Today’s statement contains 110 measures that are intended to grow the economy. There are two issues here. First, how many of these measures are directly linked to enabling responsible inclusive prosperity? Second, if these measures are so important, then why are these measures only being implemented now?
The 110 number is pure politics in action. According to the OBR, these measures will raise business investment, reduce inflation, and increase GDP whilst getting more people into work. These seem to be a magic set of measures. There is an omission here in that national economic growth is driven predominantly by consumption rather than investment. There is a tension here in that encouraging consumption could be inflationary. Nevertheless, consumption should account for around 76% of GDP and the share of growth accounted for by investment should rarely exceed between 32% and 34%. The UK government needs to encourage consumption but a new form of decarbonised or climate-friendly sustainable consumption. There is nothing in this budget that will encourage a new form of sustainable consumption.
This Autumn Statement contains a mixed bag of interventions but does not make a major contribution to shaping the wider framework conditions required to support sustainable economic growth. The Labour Party argues that it is time for a change in government and that they will forge a new future for the UK. Unfortunately, no UK political party has yet to project a vision and linked action plan, which would underpin an approach that would lead to responsible inclusive prosperity.
