Former Chancellor Sajid Javid has teamed up with the wonks at the Centre for Policy Studies for a new report released today setting out proposals with two aims – to bounce back from the economic devastation wrought by the Coronavirus, and additionally to not just reconstitute the post-pandemic economy in the same way it existed before, rather to build a better one. In total there are 63 recommendations to implement… 

One major shift endorsed by the former Chancellor in the paper is a shift in focus for the Bank of England, from being tasked with targeting inflation, to targeting nominal GDP instead – shifting the bank’s focus to total spending in the economy, creating the best possible conditions for sustained growth. This is a currently fashionable idea which has it merits. Guido suspects it will be tricky to do… the Bank of England has not had many quarters where it has hit the inflation target,

Another proposal is for establishing a British Infrastructure Bank based outside the South East – an idea that was popular with John McDonnell. Guido can explain why private sector investment is not more evenly spread across the nation – investors are not convinced of the returns. Why not drop capital gains taxes for private investors in areas where infrastructure is wanted? Let the private sector take the risks and increase the rewards by relieving them of capital gains taxes. That reduces the probability of politically directed malinvestments.

Cutting employer’s National Insurance to get firms hiring again, reforms to planning rules (including fast-tracking reclassification of Green Belt), and a new generation of development corporations. Variations on policy proposals that always seem to be proposed and somehow never happen. Let’s see if an 80 seat majority overcomes the obstacles…