Budgets & fiscal events· Public spending Cutting back on the investment and delivery of public services is not what the economy needs – or what the electorate wants 27 February 2024 by James Smith and Tara Goatley The Government’s current plans for post-election cuts to public spending look undeliverable given rising prices and increasing demand on services. As discussed below, plans to cap day-to-day spending increases at 1 per cent (after allowing for inflation) imply very big cuts to departments not covered by existing spending commitments. This is particularly worrying given pre-existing … Continued READ MORE
Budgets & fiscal events This Budget will leave the poorest households hundreds of pounds a year worse off Families across Britain should expect a bumpy ride over the next six months 2 November 2021 by Mike Brewer Having spent the first 18 months in the job delivering Covid crisis fiscal statements, you can understand why there was a celebratory vibe to the Chancellor’s first “post-crisis” Budget today. The Government’s official economic watchdog, the OBR, came to the party laden with gifts – including a major upgrade to economic growth and a £141 … Continued READ MORE
Budgets & fiscal events· Tax Low tax conservatism is dead, but fiscal conservatism is back in fashion 13 September 2021 by Torsten Bell The Prime Minister and Chancellor made huge policy decisions this week, raising taxes to spend more on the NHS and protect the assets of those facing high social care costs. But the tsunami of announcements can also hide the biggest decisions they’ve taken: to bury the idea of low tax conservatism but resurrect, after a … Continued READ MORE
Covid-19· Budgets & fiscal events· Economy and public finances Sunak’s crisis-fighting measures: time to scale up? The Chancellor’s policy announcements are generating wide discussion but are the sums commensurate with the depth of the downturn? 13 July 2020 by James Smith This week the Chancellor Rishi Sunak unveiled his “Summer Economic Update.” In case it’s not clear, this wasn’t technically a Budget. That said, it still contained more policy than all but three of the fiscal events we’ve had since the onset of the financial crisis more than a decade ago. So, it was a big … Continued READ MORE
Budgets & fiscal events· Welfare Coronavirus and the benefits system: What support is available? 9 March 2020 by Karl Handscomb With the continuing increase in coronavirus cases, much of the current debate has rightly focused on Statutory Sick Pay (SSP). The Government’s announcement to extend SSP to day one of absence is welcome, but low earners and the self-employed are not entitled to SSP. This poses a challenge for protecting family incomes from the spread … Continued READ MORE
Budgets & fiscal events· Public spending· Inequality & poverty· Economy and public finances Is rising inequality helping to swell the coffers for Fortunate Phil? 12 March 2019 by Torsten Bell Fortunate Phil is not what the Chancellor generally gets called. But as he prepares for tomorrow’s Spring Statement, Philip Hammond – despite facing what looks like headline bad news – has at least some reasons to be grateful for good luck on both the economic and political fronts. The Treasury is gearing up for the … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances Hitting the books: student loans and the public finances 16 December 2018 by Matthew Whittaker With everything that’s going on in British politics right now, it’s easy to forget that the government was celebrating some seriously good news just seven weeks ago. You might remember that the Chancellor got handed a £74 billion fiscal windfall at the Budget that allowed him to deliver the long-promised extra spending on the NHS … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances Pessimism, Politics and Economics: the real Budget story 2 November 2018 by James Smith Debates following this week’s Budget have been dominated by political arguments about whether the Chancellor’s spending splurge means that austerity had been ended or lives on (our view: austerity was significantly eased but not ended). But another debate has been conspicuously absent this week, having dominated the UK’s political economy for the past eight years: … Continued READ MORE
Budgets & fiscal events· Labour market· Low pay Never mind the end of austerity, what about the end of low pay? 2 November 2018 by Conor D’Arcy While post-Budget debates on austerity and tax cuts rumble on, one clear living standards win on Monday was an increase in the National Living Wage (NLW). But beyond announcing the rate for next year, the government also used the Budget to set out a bold new aspiration that could have major implications: ending low pay. … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances The Budget marks a very significant easing – but not an end of austerity 30 October 2018 by Torsten Bell Marriages require compromise. So we shouldn’t be surprised that the reluctant political marriage between Theresa May and Phillip Hammond has delivered a compromise Budget. Caught between the Prime Ministers promise to “end austerity”, the wish to see debt falling, and the reality of the parliamentary arithmetic making significant tax rises difficult the Chancellor has taken … Continued READ MORE
Budgets & fiscal events· Housing Easing the housing headache: what the Chancellor should do in next week’s Budget 22 October 2018 by Lindsay Judge No doubt about it, housing is a headache for many young people today. The dramatic fall in the home ownership rates of the under-35s often produces the sharpest pangs for politicians (although as Chart 1 shows, we’ve seen a slight uptick in the proportion of young families owning in the last year or so). But … Continued READ MORE
Budgets & fiscal events· Economy and public finances· Tax The Chancellor may have one arm tied behind his back, but there are still tax levers he can pull 21 October 2018 by Adam Corlett How can a government with a tenuous majority, an intra-party feud and Brexit uncertainty find the money to ‘end austerity’ on top of more than £20 billion a year it has promised for the NHS? The safe bet is that it won’t find anywhere near all of it in the Budget. This can – like … Continued READ MORE
