whereby businesses gain generous tax relief on investment that would (likely) have taken place anyway.
The OBR estimates that the measure will raise the capital stock by 0.2 per cent by 2028-29 – a positive, but small, and very costly impact.
Pension saving
The chancellor also had high hopes for the role workers’ £2.5tn of pension savings could play in boosting our flagging economy. But while there were some welcome steps such as setting up a new growth fund through the British Business Bank the plans rely mostly on merging pension schemes in ways that are unlikely to be in the interests of their members, and leaning on funds to put more money into global private equity. These measures were also over shadowed by a poorly thought through proposal to upend the workplace pension system. See our fuller commentary here.
Industrial strategy?
As the Chancellor noted, the lack of long-term certainty over policy decisions (including industrial strategy, taxes, and climate commitments) is a drawback to business decisions to invest. But there was no reassurance in the Autumn Statement that the Government would provide that certainty. While reannouncements of investment commitments to support the automotive, advanced manufacturing, and energy sectors – amounting to £4.5 billion are welcome, this represents only a small proportion of the investment requirements of the Biden-style industrial strategy that the UK needs.
Ending the failure
The failure – as Labour have repeatedly identified – is still a failure of growth. The government need to invest in a stronger economy where growth and fairness go hand in hand, where decent pay means workers spend and businesses produce to meet that spending. A virtuous cycle comes when businesses invest in the face of expansion and optimism, and stronger public services re-enforce the upward dynamic. Fairer and sustainable growth will then support the public finances.
Yet the government continues to take us in the wrong direction. Yesterday’s Autumn Statement showed more strongly than ever why it is time for a change.
Autumn Statement ‘ushers in new era of welfare reform’
A ‘bold new vision for welfare’ backed by nearly £30 billion has been set out by Work and Pensions Secretary Mel Stride
Millions of people will benefit from next generation of welfare reforms and extra support for those most in need, announced at Autumn Statement
Benefits increased by 6.7% and pensions by 8.5%, maintaining commitment to seeing the country through cost of living pressures
DWP Secretary Mel Stride heralds new era offering a “brighter future for millions”
The plans offer unprecedented employment and health support to help over a million people, while protecting those in most need from cost of living pressures – including raising pensions and benefits and increasing help with housing costs.
Long term decisions to provide unprecedented help for people to move off welfare and into work were at the heart of the Government’s plan for growth set out at the Autumn Statement.
While unemployment has been almost halved since 2010, the £2.5bn Back to Work plan will help thousands of people with disabilities, long-term health conditions and the long-term unemployed, to move into jobs. This comes alongside new guarantees for those on the highest tier of health benefits around keeping benefit support to cushion those who try work.
The transformative employment programme comes as the Government continues to protect the most vulnerable, delivering a Triple Lock-protected boost for pensioners and raising benefits in line with inflation next year, worth £20bn taken together.
The changes mean the full rate of the new State Pension will go up by £17.35 per week, while families on Universal Credit will be on average £470 better off next year.
Around 1.6 million households will also benefit from an increase to the Local Housing Allowance – and will be around £800 a year better off on average. Worth more than £7bn over five years, this commitment will support low-income families in the private rented sector with rent costs and help prevent homelessness.
Secretary of State for Work and Pensions, Mel Stride MP said: “Work changes lives. With the next generation of welfare reforms, we will help thousands of people to realise their aspirations and move off benefits into work, while continuing to support the most in need.
“We are taking long term decisions that will build a brighter future for millions, offering unprecedented support to open up opportunity and grow the economy, building on our record that has seen almost four million more people in work since 2010.
“Our reforms will remove the barriers to work that we know some people still face, while we’re boosting benefits and pensions to help with cost of living pressures.”
Welfare reforms announced at the Autumn Statement include:
Uprating working age benefits in line with September’s CPI index figure of 6.7%.
Uprating state pensions in line with September’s earnings figure of 8.5%.
Increasing the Local Housing Allowance to cover the 30TH percentile – worth an average of £830 per year.
Expanded jobcentre support including intensive help for those on Universal Credit
Introducing the Chance to Work Guarantee, which will tear down barriers to work for millions of claimants to try work with no fear of reassessment or losing their health benefit top-ups.
Increasing mental health support for jobseekers by expanding NHS Talking Therapies treatment and the Individual Placement and Support programme, supporting almost 500,000 over five years.
Matching 100,000 people per year with existing vacancies and supporting them in that role through Universal Support.
Rolling out WorkWell to support people at risk of falling into long-term unemployment due to sickness or disability.
Reforming the Work Capability Assessment for new health benefit claimants to better reflect the opportunities available in the modern world of work.
Stricter sanctions for people who should be looking for work but aren’t engaging with jobcentre support.
Building on the Mansion House reforms with further steps to improve private pension returns and grow the economy.
Introducing new Government powers to request data from organisations such as banks when accounts are showing signals of fraud and error.
The Government’s ‘radical new plan’ will stem the flow people falling out of work and onto inactivity benefits due to physical or mental health problems, as it takes the long-term decisions to help people realise their dreams to find a job and build a better life.
With this unprecedented level of employment support comes tougher enforcement of sanctions for fit and able people who should be looking for work but aren’t.
