The University of Manchester has offered a swift and candid assessment of today’s Budget, with leading academics warning that the government’s flagship economic promises still leave the country facing uphill challenges – from faltering productivity to widening inequalities in the shift to electric vehicles.
Productivity: “A steep climb ahead”
Tera Allas CBE, Honorary Professor at Alliance Manchester Business School, said the Office for Budget Responsibility’s latest projections underline just how fragile the UK’s productivity recovery remains.
“As expected, the OBR downgraded its labour productivity growth forecast, from 1.3% to 1.0% (by the end of the forecast period). This is still significantly higher than the outturn of zero percent post-COVID (from Q1 2021 to Q2 2025), or the average of 0.5% per year pre-COVID (between Q1 2010 and Q4 2019). While predicting productivity growth is challenging, there is a risk that the OBR might need to further reduce its forecast at future fiscal events.”
Bart van Ark, Managing Director of The Productivity Institute, gave an equally stark appraisal.
“There’s a steep climb ahead – this Budget sets a 1% productivity target, but current performance is stuck at less than half that pace. Efficiency gains, not new spending, will drive growth – but £4.9 billion in public-sector savings looks highly ambitious.
“£13 billion for devolved authorities is welcome, but flexibility in spending will decide whether it fuels real growth at the regional level. Spending on training gets a boost, yet Industrial Strategy support remains vague, and transport upgrades still lack clear timelines.
“This Budget won’t be a game changer. Without reforms, productivity growth will stay stuck at around 0.5%, far short of the 1–1.5% target.”
Electric vehicles: incentives rise, but so do inequalities
Dr Helen Zheng, Senior Lecturer in Spatial Planning, said the government’s approach to EV grants shows a shrewd attempt to steer subsidies toward mainstream motorists.
“The government’s approach to capping price eligibility for available grants reflects a pragmatic strategy. By focusing incentives on lower-priced models rather than luxury vehicles, the policy aims to make electric mobility accessible to the mass market rather than subsidising premium buyers.”
But charging access, she argued, remains a far deeper problem.
“A major inequality in charging infrastructure remains unresolved. While the government has proposed ‘cross-pavement solutions’ (such as cable gullies) as a fix for households without off-street parking, these interventions represent only a partial solution.
“Their availability depends heavily on a postcode lottery, as installation is only possible where local authorities permit such schemes. Crucially, they do not guarantee a parking space directly outside the home. And although grants are available, the remaining out-of-pocket cost can still be substantial for low-income households living in the many terraced properties that lack off-street parking, making the investment high-risk if they cannot reliably park next to it.
“The planned mileage-based charge for EVs from 2028, announced in today’s Budget, will add further pressure for some disadvantaged groups. These emerging costs align closely with existing patterns of transport poverty: many lower-income households live in areas with limited public transport and have no access to home charging will face higher per-mile energy costs, particularly when they face long commuting distances and rely on public charging infrastructure.”
