After a decade of forward guidance, credit easing and quantitative easing, it was clear even before the Covid-19 crisis that monetary policy had run out of road.
“We’re certainly going to see temporarily a considerably higher amount of government borrowing”, says Robert Chote.
If, that is, interest rates carry on at rock bottom rates. But we have to take a chance on growing our way out of this crisis.
Here, the recovery of our automotive and construction sectors is crucial – firms in the region directly employ around 46,500 people.
If it proves a temporary blowout rather than permanent, accumulated debt levels being modestly higher looks manageable.
As in 2008, the line between survival and disaster will rest on the bond markets’ trust in the British Government and on the reputation of the Bank of England.
Hopefully it will be crisis averted, and we’ll have a bit more time to fix the hole. But sooner or later, difficult choices on tax and spending are coming.
It should remove those taxes and regulations that will stop business from applying their ingenuity on the problem of rebuilding from the ruins.
We don’t expect the shutdown to last in full until summer. But if it did, Britain might well be moving towards Universal Credit as a basic income.
Absent a clearly articulated strategy business uncertainty will heighten, and severe non-compliance is risked
The tax benefits of being self-employed should reflect genuine value added relative to normal employment.
The Treasury often fails to recognise the potential benefits of lower taxes, because they don’t properly factor in how behaviour changes.
This new plan from Onward would force the Government to set out its own plans and forecasts – and make the trade-offs that are inherent in migration policy.
We apologise for not being swept away by the mania for new announcements that infests this leadership contest.
Universities have generally had an excellent decade, but the rest of the system has not. It’s time to correct the imbalance.