Work coaches will use tools to track people’s attendance at jobs fairs and interviews, and close benefit claims of those able to work who have been sanctioned and no longer receiving money after six months.
Taken together, the package will make sure those who are vulnerable or on the lowest incomes are protected, with intensive support to get them back into work, while ensuring fairness to the taxpayer.
Biggest ever increase to the National Living Wage, worth over £1,800 a year for a full-time worker, fulfils manifesto pledge to end low pay.
Since 2010 the National Living Wage will have doubled in cash terms from around £10,500 to nearly £21,000 a year for a full-time worker.
For the first time, 21-year-olds on the National Living Wage will always earn two-thirds of average earnings.
The Chancellor will deliver a pay rise of more than £1,800 a year for a full-time worker, as he confirms that the National Living Wage will increase by over a pound an hour from April.
The almost 10% pay boost, from £10.42 to £11.44 an hour, is the biggest cash increase in the National Living Wage in more than a decade and fulfils the government’s manifesto pledge to end low pay for those on the National Living Wage.
Eligibility for the National Living Wage will also be extended by reducing the age threshold to 21-year-olds for the first time. A 21-year-old will get a 12.4% increase, from £10.18 this year to £11.44 next year, worth almost £2,300 a year for a full-time worker.
National Minimum wage rates for younger workers will also increase. 18-20-year-olds will also get a wage boost to £8.60 per hour – a rise of £1.11.
The Department for Business and Trade estimate 2.7 million workers will directly benefit from the 2024 National Living Wage increase.
Chancellor of the Exchequer Jeremy Hunt said: “Next April all full-time workers on the National Living Wage will get a pay rise of over £1,800 a year. That will end low pay in this country, delivering on our manifesto promise.
“The National Living Wage has helped halve the number of people on low pay since 2010, making sure work always pays.”
The minimum hourly wage for an apprentice is boosted next year, with an 18-year-old apprentice in an industry like construction seeing their minimum hourly pay increase by over 20%, going from £5.28 to £6.40 an hour.
The National Living Wage was introduced in 2016 and currently sets the minimum hourly pay a person over the age of 23 earns when working. The new rate will now apply to 21- and 22-year-olds, and means that the government has met its ambitious target of lifting the National Living Wage to two-thirds of median earnings by 2024, ending low hourly pay for those on the National Living Wage.
Since 2010, the proportion of workers on low hourly pay has more than halved from 21.3% to 8.9%, supported by increases to the National Living Wage. Personal tax thresholds have been doubled, meaning a working person can now earn £1,000 a month tax-free for the first time.
Bryan Sanderson, Low Pay Commission Chair, said: “The National Living Wage has delivered an improved standard of living to thousands of people who care for our children and elderly, work in farms and shops and at many other essential jobs.
“These efforts over the lifetime of the NLW mean over £9,000 p.a. more to a full time worker without any increase in unemployment.
“This hasn’t been easy for employers, with the economy facing a range of unprecedented challenges in recent years. The high degree of political and economic uncertainty has made assessing and forecasting the performance of the economy, and therefore our task, very difficult. It is a tribute to my fellow Commissioners that we have continued to achieve consensus.
“Our new recommendation of a National Living Wage of £11.44 attempts to steer a path through this uncertainty and achieve the government target of two-thirds of the median wage, an outcome which if accepted would position the U.K. at the forefront of comparable economies.”
Getting more people into work and ensuring work pays is ‘a priority for the UK government’. The Chancellor will set out further measures in today’s Autumn Statement.
DFM calls for Autumn Statement funding to support key missions
The Chancellor’s Autumn Statement must deliver more funding for public services, net zero and cost of living support instead of cutting taxes, Deputy First Minister Shona Robison has urged.
Ahead of the Scottish Budget next month, the Deputy First Minister called for the Chancellor to provide a funding settlement to support the Scottish Government’s key missions of equality, opportunity and community.
Ms Robison, who is also Finance Secretary, is urging the Chancellor to:
increase the Scottish Government’s capital budget in line with inflation to help deliver vital infrastructure
deliver additional funding across the UK to fund public services and fair public sector pay awards
commit to increasing working-age benefits in line with inflation next year
legislate for an essentials guarantee giving basic necessities to those who need them most
prioritise investment in net zero, including funding for offshore wind projects in Scotland
The Deputy First Minister said: “The UK faces a combination of low growth and high interest rates. The Autumn Statement must learn the lessons from last year’s ‘mini budget’ – it must not compound these problems with ill-timed tax breaks which would place even greater pressure on the public finances.
“The Scottish Government is using the levers available to us to support people through this difficult time. However, it is important that the UK Government uses its full range of reserved powers to address these challenges. With many families continuing to struggle with the cost of living, the Chancellor must not use this statement to cut benefits.
“The Autumn Statement provides an important opportunity for the UK Government to support us to deliver the investment and services that Scotland needs, to demonstrate its commitment to net zero, and to help people and businesses with the economic challenges they face.”
Aye, I’m sure Jeremy Hunt will be hanging on to her every word! -Ed.
