CapX, September 1, Professor David Paton
Plenty has been written about the cost of living crisis facing consumers. But the crisis facing British businesses is just as important for the incoming Prime Minister to address – and there is little time to waste.
In the past week trade bodies representing the pub and the takeaway food sectors have warned of mass bankruptcies if nothing is done to address the huge rise in energy bills and other costs.
How, then, should we address this urgent problem?
A new report from economists at the Centre for Brexit Policy (CBP) argues that the time is right for a widespread programme of tax cuts and supply side investments to keep the economy afloat during the next couple of turbulent years.
The conventional wisdom in the Treasury is that the parlous state of public finances requires short-term tax rises to avoid debt spiralling out of control. This attitude underlies the planned increases in Corporation Tax and National Insurance announced by Rishi Sunak when he was Chancellor. Part of the problem stems from the Government’s lockdown policies in 2020 and 2021, which saw the Treasury spending some £144bn paying people not to work and paying businesses to close down. It is hardly surprising that the Government now feels constrained in how much it can support businesses going forward.
Click here to read the piece in full.
Click here to read the report.