Societal Impact of the Spring Budget 2024 through an ESG lens

Looking at today’s Spring Budget through the lens of ESG, the Government stayed fairly quiet on how they are going to finance and regulate to achieve a net zero UK by 2050, with a focus on expanding the nuclear industry to help with the national decarbonisation goals. 

However, the societal impact of today’s budget will be important to analyse, with changes benefitting many but gaps missing in how this will be successfully implemented.

Following the announcement that the UK had entered a recession at the end of 2023, it will be a welcome relief to many to see the National Insurance cuts being expanded by a further 2p. More money in employee’s pockets can only be a positive move for the local economy and our local communities. In addition, the childcare reforms, including the increase in the earning threshold to £60k, will relieve some pressure on families and encourage more parents to return to the labour market to bridge the gender pay, pension and progression gaps.

The scrapping of the £90 debt relief order fee and six more months of cost-of-living support for people most in need will make some difference but doesn’t change the fundamental issues that are preventing people from breaking the cycle of relative poverty. We need to decide if today’s announcements go far enough, to truly support people who are struggling in the ongoing cost of living crisis. This will take much more drastic tax reform, and from a political perspective, this Spring Budget was not the time make such radical changes as we approach the 2024 General Election.

But we need to recognise that at the grassroots, people are struggling to manage their finances and debt, and as the cost-of-living crisis continues, this is being normalised for our young people as they progress through education and into the workplace. Despite attempts to amalgamate financial education into the National Curriculum in 2014, a lack of resources has shown that it is not being implemented or prioritised effectively. External financial wellbeing providers and specialists have also seen a reduction in funding opportunities since the introduction, so the gap has widened further, with Martin Lewis going as far as to call it a “pyrrhic victory” for financial education.

As we wait for government to take the lead on better supporting our communities with cost of living and financial education, businesses must take social responsibility for the roles they play in their local economy, identifying their societal purpose as part of their ESG strategy. This could be setting up a centralised fundraising structure that supports a charity or cause which is important to their employees and local community, or volunteering time and expertise at grassroot organisations to help them deliver support to the people most in need.

2024 is an important year for our Government and the Chancellor’s announcements will only be the start of the many pledges we will hear this year to enable the UK to achieve the social sustainability.