£4.5 billion for strategic manufacturing sectors including £960 million earmarked for clean energy
Funding will be delivered to eight sectors key to economic growth, energy security, and levelling-up
Part of wider Government support to ensure UK is the best place to start, grow, and invest in manufacturing
The Government has announced £4.5 billion in funding for British manufacturing to increase investment in eight sectors across the UK. The funding will be available from 2025 for five years, providing industry with longer term certainty about their investments.
Over £2 billion has been earmarked for the automotive industry and £975 million for aerospace, supporting the manufacturing, supply chain and development of zero emission vehicles, and investment in energy efficient and zero-carbon aircraft equipment.
Alongside this, the government has committed to £960 million for a Green Industries Growth Accelerator to support clean energy manufacturing, and £520 million for life sciences manufacturing to build resilience for future health emergencies and capitalise on the UK’s world-leading research and development.
With the entire manufacturing sector making up over 43% of all UK exports and employing around 2.6 million people, this funding is targeted at the UK’s strongest, world leading sectors; including where the industry is undergoing fundamental changes to remain at the forefront of the global transition to net zero, like the move to zero emission vehicles in the automotive industry.
The Green Industries Growth Accelerator investment will support the expansion of strong, home-grown, clean energy supply chains across the UK, including carbon capture, utilisation and storage, electricity networks, hydrogen, nuclear and offshore wind. This will enable the UK to seize growth opportunities through the transition to net zero, building on our world-leading decarbonisation track record and strong deployment offer.
The funding forms part of the Prime Minister’s pledge to grow the economy, and his focus on making decisions for the long-term, ensuring the fund doesn’t just focus on the most successful sectors today but looks ahead to how we keep pace internationally and build the UK’s expertise for the industries of the future.
Together with our existing manufacturing support and plans for net zero transition, this package will help unlock private investment, provide certainty to investors, boost energy security, and protect and create jobs. This approach has already mobilised £198 billion in public and private investment in low carbon energy deployment since 2010.
Today’s announcement comes ahead of the second Global Investment Summit later this month, which will showcase innovative companies from across the UK, with significant investment opportunities in sectors such as technology, sustainability, life sciences, advanced manufacturing, and creative industries.
It will also help ensure that the UK remains at the forefront of the global transition to net zero and can seize growth opportunities in the new green economy. The UK remains a world-leader in cutting emissions, having decarbonised faster than any G7 country since 1990 and set out clear plans to meet all our climate targets and deliver energy security.
Chancellor of the Exchequer, Jeremy Hunt, said: “Britain is now the 8th largest manufacturer in the world, recently overtaking France. To build on this success, we are targeting funding to support the sectors where the UK is or could be world-leading.
“Our £4.5 billion of funding will leverage many times that from the private sector, and in turn will grow our economy, create more skilled, higher-paid jobs in new industries that will be built to last.”
Business and Trade Secretary Kemi Badenoch said: “The UK is a global hub for advanced manufacturing, with world-leading automotive, aerospace and maritime sectors.
“This package builds on recent investment wins, such as the £4bn gigafactory, and the £600m invested to build the next generation of electric Minis, and ensures that the government can continue to help create jobs, grow the economy, and secure the future of great British manufacturing.”
Energy Security and Net Zero Secretary Claire Coutinho said: “Today we are announcing nearly £1bn to back our green industries.
“While we’ve already attracted £200bn in low carbon investment since 2010, with another £100bn expected by 2030, this will unlock even more. We have long been energy pioneers in advanced manufacturing, and this will allow us to carry on that great British tradition.”
The Government has also published its response to Professor Dame Angela McLean’s review of the role that regulation and standards can play in driving innovation and growth in advanced manufacturing.
The Government accepts all 14 recommendations in the industry expert-backed report which builds on the UK’s role as a global leader in setting industrial standards and sets out how, with the right regulations, advanced manufacturing processes can enhance safety and support the drive to net zero and a more sustainable economy.
Among the recommendations accepted is to accelerate the deployment of digital twins, which enables companies to create accurate digital replicas of the full manufacturing process. Used across a range of sectors, digital twins have seen significant uptake in the automotive sector including car production where they offer a transformative approach to product development, manufacturing and maintenance, helping firms test how to fix problems or make processes more efficient.
To boost growth in small and medium sized manufacturing businesses more widely, it has also been announced today that the Government will expand the Made Smarter Adoption programme to all English regions in 2025 before working with the Devolved Administrations to explore making the programme UK-wide from 2026/7.
The programme helps small and medium sized manufacturing companies to use advanced digital technologies which can reduce carbon emissions and drive-up productivity, and its expansion will also involve inclusion of digital internships.
Stephen Phipson, CEO of Make UK, the manufacturers’ organisation said: “Make UK has long campaigned for Made Smarter to be a fully national scheme so that all SME manufacturers can benefit from the expertise the programme delivers and we are delighted at today’s decision from Government to commit to a national rollout.
“Made Smarter has already transformed thousands of companies in the North East, North West, West Midlands and Yorkshire & the Humber and now it can help turbo-charge industrial digitalisation in SMEs across the whole of the country.
“The end-to-end specialist support the programme delivers has successfully helped smaller businesses dramatically boost productivity, improve energy efficiency, drive growth, upskill roles and deliver new jobs in digital skills to create workforces of the future which will allow Britain’s smaller manufacturers to continue to grow and remain globally competitive.”
