Savings

The Government has announced the creation of a Lifetime ISA for adults under the age of 40. For every £4 saved in the account the Government will pay in a pound up to £4,000 each year. The ISA allowance will also rise from £15,240 to £20,000 in April 2017. To help those on low incomes, the Government has announced Help to Save which will provide a 50% government bonus on up to £50 of monthly savings. 

Commenting, Senior Research Fellow at Bright Blue, David Kirkby said: 

“The Chancellor’s focus on boosting savings is welcome. Particularly for those on low income and for the self-employed, household savings are all too often limited or non-existent. This weakens financial resilience and can increase costs to the state in the long run. 

Bright Blue has long been calling for government to incentivise and reward savings for those on low incomes through matched funding. The new Help to Save scheme is welcome and could significantly boost savings rates for those on low incomes.” 

Support for the self-employed

Mentoring support offered to self-employed individuals on the New Enterprise Allowance scheme is to be extended to self-employed Universal Credit claimants. Face-to-face support from Jobcentre advisors for the self-employed will also be trialled. 

Commenting, Senior Research Fellow at Bright Blue, David Kirkby said: 

 “The Government is right to seek to improve the advice self-employed people on low incomes receive to grow their businesses. But, as Bright Blue’s recent report showed, 35% of self-employed people say that other local business people are the most effective source of advice, not the state.

So, the focus should be on building peer-to-peer networks for the self-employed. One way of doing this, as Bright Blue has recently suggested, is making some funding for Local Enterprise Partnerships contingent on supporting the building of local advice networks for the self-employed.”

Infrastructure

The Government has announced funding for a high speed rail link (HS3) that aims to reduce journey times between Manchester and Leeds as well as a new Trans-Pennine road tunnel underneath the peak district between Sheffield and Manchester. It has also given the green light to Crossrail 2 with £80m of development funding.

Commenting, Senior Research Fellow at Bright Blue, David Kirkby said: 

“The Chancellor has shown that he is willing to make the long term investment decisions needed to keep Britain moving. New transport infrastructure for the north of England is particularly welcome. Currently, rail travel times between Britain’s major northern cities are unacceptably low. The emphasis must be not merely upon better connections to London, but on connections between Manchester, Leeds and other major northern cities. Bright Blue called for such a scheme – High Speed 3 – several years ago, and it is welcome that the Chancellor has given it the green light.” 

Schools

The Government will provide up to £285 million a year to give 25% of secondary schools increased opportunity to voluntarily extend their school day to offer a variety of activities for pupils, including more sport. 

Commenting, Researcher at Bright Blue, James Dobson, said:

“The Government is right to offer more children – especially those from more modest backgrounds - the opportunity to access extracurricular activities offered through an extended school day. Fee-paying schools have long done this, providing activities such as sport. Evidence suggest that such activities can have a significant and positive effect on academic attainment and social skills.

Extending the school day will also enable parents to better balance their work and family commitments. Policymakers have long called for more flexible working. But we also need more flexible public services”.   

Lifetime learning 

The Government has announced that it will extend tuition fee loans to more FE and HE courses, from basic skills courses to PhDs, both at full-time and part-time level.

Commenting, Researcher at Bright Blue, James Dobson, said:

“Lifelong learning gives people the opportunity to reskill and upskill throughout their lives, thereby boosting social mobility. Our recent report showed the biggest barrier to people participating in part-time higher education is not being able to afford course fees. So it is right the Government is extending tuition fee loan support for more types of FE and HE courses.

Despite the welcome extension of tuition fee loans, it is still the case that only around 31% of part-time students are actually eligible for them. This is because students who are taking a lower or equivalent qualification to one they have previously undertaken are not entitled to tuition fee loans. 

It is time for the government to offer lifetime tuition fee loan accounts for all students, enabling people – regardless of their age and the number and type of courses they have – to receive financial help for lifelong learning."

Energy

The Government will abolish the Carbon Reduction Commitment after 2018-19 and increase the Climate Change Levy to compensate for the lost revenue. The Government will implement the recommendations of the National Infrastructure Commission’s study on smart power, allocating at least £50 million for innovation in new smart technologies. The Government will auction Contracts for Difference worth up to £730 million for offshore wind and other new renewables in this Parliament.

Commenting, Ben Caldecott, Associate Fellow of Bright Blue, said:

“We welcome the government’s commitment to implement the National Infrastructure Commission's recommendations on electricity storage, demand side reduction, interconnection, and smart appliances. There is a real opportunity for the UK to become a leader in the intelligent management of electricity demand and to spur the development of flexible electricity storage capacity. These could transform the power system and enable much higher penetrations of renewable power.”