Five Policies For Growth

We’d like to share with you a small number of policy proposals that could have a significant impact on the issues facing our country. All of them create growth in the economy and all of them benefit people, through reduced costs of living, more housing opportunities and more money in their pockets. While some of these measures pay for themselves, where investment is required it comes with business like rates of return.

We asked NIESR and CEBR to model the economic impact of these proposals and then NIESR modelled their combined impact. The results are quite profound.

NIESR found that the proposals collectively would raise this year’s projected GDP growth by 60 percent, worth over £18 billion - and reduce inflation by half a percentage point - with GDP growth increasing by double that figure (120%) a decade later, worth some £36 Billion a year. All of this comes with significant job creation and supply chain business opportunities.

The essence of these proposals is to:

- Transform our economy by reforming our energy market - to make it work for Britain. Creating the lowest possible energy bills and the most stable. This is a no cost policy. It would bring significant cost savings along with the lowering of inflation and the highest degree of insulation from global energy crises possible.

- Power public sector homes, going street by street, with a national solar program, sharing the benefits of the green economy with millions of people, knocking £500 off energy bills and providing a business-like rate of return on public investment. Also generating significant amounts of the green energy we need, without suffering the grid delays that beset major projects now.

- Restore the personal income tax allowance, almost completely, we’ve modelled the sweet spot for maximum benefit to those in the lowest 20% income bracket - that’s a £3k a year rise, putting £600 a year back into the pockets of hard working families. That creates significant growth, as well as tackling the cost of living crisis for millions of people - brings fairness into the tax system and results in a near half billion annual reduction in ‘in work benefits’. The cost is £20 Billion a year - and it can be paid for by the next policy.

- Follow the EU and Swiss banks and end the payment of interest to banks for their deposits. This will save us £30 Billion a year. We can fund the restoration of incometax allowance with this money - and have £10 billion in change. If we remove this artificial floor of interest for banks, they will have greater commercial incentive to lend to businesses and the public, and at lower rates - right now they earn 4% by lending nothing. This sets the floor for the rate they in turn will lend for.

- Solve our Housing Crisis with a national drive to build homes on brownfield sites, we found 1.4m homes possible, half of which already have planning permission. We can break the stranglehold of the private sector, the tightly controlled supply that keeps prices too high, boost housing supply and the opportunity for home ownership. Modelling by the CEBR shows the job creation, economic growth and ROI potential from such a ten year program.

We have studies, papers and the detailed modelling that supports this high-level summary, should you wish to look more closely and perhaps verify the opportunities we highlight here.