Additionally, the Government yesterday committed to extend the Connected and Automated Mobility Research and Development programme with up to £150 million of funding between 2025/6 and 2029/30. This will help the UK secure first-mover advantage in the deployment of self-driving vehicles and services.
The UK’s first Battery Strategy is also expected to be published next week, which will outline the Government’s activity to achieve a globally competitive battery supply chain in the UK by 2030 that supports economic prosperity and the Net Zero transition.
They have also set out their plan to launch a Hydrogen industry taskforce, delivered in partnership with the Hydrogen Innovation Initiative and Innovate UK, supporting our ambition to maximise investment opportunities for UK manufacturing of hydrogen propulsion systems.
The Government will set out more about its offer to the manufacturing sector next week with the publication of the Advanced Manufacturing Plan.
Manufacturing stakeholders react to the £4.5 billion in funding announced today for British manufacturing to increase investment in eight sectors across the UK:
Kevin Craven, Chief Executive, ADS Group said: “On behalf of industry, ADS is very pleased to welcome the measures announced by the UK Government to support UK aerospace, re-affirming long-term backing for our world-leading advanced manufacturing sector.
“The UK’s aerospace, defence, security, and space sectors are powerhouses of growth, hubs of ground-breaking innovation, and pioneers of the UK’s advanced manufacturing capability.
“Set against a backdrop of increasing global competition, the continued commitment towards aerospace R&D is significant and will provide a boost to continued investment in innovation and advanced manufacturing in the UK. This is a very timely intervention given the growing pace of aerospace recovery, huge aircraft order backlog and industries’ continued commitment to net zero.”
John Harrison, Chairman, Airbus UK and General Counsel, Airbus said: “Airbus welcomes the funding earmarked for aerospace and advanced manufacturing which offers greater certainty for long-term investment in sustainable aviation and highly skilled jobs here in the UK.
“This is positive for the UK economy both in terms of R&D investment today, as well as securing future growth”
Mike Hawes, Chief Executive, The Society of Motor Manufacturers and Traders (SMMT) said: “Today’s announcement is an unequivocal vote of confidence in the UK’s critical automotive industry.
“Coming on the back of almost £20 billion committed by the sector in next generation plants and technologies this year alone, it is indicative of the scale of investment such support can leverage and the result of substantial collaboration between Government and the industry.
“This additional Government investment reflects the fact the UK automotive sector has the talent, the innovation and the determination necessary to thrive in the face of fierce global competition. It will deliver benefits not just for the automotive sector but for the whole country in terms of growth, high value jobs and productivity. It also sends a powerful signal that the UK is open for business.”
Richard Torbett, Chief Executive, the Association of the British Pharmaceutical Industry (ABPI) said: “We’ve long believed that the UK’s has the potential to be a world leader in advanced and sustainable medicines manufacturing.
“This £520 million will supercharge UK life sciences manufacturing, combatting the increasing international competition to attract major manufacturing investment. Added to our existing strengths and technical expertise in manufacturing innovation, today’s announcement is a major step forward in delivering on our shared ambitions for long term growth.”
Dan McGrail, Chief Executive, RenewableUK’s said: “At a time when international competition for investment in clean technology manufacturing is fierce, the Chancellor is right to take a more proactive approach to stimulate green industrial growth.
“The UK’s leadership in areas like offshore wind has given us a strong foundation to build on, with supply chain companies already in place across the country employing thousands of workers. But with the global market set to skyrocket in the years ahead, we should be looking to capture as much of this multi-billion pound opportunity as we can through a more strategic approach to building the UK’s manufacturing base.
“The Chancellor has been clear that the Green Industries Growth Accelerator is for strategic industries, targeted to unlock maximum private investment where the UK can be competitive – and there couldn’t be a better fit for that than offshore wind and renewables.
“With the right support, the likes of which we’ve seen from Government today, industry estimates that the offshore wind supply chain alone could boost the UK’s economy by £92bn by 2040. The sector is working to develop an Industrial Growth Plan which will set out how we can capture this opportunity to boost our energy security, grow our domestic supply chain and provide affordable power to consumers”.
Brian Holliday, managing director at Siemens Digital Industries UK, and co-chair of Made Smarter, said: “Today’s announcement clearly says that UK manufacturing matters. It represents a tremendous investment boost for our makers that will enable the confidence to invest in innovation, productivity and sustainability.
“Key sectors benefit but so does the long tail of small and medium firms which is really important to directly address our recent challenges of weak overall productivity and investment.
“The business benefits of digitalisation are now clear, while being an enabler for industrial decarbonisation too – the package of measures announced in bolstering Made Smarter, targeted regulatory reform and sector support, along with our world-class Catapults and Universities now makes the UK one of the best countries on the planet to sustainably design, make and export goods.“
Government protects cash access services, free of charges, across the UK
New minimum expectation for cash-users set out by City Minister
Vulnerable cash users protected by Financial Conduct Authority (FCA)
A government statement published today sets out the minimum expectations on banks to protect services for people and businesses wanting to withdraw or deposit cash.
They can expect to withdraw cash without any fees – something that has been set out in law.
As part of this move, the Financial Conduct Authority (FCA) has been provided new powers by the government to protect the provision of cash access services. This includes protecting cash access without any fees for those who hold personal current accounts.
