Westminster’s eyes are moving onto housing as the election gets closer. While Gove waves the flag for his leasehold reform, the Centre for Policy Studies has been busy calculating how badly we’ve been doing on housbuilding in recent years. Now that net migration is at 1.1% of the population, a population equivalent to the city of Birmingham has arrived to the UK in the last two years. The housebuilding target for England remains set at 300,000 homes per year with an assumption of net migration at 170,500. At least the government have blown one figure out of the water…
The CPS has calculated England should be building 515,000 homes annually, 73% higher than the official target, and that we’ve underbuilt over the last decade by around 1.3 million homes. Meanwhile, the Adam Smith Institute has commissioned polling from JL Partners which manages to tease some support for building on greenbelt land out of the public. They’ve worked out that a policy in which a proportion of the profits from development from greenbelt land “goes back to the community” in some form has net support both among the general public and mortgage holders. The 18-24 age range is most in support, though monetary or “community” compensation will be needed to convince the public to build meaningfully. Prizes to be won for whomever can think up the right housing scheme to offer voters…
Wonk world has reacted to Hunt’s Autumn Statement, the general consensus from the free market think tanks being that there’s a few positive announcements, though not enough to be excited about. Guido gives you the run down…
The Institute of Economic Affairs’ Mark Littlewood welcomes the NI cut and permanent full expensing, though cautions that there is far more work to be done to reduce the tax burden and decrease spending. He called the statement “a step in the right direction, not a leap”…
The Taxpayers’ Alliance called the statement a “mixed bag” of good and bad news. Chief executive John O’Connell said, “Cuts to taxes for businesses and workers will be warmly welcomed, but the fiscal drag of frozen thresholds means the UK is still on track for an even bigger tax burden by the end of this decade.” Not a huge cheer from the TPA…
The Growth Commission points out that “while the cut in National Insurance Contributions by 2 percentage points will add 0.6% to GDP per capita after 20 years, it needs to be borne in mind that the freezing of tax allowances had already cost 1.3% of GDP”. Co-chairman Douglas McWilliams says the measures “are falling short of getting us out of economic stagnation”.
The Centre for Policy Studies welcome the permanent full expensing, something they’ve been campaigning for for many years. However, they warn against the decision to maintain the triple lock which “prioritises older people at the expense of younger workers”. Robert Colvile, CPS Director, cautioned: “The economy, and our long-term growth prospects, are still far from where they need to be.” Still much work to be done…
The Adam Smith Institute‘s Maxwell Marlow says “there is much to be positive about this statement“, praising the announcement of “a number of pro-business measures”. Though he cautions that Hunt will still need to “plan for public spending restraint”. The invisible hand will do its work…
The campaigners over at Stop the Taxi Tax say that Hunt’s pledge to consult on the 20% non-Black cab taxi VAT is “good news, but there’s no time to waste to stop this damaging tax“.
Director of Onward, Sebastian Payne welcomed the measures, saying, “Today’s Autumn Statement showed the best of moderate conservatism – combining bold measures to boost growth and slash taxes, with support for struggling workers and families.” Optimistic tone from the wets…
Douglas McWilliams, Co-Chairman of the Growth Commission says
“… there was little acknowledgement of just how high the public spending bill now is – and the impact such a large state has on the prospects for economic growth. My overall sense of this statement is that the Chancellor has taken a loaf of bread from the taxpayer and given us back a couple of slices.”
Not a full return to tax-cutting Tories…
Happy cost of government day! Yes today’s the day, after seven and a half months of hard graft on behalf of the Treasury, the state finally stops consuming all the money you will earn. This year’s date of August 15th is the latest Cost of Government Day* on record, meaning the state has cost more this year than in any previous year – even during the pandemic. Workers will see over 60% of their 2023 income paid to the state…
Cost of government celebrations come courtesy of research from the Adam Smith Institute. Their research director, Maxwell Marlow, said:
“This is an unsustainable situation, especially as poor private sector investment continues to cripple the long-run health of the economy… We need urgent fiscal reform. Taxes must be cut, regulations must be slashed, and we must free-up our sclerotic planning system to allow for growth and extensive housebuilding to give young people a fairer chance.”
