The chancellor’s Growth Plan is unlikely to have a measurable impact on the size of the economy and any short-term boost is set to be neutralised by the Bank of England. Whether the ultimate consequences of this plan are higher interest rates triggering house price falls, or public services cuts to fill the yawning fiscal deficit, this fiscal cakeism is unlikely to end well for the government.
Ian Mulheirn Executive Director, UK Policy
Poorer households are still set to be worse off from April as additional support offered this year will not be repeated. Meanwhile, better-off households will benefit from today’s tax cuts, with the richest tenth being £2,000 a year better off next year than they are today.
James Browne Head of Work, Income and Inequality
Figure 2: Poorer households still set to be worse off in April
At £60 billion for six months, energy bill support is clearly fiscally unsustainable, but government has no exit strategy except to hope prices fall. The clock is ticking, and markets are watching. The planning needs to happen now.
Daniel Newport Head of Net Zero
It’s back to the future on corporate tax reforms
Jeegar Kakkad Head of Productivity and Innovation
Figure 3: Main corporate tax rate and annual investment allowance remain unchanged
Special Investment Zones are only likely to succeed as part of an integrated plan to raise productivity. But there is little evidence of this kind of long-term thinking here. Rather they look set to leak tax revenues while doing nothing for growth.
Steve Coulter Head of Industrial Strategy and Skills