Building on laws granted through the government’s Financial Services and Markets Act 2023, the FCA will use these newfound powers to make sure banks and building societies are keeping up to these standards – and have the power to fine them if they do not.
While the country is moving further away from using coins and notes with the number of online payments rising from 45% to 85% in the past ten years, cash can still be an integral part of many businesses and people’s lives.
Economic Secretary to the Treasury, Andrew Griffith, said: “Whilst the growing choice and convenience of digital payments is great, cash has an important and continuing role to play.
“That’s why we are taking action to protect access to cash in law and laying out that this means fee-free withdrawals and the availability of cash facilities within a reasonable distance.
“People shouldn’t have to trek for hours to withdraw a tenner to put in someone’s birthday card – nor should businesses have to travel large distances to deposit cash takings.
“These are measures which benefit everyone who uses cash but particularly those living in rural areas, the elderly and those with disabilities.”
As it stands, the vast majority of people living in urban areas can access cash deposit and withdrawal services within one mile; with rural-dwellers around three miles away.
Today’s policy statement makes clear that the FCA should use its powers to maintain this level of coverage, while recognising that needs may differ by location and change over time.
It also makes clear that – if a service is withdrawn and a replacement service is needed – this should be put in place before the closure takes place.
The FCA is also required to ‘have regard’ to local deficiencies in cash access. The policy statement sets out that the regulator should consider factors such as the opening hours and distance to cash access services, as well as the need for in-person assistance.
Laws introduced in the Financial Services Act 2021 have delivered cashback in over 2,500 shops across the UK – without any need to buy something in store – through the LINK network.
UK Government will continue to top-up the Scottish Government’s tax revenues, worth £1.4 billion last year, as a benefit of strength and scale of the UK.
Boost to borrowing powers and backing of Barnett formula will build a better future for Scotland and help to grow the economy.
Chief Secretary to the Treasury John Glen hails a fair and responsible deal in line with the Prime Minister’s economic priorities.
The UK and Scottish Governments have today reached an agreement on an updated Fiscal Framework.
Holyrood’s capital borrowing powers will rise in line with inflation, enabling the Scottish Government to invest further in schools, hospitals, roads and other key infrastructure that will help to create better paid jobs and opportunity in Scotland.
The new deal maintains the Barnett formula, through which the Scottish Government receives over £8 billion more funding each year than if it received the levels of UK Government spending per person elsewhere in the UK. It also updates funding arrangements in relation to court revenues and the Crown Estate.
Chief Secretary to the Treasury, John Glen, said:“This is a fair and responsible deal that has been arrived at following a serious and proactive offer from the UK Government.
“We have kept what works and listened to the Scottish Government’s calls for greater certainty and flexibility to deliver for Scotland.
“The Scottish Government can now use this for greater investment in public services to help the people of Scotland prosper. These are the clear benefits of a United Kingdom that is stronger as a union.”
The funding arrangements for tax will be continued, with the Scottish Government continuing to keep every penny of devolved Scottish taxes while also receiving an additional contribution from the rest of the UK.
Under the previous Fiscal Framework, the Scottish Government could borrow £450 million per year within a £3 billion cap, as well as receiving a Barnett-based share of UK Government borrowing. Going forward these amounts will instead rise in line with inflation, which supports additional investment across Scotland and lays the foundations for economic growth.
The UK Government has listened to calls from the Scottish Government for greater certainty and flexibility to help them manage their Budget and agreed a permanent doubling of the resource borrowing annual limit from £300 million to £600 million.
Limits on how much can be withdrawn from the Scotland Reserve to spend in future years will also be removed. This will boost spending through borrowing by £90 million in 2024/25. All future limits will increase in line with inflation.
Scottish Secretary Alister Jack said:“The renewed Fiscal Framework shows what can be achieved when there is a collaborative focus on delivering economic opportunity and why we are stronger and more prosperous as one United Kingdom.
“The deal – worth billions of pounds to Scotland over the coming years – builds upon work to support economic growth and provide more high skill jobs, investment and future opportunities for local people, such as the establishment of Investment Zones and Freeports in Scotland.
“The UK Government knows that high prices are still a huge worry for families. That’s why we’re sticking to our plan to halve inflation, reduce debt and grow the economy. As well as providing targeted cost of living support, we are directly investing more than £2.4 billion in hundreds of projects across Scotland as we help level up the country.”
As both governments continue to work together to tackle challenges like the cost of living, an updated Fiscal Framework equips the Scottish Government with the instruments for growth while protecting the wider public finances.
Scotland’s Deputy First Minister Shona Robison said: “This is a finely balanced agreement that gives us some extra flexibility to deal with unexpected shocks, against a background of continuing widespread concern about the sustainability of UK public finances and while it is a narrower review than we would have liked, I am grateful to the Chief Secretary to the Treasury for reaching this deal.
“As I set out in the Medium-Term Financial Strategy, we are committed to tackling poverty, building a fair, green and growing economy, and improving our public services to make them fit for the needs of future generations.
“We still face a profoundly challenging situation and will need to make tough choices in the context of a poorly performing UK economy and the constraints of devolution, to ensure finances remain sustainable.”