If only we had a government willing to make supply-side reforms…
*Tax Freedom Day fell on June 18th with taxpayers forking out over £901.8 billion to the Treasury this year, 46.25% of net national income. Cost of Government Day, which factors in borrowing as well taxes, is today.
The revolving door at the Adam Smith Institute (ASI) will soon need oiling, with Director of Communications Connor Axiotes departing after just under five months to join AI startup Conjecture as their no doubt well-remunerated spin doctor. He’s being replaced by CCHQ political adviser and former Nadhim Zahawi press secretary Emily Fielder, who’s returning to the ASI after a stint as Head of Communications last year. Mimi Yates has joined the team as Director of Engagement & Operations. Congratulations both…
Three former Zahawi SpAds are now pulling the strings: Duncan Simpson has been calling the shots as executive director since February, James Lawson is the Chairman, and James Price has now joined as Director of Government Relations. Nadhim himself became a patron last month. The ASI recently gave their office a new lick of paint; they might need to rethink their branding soon too – does the “Nadhim Zahawi Institute” have a ring about it? On second thoughts the acronym might not work…
Meanwhile at the TaxPayers’ Alliance, Elliot Keck is being promoted to head campaigns, stepping up from investigations manager. He’ll still be firing off hundreds of Freedom of Information requests – co-conspirators will recognise a few of those – while also running the broader campaigns team. Lots of big changes in wonk world at the moment on right and left…
It’s all change over at the Adam Smith Institute. The top neoliberal think tank is having a major shakeup of its team, with Head of Research Daniel Pryor moving on to pastures new following the recent departures of Head of Comms Emily Fielder and Director of Strategy John Macdonald (not John McDonnell). Big roles to fill. That’s almost a complete turnover of their team…
Guido can reveal Madsen Pirie and Eamonn Butler have drafted in Duncan Simpson to steer the ship. Simpson previously worked as Chief Economist at the TaxPayers’ Alliance, along with a stint as a Treasury SpAd last summer. He’s taking over as the ASI’s new Executive Director. A known face in wonk world and a safe pair of hands…
Maxwell Marlow will return as the new Director of Research, having previously been the think tank’s Development Officer and Researcher before working at Hanbury Strategy. Connor Axiotes has already taken over as the new Director of Communications, joining from Richard Holden MP’s parliamentary office. Guido also hears rumours that long time Senior Fellow James Lawson, ex-Zahawi SpAd and Microsoft Defence CTO, will soon be getting more deeply involved in setting the Institute’s strategy…
With Hunt shredding almost the entire mini-Budget, the free marketeer wonks have released horrified statements as the Chancellor bins almost all the tax cuts Liz promised for the last four months. The only silver lining is that the energy support will now be means-tested. Other than that, it’s brutal…
The TaxPayers’ Alliance didn’t mince its words. Chief Executive John O’Connell put out a withering putdown:
“The light at the end of the economic tunnel has now been extinguished by this chancellor. Millions of hard-hit households who were desperate for an income tax cut are now facing many more months of financial misery. To get a grip on this crisis, the government needs to lay out a serious plan for necessary spending reductions, including means-testing energy support measures.”
The Institute of Economic Affairs is also critical of the scale of the U-turn, although the tweaks to the energy package were welcomed. Director-General Mark Littlewood said:
“The Energy Price Guarantee was always an unnecessarily expensive programme, representing the single biggest welfare scheme in British history. As many of us said at the time, it is absurd to subsidise wealthy households to keep heating their swimming pools. A more targeted approach from next year is warmly welcome and will save significant money… The risk of higher taxes is that they put Britain back on the path towards a high tax, low-growth economy. As Goldman Sachs warned yesterday, higher corporate tax rates could deepen any forthcoming recession and ultimately damage the government’s fiscal position.”
Likewise, the Adam Smith Institute encouraged No.11 to at least stay focused on supply-side reforms. Head of Communications Emily Fielder added:
“The Chancellor has said that there will be difficult decisions on tax and spend in the coming years as we move towards a more secure financial footing. But there is plenty this Government can do which doesn’t involve changing tax thresholds or spending pledges ––moving forward with supply-side regulatory reforms would boost economic growth and activity at a time when it is desperately needed. The decision to properly target the energy price guarantee from April is welcome…”
Hopefully Prime Minister Jeremy Hunt is listening…
