Targeted help can be provided to those in need, as was the case during the energy crisis. That’s what we should stick to – not a return to bureaucratic mechanisms.
One might see this not as an aim to replace current fiscal prudence, but to ensure a greater focus on where public expenditure takes place. It’s more than a balance sheet or accounting exercise.
The changing global landscape should refocus our policy on the factors that are need to improve the investment outlook – such as sound macro polices and the level, predictability and simplicity of tax.
In terms of fiscal policy, if the wider economic picture does not allow the debt to GDP ratio to fall, then the focus of the markets will be on the need to keep the public finances in shape.
While no-one should be complacent, the initial evidence is that current problems are specific and not systemic.
There are growing fears that promising growth companies won’t actively consider listing in London, and that the current drip-drip of companies moving to New York may become a flood.
The lesson that he will take from his predecessor’s mini-Budget is to manage expectations – and ensure that the markets are comfortable with what is planned.
The Chancellor, too, is right to focus on using incentives to encourage those who can work to remain in the labour force and this should figure prominently in the March Budget.
The shift to subsidies is more than the timely, targeted and temporary measures that we saw during the pandemic, and signifies a bigger change in global public policy.
While there is much talk of a deep recession, the jobs data suggests it may be shallower and shorter-lived than some fear.
It is important to push back against those who might argue that such awards should be funded not through increased borrowing but higher taxation.
Where there is need, front line staff like doctors and nurses are underpaid, relative to what they should receive, and where there isn’t, a whole host of people are well paid.
We now have created a situation where the OBR is effectively setting the immediate stance of fiscal policy. If economic expectations are poor, the finances look poor, so austerity or tax hikes follow – but these in turn make the economy and finances worse.
A pro-green agenda can complement a pro-growth one rather than contradict it, and the two can work together hand in hand – making progress on levelling up as they do so.
‘Trussonomics’, which was never really defined and was yet to evolve, is now dead. The events in recent weeks that led to its downfall were avoidable.