This morning the UK and Scottish governments have published the long-awaited update to the Fiscal Framework, following the review that has been going on for the last couple of years (writes MAIRI SPOWAGE of the Fraser of Allander Institute).
Since this was due to happen in 2021, we have been waiting for the outcome of this review. For more background, see our blog from late 2021.
For those new to it, the Fiscal Framework sets out the rules for how devolution of tax and social security powers following the Scotland Act 2016 is supposed to work in terms of finances. It sets out the mechanisms by which the Scottish block grant is adjusted to reflect the fact that large amounts of tax and social security powers are now the responsibility of the Scottish Parliament.
It also sets out fiscal flexibilities that the Scottish Government can choose to use in managing these new powers, as new tax and social security powers also come with risks that require to be managed.
In this blog, we set out the main headlines and our initial reaction to the updates.
The mechanism for adjusting the Block Grant will remain permanently as the Index Per Capita (IPC) method.
This is one of the most complex areas of the fiscal framework but definitely one of the most significant.
For tax, it sets out the mechanism for working out how much the UK Government has “given up” by devolving a tax to Scotland, given that it is a significant loss in revenue. As, following devolution, there are different policies pursued in rest of UK and Scotland, this is not straightforward. Essentially though, the mechanism agreed in 2016 was to grow the tax at the point of devolution at the rate, per person, that it grows in the rest of the UK. This is known as the Index Per Capita (IPC) method.
So, the idea is that if taxes per head grow quicker in Scotland, the Scottish Budget will be better off – conversely, if taxes per head grow more slowly, the Scottish Budget will be worse off.
In 2016, when the fiscal framework was first agreed, the IPC method was the SG’s preference, whereas the UKG preferred the “Comparable Method” (which would generally be worse than the IPC method for the Scottish Budget). SO they agreed to use IPC for the first 5 years and review it in this review published today.
They have now agreed that the IPC method will remain on a permanent basis.
Interestingly, this means that on a permanent basis, the mechanisms for adjusting the block grants for Wales and Scotland will be different, given Wales’s Fiscal Framework uses the Comparable Method, albeit with additional provisions to keep a funding floor in place.
Borrowing Powers for managing forecast error have been increased significantly
Resource borrowing powers to manage forecast error associated with tax and social security powers have been increased from £300m to £600m. This is required because when budgets are set, the tax, social security and block grant adjustment estimates are set on the basis of forecasts from both the Scottish Fiscal Commission and the Office for Budget Responsibility. When the outturn data is available, if there is a discrepancy (which is very likely) then the Scottish Budget has to reconcile these differences.
This will be good news for the Deputy First Minister looking ahead to delivering her first budget in December, given that it was confirmed recently that there will be a large negative reconciliation to reflect income tax receipts in 2021-22 of £390m. As these changes are coming into effect for the 2024-25 budget year, this means she will have more flexibility to borrow to cover this.
All limits, such as resource and capital borrowing powers, will be uprated in line with inflation
When the Fiscal Framework was first agreed, the limits on borrowing for both resource and capital, and the limits for what could be put into the Scotland reserve, were set in cash terms and have been fixed ever since.
This agreement today sets out that the ones that remain will be uprated by inflation (although the exact inflation measure and timing is still to be confirmed), and that the limits on the additions and drawdowns on the Scotland Reserve will also be abolished.
The VAT Assignment can gets kicked down the road again
One thing that is a little disappointing is that there was no final decision on VAT Assignment. See our blog from 2019 to get the background in this.
VAT Assignment was included as part of the Smith Commission powers. The idea was that half of VAT raised in Scotland would be assigned to the Scottish Budget, which would mean, if the Scottish Economy was performing better than the UK as a whole, the budget would be better off, and conversely, if VAT was growing less quickly in Scotland, the budget would be worse off.
However, after almost 10 years, it has become clear that there is no way to estimate VAT in Scotland that is precise enough for this to have budgetary implications. It is a large amount of money (more than £5 billion) so even small fluctuations in how it is estimated can mean changes of hundreds of millions of pounds.
Today, the Governments have agreed to just keep discussing it. We think it is time that everyone admitted it is just not a sensible idea.
We’ll keep digging through the detail of everything published today and will provide more commentary through our weekly update on Friday.
Tax paid on pints and other drinks on tap in over 38,000 UK pubs is now up to 11p cheaper than their supermarket equivalents
The new Brexit Pubs Guarantee will keep it this way for good
Alcohol duty now simplified so drinks are taxed by strength, lowering duty on supermarket shelves for many UK favourites including bottles of pale ale, pre-mixed gin and tonic, and prosecco
Over 38,000 UK pubs and bars have seen a tax cut on the pints they pull from today as the government’s alcohol duty changes take effect.
The duty paid on drinks on tap in pubs will be up to 11p lower than at the supermarket. The changes are designed to help pubs compete on a level playing field with supermarkets, so they can continue to thrive at the heart of communities across the UK. The Brexit Pubs Guarantee announced in the Chancellor’s Spring Budget secures the pledge that pubs will always pay less alcohol duty than supermarkets going forwards.
It comes as other landmark changes to the alcohol duty system also come into effect today, which see drinks taxed by strength for the first time and a new relief – named Small Producer Relief – to help small businesses and start-ups create new drinks, innovate and grow.