Budgets & fiscal events· Welfare Despite ‘the end of austerity’, April promises another deep benefit cut 17 October 2018 by Adam Corlett Today we learned just how deep the benefits freeze will be in its fourth and final year. In July 2015, having promised £12 billion of welfare cuts – reportedly on the assumption that the Liberal Democrats would argue this down – George Osborne announced exactly that. Chief among these cuts was a further working age … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances The OBR on Brexit: known-unknowns and unknown-unknowns cast shadow over the Budget 11 October 2018 by James Smith As if Philip Hammond’s job over the next few weeks wasn’t tough enough already, the Office for Budget Responsibility (OBR) this morning has published its thinking on how Brexit will make his life harder for many years to come. Already charged with “ending austerity” (which, as Torsten pointed out last week, is a stretch to … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances· Tax Is there enough fuel in the fiscal tank for another duty freeze? 3 October 2018 by Matthew Whittaker After eight years of freezes, it had started to look like successive governments’ cancellation of the annual RPI-linked uprating of fuel duty had run out of road. After all, it’s already costing the government around £9 billion a year, and that cost will grow with each passing year. But we now know that the Chancellor … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances Five charts to chill the Chancellor’s blood ahead of the Budget 28 September 2018 by Matthew Whittaker We now know that this year’s Budget will be delivered on 29 October, making it the first Monday Budget since 1962. The traditional Wednesday has been avoided, we’re told, to side-step negative Halloween-based headlines. Yet there’s still plenty of scary stuff for the Chancellor to deal with – from finding the £20 billion needed to … Continued READ MORE
Budgets & fiscal events· Public spending· Economy and public finances What Philip Hammond will say today: the deficit is dead, long live the debt 12 March 2018 by Torsten Bell Philip Hammond is going to give a very short speech at the Spring Statement today. There will be none of the tax and spending announcements we are used to when Chancellors rise to the Despatch Box. But short and largely announcement free as it will be, tomorrow’s speech will nonetheless represent something very significant for … Continued READ MORE
Living standards· Budgets & fiscal events· Inequality & poverty· Economy and public finances Should the Office for Budget Responsibility also forecast inequality? 2 March 2018 by Adam Corlett The strengths and weaknesses of economic forecasting are under scrutiny, perhaps like never before. How might GDP perform under different Brexit policies compared to a world with no Brexit? Is unemployment now likely to rise or fall? What will public borrowing in 2022 be? Whatever your politics, such modelling and forecasting is indispensable – so … Continued READ MORE
Budgets & fiscal events· Economy and public finances The Chancellor has coped with a huge economic downgrade, but the outlook is grim for families across Britain 23 November 2017 by Torsten Bell For his first Autumn Budget, the Office for Budget Responsibility has given Philip Hammond a truly catastrophic set of economic forecasts. After a decade of unrealised productivity forecasts, the OBR has now delivered the mother of all downgrades; all but halving its view of the UK’s capacity to grow. As a result it now expects … Continued READ MORE
Budgets & fiscal events· Low pay· Labour market· Economy and public finances The Autumn Budget 2017 brings worse than hoped for news for the low paid 23 November 2017 by Conor D’Arcy or many people, the big news out of November’s Budget – a massive downgrade in the outlook for productivity growth – will sound a bit abstract. The productivity downgrade has made the Chancellor’s task of balancing the books harder. But its impact on pay – with average annual earnings lowered by £1,000 – mean it’s even … Continued READ MORE
Budgets & fiscal events· Scotland· Tax Will the (Scottish) Budget raise income tax rates? 20 November 2017 by Adam Corlett With the UK Budget imminent, it’s important not to forget proposals released in Scotland earlier this month. These could lead to increases in income tax rates as soon as April, intended to protect public services and benefits in Scotland. This would be a departure from the usual direction of travel in the UK: there has … Continued READ MORE
Budgets & fiscal events· Economy and public finances It’s time to stop feeling sorry for the Chancellor – there’s no excuse for a do nothing Budget 20 November 2017 by Torsten Bell It’s all the rage to feel sorry for Britain’s Chancellor of the Exchequer. Philip Hammond is an unlucky man we’re told, having to prepare a Budget against a backdrop of a weaker economy, worse public finances and pressure to relaunch a government that’s had a tough Autumn. Those pressures are real, and no-one’s doubting that … Continued READ MORE
Budgets & fiscal events· Productivity & industrial strategy· Economy and public finances Hammond’s goal in this Budget should be to restart the productivity engine 20 November 2017 by Matthew Whittaker As a nation, we’re working smarter than we used to. A decade ago, for every hour we worked, we produced about £31.30 of stuff; today each hour of graft generates £31.85 of output. That sounds like good news. If we’re becoming more productive we should be able to treat ourselves to a pay rise, or … Continued READ MORE
Budgets & fiscal events· Housing Stamping it out? Housing in the Budget 17 November 2017 by Lindsay Judge It’s that time of year when we all read the runes from the Treasury in an effort to anticipate what will be announced in the Budget next week. We know the government is acutely aware that nothing ranks more highly with the disaffected young voter than the question of housing. Small surprise, then, that many … Continued READ MORE
Budgets & fiscal events· Economy and public finances· Tax All gain, no pain? – the Chancellor’s cunning tax plan 16 November 2017 by Torsten Bell British politics is odd these days. But even by current standards something very unusual looks set to happen in next week’s Budget. A basic rule of British politics is that tax rises tend to happen soon after a general election, with the Chancellor betting that we’ll all have forgotten about them when the next election … Continued READ MORE
