The Chancellor and growth
By johnredwood on January 24, 2025
Today in my lecture at 11 am at All Souls College and on zoom I will set out a range of policies that could boost growth in the UK. I will not have time to discuss the current conflict within the UK government. between the pro growth Ministers and the Net Zero Secretary.
The Bank of England response to the Chancellor’s call for Regulators to help with growth was interesting. The said if the government removed the need for them to promote green investment and promote anti climate change policies and loans the economy would grow faster. Through the PRA they regulate commercial banks and need currently to worry about the balances of lending vis a vis decarbonisation.
The PM and Chancellor have promised to speed up planning permissions for investments in everything from grid pylons to datacentres. Quite often delays and even refusals result from the ability of environmental campaigners to object on net zero, wildlife and landscape grounds. They are thinking of limiting this.
Several airport expansion plans have been delayed or shelved under an environmental imperative. The Chancellor is reported as wishing to override these. The UK needs more international travel capacity to boost trade and investment as well as to grow the holiday business.
Will the government make these changes and tell Mr Miliband to live with that reality? Will President Trump’s priority for growth over net zero have any influence?
John Redwood
Express sees more Labour tax rises
Rachel Reeves is likely to go back on one of her main promises within the next year according to economic experts.
The Chancellor followed up her record-breaking, tax-filled budget in October with a vow not to increase taxes for the remainder of the parliament - but faced with economic stagnation many analysts believe that she will be left with no choice.
In fact one has even predicted that more tax rises could come as early as her next budget in October.
Elliott Jordan-Doak, from Pantheon Macroeconomics, said: "The chancellor is already under pressure to clarify how the government will meet its new fiscal rules.
"We expect the government to outline spending reductions - backloaded towards the end of the forecast year - at the next fiscal event in March.
"Further tax increases at the next budget in October, is also a good bet."
The rising cost of government debt and the falling value of the pound in the wake of Reeves's budget leaves her with little breathing space as she attempts to fund her plans for growth.
Many experts believe that the poor health of the British economy will leave her with no alternative but to decrease public spending, raise taxes or enact a combination of the two.
Reeves risks economic 'doom Loop’ Ex-Bank of England chief economist Andy Haldane said the UK is at risk of entering an economic "doom loop" if spending continues to be cut.
Mr Haldance predicted that the Office for Budget Responsibility's March forecast could be the catalyst for the UK's spending plans to be slashed.
He told Sky News' Politics Hub with Sophy Ridge: "It would be deeply counterproductive to both growth and to the fiscal position if that led to a cutting back on investment and indeed in spending more generally.
"Then I think you really are into a doomed loop between debt and growth. And that's a situation to avoid at all costs."
Buy Garden Brush & Pan Now - Brush & Broom Specialists thedustpanandbrushstore.co.uk Buy Garden Brush & Pan Now - Brush & Broom Specialists Ad He added: "For me, I think some of the gloom and doom about both the economy and in bond markets is slightly overdone.
"I think once we get to the second half of the year, the underlying fiscal picture may look somewhat better as might be the underlying growth picture.
"So anything precipitating now, I think, is best avoided."