Our response to Spring Budget 2023
From a co-operative perspective, the week’s Budget included vital support for community organisations struggling with high energy bills. But we are struck by the missed opportunities to try something new in the UK economy.
Vital help for community organisations
The budget includes over £100 million to support charities and community organisations struggling to meet increased demand for their services because of the social crisis, while also being hit by unsustainable energy bills. This money can be used to address financial pressures and to increase energy efficiency.
Co-operatives UK is seeking more details urgently and we hope this funding will help some community co-operatives we know are struggling.
This funding is testament to the great work of organisations like Locality who have lobbied hard on behalf of community organisations over the winter.
What about businesses?
We are concerned that greater exposure to historically high energy bills from April risks serious harm to the co-operative sector. We didn’t expect the Chancellor to extend current support for firms to pay their bills. But we hoped to hear more about how businesses will be supported to invest in energy saving and decarbonisation. This is a glaring omission in our view.
Worker buyout tax relief
Unfortunately, the Chancellor passed up an opportunity to save thousands more jobs every year through worker buyouts, by amending an existing employee buyout tax relief so that it also applied to conversions using the worker co-operative model.
At a time when hundreds of thousands of potentially viable jobs are at risk because of business closure, transitions to worker ownership offer a proven way to sustain jobs through resilient, productive and socially just enterprises. Our proposals for improving the employee buyout tax relief would give workers and businesses more good options for doing just this.
Our modelling suggests that allowing converting businesses to use the simple and low-cost worker co-operative model, could also save these firms millions of pounds each year in legal and associated costs.
With our members and friends in the worker co-operative movement, Co-operatives UK plans to campaign on this issue between now and the next Budget.
Private wealth for common good
It’s not a surprise that government has decided to let Social Investment Tax Relief die in April. Over the years HM Treasury has drastically undermined the utility and impact of the relief, by excluding co-operative societies, agriculture, renewable energy and buyouts. However, we are concerned that government appears to have no new plans for incentivising the investment of private wealth in socially and environmentally beneficial enterprise. Unless this happens, we’ll remain trapped in our low-wellbeing and environmentally disastrous economy.