Today’s changes have automatically lowered the duty in shops and supermarkets on many of the UK’s favourites including certain bottles of pale ale, pre-mixed gin and tonic, hard seltzer, Irish cream, coffee liquor and English sparkling wine, amongst others.
Prime Minister Rishi Sunak said: “I want to support the drinks and hospitality industries that are helping to grow the economy, and the consumers who enjoy the end result.
“Not only will today’s changes mean that that the price of your pint in the pub is protected, but it will also benefit thousands of businesses across the country.
“We have taken advantage of Brexit to simplify the duty system, to reduce the price of a pint, and to back British pubs.”
Jeremy Hunt, Chancellor of the Exchequer, said: “British pubs are the beating heart of our communities and as they face rising costs, we’re doing all we can to help them out. Through our Brexit Pubs Guarantee, we’re protecting the price of a pint.
“The changes we’re making to the way we tax alcohol catapults us into the 21st century, reflecting the popularity of low alcohol drinks and boosting growth in the sector by supporting small producers financially.”
The three alcohol duty changes that have taken effect today are only possible thanks to the UK’s departure from the EU and the guarantees set out in the Windsor Framework.
The previous duty system was complex and unfair but now that the UK is free to set excise policy to suit its needs, the government has brought about common-sense reforms in order to support wider UK tax and public health objectives.
Brexit Pubs Guarantee
Over 38,000 UK pubs will benefit from lower alcohol tax on the drinks they pour from tap from today. This is because the government has expanded Draught Relief, which effectively freezes or cuts the alcohol duty on the vast majority of these drinks. This is to protect pubs, who are often undercut by supermarket competitors.
It means that the duty they pay on each drink poured from draught, such as pints of beer and cider, will be up to 11p cheaper than in supermarkets. The government has pledged that the duty pubs and bars pay on these drinks will always be less than retailers, known as the Brexit Pubs Guarantee.
This tax reduction is part of a wider shake up of the alcohol duty system which also comes into effect from today – the biggest in 140 years.
A simpler, more modern alcohol duty system
The alcohol duty reforms were announced at the Autumn Budget in 2021. The reforms pledged to modernise and simplify a duty system that had not been changed in 140 years, only possible as the UK has left the EU.
The key changes are:
All products taxed in line with alcohol by volume (ABV) strength, rather than different duty structures for different drinks
Fewer main duty rates, from 15 to 6, to make it easier for businesses to grow and operate
There will be lower taxes on lower alcohol products – those below 3.5% alcohol by volume (ABV) in strength – a huge growth area in the drinks industry
All drinks above 8.5% ABV will pay the same rate regardless of product type This will mean that many UK favourites will see duty reductions. Irish cream will drop by 3p, cans of 5% ABV ready-to-drink spirit mixers by 6p, Prosecco by 61p and 500ml 3.4% pale ale by 20p a bottle.
New tax relief to encourage small producers to make new drinks
The UK alcoholic drinks market reached just under £50 billion in 2022, up 6% year on year and is expected to continue to grow – sales are forecast to reach £60.9 billion in 2026. The UK government is laser-focused on continuing this burgeoning success.
The government is introducing Small Producer Relief effective from today, which replaces and extends the previous Small Brewers Relief scheme.
This allows small businesses who produce alcoholic products with an ABV of less than 8.5% to be eligible for reduced rates of alcohol duty on qualifying products.
The new tax relief scheme promotes innovation in the drinks sector, giving small producers the financial freedom to experiment with new types of drink and grow their business. It also supports the modern drinking trend of lower alcohol beverages.
New requirements on banks will protect freedom of expression
New rules will give consumers greater confidence to challenge account closures
Changes available because of Brexit and recent government legislation
Banks will be forced to explain and delay any decision to close an account under new rules, protecting freedom of expression.
The Government has stepped in to address fears that banks are terminating accounts because they disagree with someone’s political beliefs.
The changes will increase the notice period to 90 days – giving customers more time to challenge a decision through the Financial Ombudsman Service, or find a replacement bank.
Banks will also be required to spell out why they are terminating a bank account – boosting transparency for customers and aiding their efforts to overturn decisions.
The changes announced today can only be made due to new powers in the Financial Services and Markets Act 2023, which give Britain control of its financial rulebook following Brexit.
Economic Secretary to the Treasury, Andrew Griffith, said:“Freedom of speech is a cornerstone of our democracy, and it must be respected by all institutions.
“Banks occupy a privileged place in society, and it is right that we fairly balance the rights of banks to act in their commercial interest, with the right for everyone to express themselves freely.
“These changes will boost the rights of customers – providing real transparency, time to appeal and making it a much fairer playing field.”
The proposed changes follow a call for evidence launched in January, following PayPal’s temporary suspension of several accounts last year. It found that changes were needed to ensure the right balance is being struck between protecting customers, and providers’ rights to manage commercial risk.
They require secondary legislation, which will be delivered through the powers granted in the Financial Services and Markets Act 2023, as part of the Government’s programme in building a Smarter Regulatory Framework for UK financial services.
This runs alongside separate plans to clarify in legislation the requirements for Politically Exposed Persons (PEPs), and a review into whether these are being applied proportionately by financial institutions.
