Now is the time to deliver, Chancellor

EVERY Budget is described as the most important fiscal event for years. This one might live up to the billing.

Thanks to the success of the vaccine roll-out, lockdown restrictions look set be largely lifted by early summer and the Office for Budget Responsibility projects that UK economy could bounce back to 2019 levels by early next year. Yet the scars inflicted by the pandemic mean that support is still needed. We are pleased to see that the Chancellor has met our call for restart grants. This will be critical in boosting cash flow, but there is much more that will be needed to be done to help firms. As we called for last week, the Chancellor must work with banks to ensure that tight credit does not suffocate our small businesses and wider economic recovery.

One welcome proposal is the creation of the world’s first green savings bonds. These can be used by businesses to raise funds to invest in low carbon projects, from electricity generation to transport, and will be critical if the UK is to meet its target of net-zero carbon emissions by 2050.

Green bonds can help match companies looking to invest in low carbon projects with investors eager to support such schemes and have the potential to reduce borrowing costs. Indeed, there is a wall of money waiting to be ploughed in green projects and the UK is well placed, with buy-in from both the public and the Government.

Such bonds are also an opportunity. The City has been clobbered by Brexit, which has already pushed business activity away to New York and Amsterdam. Green bonds are therefore an opportunity for London to lead. To fully harness their power, the Government should loosen the restrictions on what pension funds can invest in and encourage them to put their money into green bonds.

Tough economic times lie ahead. But with the introduction of green bonds, in addition to policies we have consistently called for, such as continuing the furlough, extending VAT cuts and business rates relief, it will go a long way to ensuring the UK economy bounces as high as possible. We urge the Chancellor to deliver on these crucial policies.