Chancellor Rishi Sunak’s plans to jumpstart the economy with the super deduction aimed at boosting business investment is biased towards jobs typically taken by men by focusing too heavily on encouraging investment in infrastructure projects, MPs have been told.
Economist Susan Himmelweit, from the Women’s Budget Group, speaking to MPs on the Treasury Select Committee said plans to offer businesses £130 for every £100 spent must move away from just being able to be claimed on new plants and machinery.
She said: “Having a view of investment that it’s only physical is already a very clear male bias and we got that very clearly in this Budget in the way the super deduction is targeted on physical investment.”
The expert added that more focus must be made on childcare, pointing out that women have been disproportionally hit during the pandemic, with three quarters saying their earnings or hours were cut during the year due to being unable to access enough childcare.
She added: “Investment in childcare will be really important in the next year because a huge number of childcare centres are likely to close.
“Around a quarter of childcare providers believe they’ll close within a year and they are concentrated in the poorer areas of the country.
“Of mothers who have been made redundant this year, 46% said that a lack of childcare was a factor in them being selected for redundancy.”
The comments came as economists and experts from the Confederation of British Industry (CBI), the Resolution Foundation (RF), the Institute for Fiscal Studies (IFS) and Deloitte answered questions on last week’s Budget.
The panel agreed that the return to full time, five-days a week working is over and that most office-based businesses are not expecting a return to pre-pandemic structures.
Ian Stewart, chief economist for Deloitte, explained the accountancy giant has been polling around 800 clients on a regular basis.
He said: “It’s a complete mix of people but they’ve said on average they’ve said they’d like to work in the office two days a week.
“Very few people want to work entirely at home or entirely in the office.
“I think it’s going to be a step change.
“I think this is going to cause a significant acceleration of this.”
Rain Newton-Smith, chief economist for the CBI, added her members expect to take only 70% of office capacity in future, meaning city centres could struggle.
She added: “We do need to think about this and put a premium on urban regeneration.”
The economists also said the rise in Corporation Tax from 2023 to 25% from 19% must remain competitive globally and may need to have other incentives when the super deduction ends.
Paul Johnson, director at the IFS, said: “Clearly there are risks to such a big increase in corporation tax in terms of the scale of investment, in particular inward investment.
“Whilst this will raise a significant amount of money in the medium run it’s clear it won’t raise the full £17 billion a year (predicted by the Treasury).”
He added: “Much the most important issue here is political and institutional stability and certainty much more generally and it’s the lack of that that has been significantly behind the low levels of investment over the next four years.
“In terms of investment and growth, the absolute priority for the Chancellor and indeed the Government is to provide that framework for certainty.”