These steps were commissioned by Parliament last month as part of the Financial Services and Markets Act 2023; and the FCA will set out how they intend to conduct the review by the end of September.
Interactive guide expected to help staff spot and tackle economic abuse
95% of women who experience domestic abuse report experiencing economic abuse
Treasury minister calls for experts to provide feedback on the guide
UK businesses and charities are set to benefit from a free interactive guide to help their staff spot and tackle economic abuse when speaking to customers over the phone, Financial Secretary to the Treasury Victoria Atkins has announced today.
The interactive guide, which will be available widely later this year, is being released to 30,000 HMRC staff today to help them spot the signs and create an appropriate environment for victims to disclose their experiences. It builds on the government’s Economic Abuse Toolkit, released earlier this year.
Victoria Atkins met with staff and survivors at Advance charity’s West London Women’s Centre today to mark the announcement and was joined by former Love Island contestant and domestic abuse campaigner Malin Andersson.
The minister ran through an early demo of the tool with attendees at the visit to drum up momentum as she called on experts to work with HMRC to get the online tool right, before they distribute it freely online later this year.
By increasing the awareness of staff in government, business and charities of economic abuse, the government hopes the new interactive tool will play its part in stopping violence against women and girls, to build stronger communities for future generations.
Financial Secretary to the Treasury Victoria Atkins said: “The government passed the landmark Domestic Abuse Act and I am determined to build on that commitment to help victims.
“Economic and financial abuse can be less understood than other forms of domestic abuse, which is why it is vital organisations share best practice with one another whenever they can.
“That is why I’ve asked HMRC to work with charities and experts over the summer to produce a publicly available interactive guide which staff from any organisation which speaks to customers will be able use.”
Economic abuse, which domestic violence charity Refuge estimates 16% of adults in the UK have experienced, is when an individual’s ability to acquire, use and maintain economic resources are taken away by someone else in a coercive or controlling way.
Internal guidance has been distributed to 30,000 HMRC staff today to help front line staff spot victims of economic abuse when speaking to them over the phone. It will help them understand the different types of economic abuse, as well as what signs and characteristics to look out for.
The aim is for this guidance, with support from industry, charities and experts over the summer, to be turned into a free interactive tool to support businesses and organisations whose employees also speak to customers daily.
Malin Andersson said: ““We need everyone to work together if we’re going to be able to stamp out domestic abuse once and for all, so it’s fantastic to see an initiative which will make a difference by training so many people, from businesses and charities, to recognise economic abuse.”
Minister Atkins will also introduce the early demo of the interactive guidance to representatives from the financial services sector and charities at a roundtable later today, where she will hear more about what the sector is doing to tackle economic abuse and what more can be done.
By working with stakeholders to develop and tailor it, the government wants the interactive guidance to reflect the real-world experiences of victims.
Niki Scordi, Advance’s CEO said: ““Understanding the behaviours of domestic abusers and their continuous attempts to intimidate and control survivors, mainly women and children, long after they leave the abusive home is vital.
“This includes control through economic and financial means, such as child support, school fees, bank accounts, loans and access to employment.
“Supporting survivors with specialist Domestic Abuse Advocates in the community and charities like Advance is essential to help change, and sometimes save, the lives of those devasted by domestic and economic abuse.”
The internal guidance distributed by HMRC to its staff today comes hot off the heels of the Economic Abuse Toolkit released in January 2023, which aims to help public sector organisations train staff to identify economic abuse.
Specialist charity Surviving Economic Abuse (SEA), which was one of the organisations which contributed to the Toolkit, has seen a 150% increase in its website user numbers over the past two years (April 2021 5200 users. April 2023 13,000 users).
SEA research also found seven in ten front-line professionals reported the number of victims of economic abuse coming to their organisation for help had increased since the start of the pandemic. By the end of the first lockdown, SEA found one in five women were planning to seek help around welfare benefits.
Tackling domestic abuse is a government priority and improving the response to economic abuse is integral to this. For the first time in history, economic abuse is now recognised in law as part of the statutory definition of domestic abuse included in the Domestic Abuse Act 2021. This is in recognition of the devastating impact it can have on victims’ lives.
Dr Nicola Sharp-Jeffs OBE, CEO and founder of Surviving Economic Abuse said: “Economic abuse is an insidious and often invisible form of control, one which can trap a victim-survivor in a relationship with an abuser and leave them feeling like there is no escape.
“This form of abuse can create dependency on an abuser by restricting their access to economic resources, or instability if the survivor is forced to cover all household costs. It causes long lasting harm including debt and bad credit, so that even when someone manages to leave, these effects can follow them around for the rest of their lives, often preventing them from moving on safely.
“We know that victim-survivors are more likely to disclose economic abuse to their bank than they are to the police.
“It is crucial that frontline employees – whether they work in the public or private sector – are trained to understand economic abuse and how abusers might use their service to continue to control a victim.
“It is vital they are given the knowledge and the tools to spot the signs of economic abuse, develop specialist responses and feel confident signposting a survivor to broader support. The right response can be life changing.
“We’re delighted to see the Treasury take this important step to ensure victim-survivors of economic abuse get a good response whoever they speak to. We look forward to working together to ensure this new interactive guide helps organisations effectively respond to economic abuse.”
