Tomorrow the Chancellor will deliver the newly downplayed Spring Statement, where he will outline the state of the nation’s financial health. It used to be a major fiscal event but this year Philip Hammond has made it clear he doesn’t want anyone getting too excited. There’ll be no red box, and he won’t speak for very long. Most of the time will likely be spent reacting to the latest update on public finances from the Office of Budget Responsibility. And there will supposedly be no new taxes or anything like that – just a few consultations perhaps. But the Government has also trailed the statement as a chance to look at some of the ‘long-term fiscal challenges’ the country faces. He is right that we are facing
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Tomorrow the Chancellor will deliver the newly downplayed Spring Statement, where he will outline the state of the nation’s financial health. It used to be a major fiscal event but this year Philip Hammond has made it clear he doesn’t want anyone getting too excited.
There’ll be no red box, and he won’t speak for very long. Most of the time will likely be spent reacting to the latest update on public finances from the Office of Budget Responsibility. And there will supposedly be no new taxes or anything like that – just a few consultations perhaps.
But the Government has also trailed the statement as a chance to look at some of the ‘long-term fiscal challenges’ the country faces. He is right that we are facing multiple challenges, on economic, social, and environmental fronts – and now would be the worst time for the Statement to hold back.
So, here are three deep and difficult challenges we at NEF believe the Chancellor should focus on. Here’s hoping Mr Hammond addresses at least some of them tomorrow:
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A decisive attempt to solve the housing crisis
The Spring Statement follows a week in which Theresa May pledged to make solving the housing crisis her personal mission. Although the proposed changes to planning were a step in the right direction, there’s been little sign of cheap land and government funding being used to build homes for rents that most people can actually afford. This is important not just because we have 9,570 homeless households languishing in temporary accommodation but because we need at least part of our housing system to be separate from the vagaries of the existing market.
For this reason, the Chancellor urgently needs to re-allocate a good deal more of the £44bn of government money away from supporting a broken market and towards building homes for those that need them most.
Sara Mahmoud, Senior Economist
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A holistic approach to health and wellbeing
We know we’re at a tipping point when a former Conservative minister says that the age of tax cuts is over. After eight years of austerity, with our NHS and social care system creaking, David Willetts is calling for properly funded public services. Better late than never.
Willetts argues that Baby Boomers should foot the bill. While he is right to make the case for a wealth tax, this is the wrong frame. Health and social care are not just for older people: we all rely on the NHS and many of us, no matter our age, depend on social care too. If we are to build a sustainable system, we need a new ambition that is shared across the generations. Why not set our sights high and aspire towards an integrated National Health and Care Service funded by taxation and free at the point of use?
But this is just one part of the picture. Our health and wellbeing do not just depend on good health and social care. They are shaped by the infrastructure of our everyday lives, and require adequate housing, sufficient income, quality education, decent jobs, strong communities and a sustainable environment. If the Chancellor is serious about addressing long-term challenges to our economy, then he must put health and wellbeing at the forefront of all of his plans.
Sarah Bedford, Social Policy Lead
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A green plan that lives up to the Government’s rhetoric
This is a Government newly flush with green rhetoric. Younger voters demand swift and rapid action on air and plastic pollution, nature restoration, and climate change. Like the rest of his colleagues, Mr Hammond will have got the memo.
The Government has already taken a few baby steps towards addressing the myriad environmental challenges we face: from the strategic – such as the very welcome embedding of ‘clean growth’ within the industrial strategy – to the practical – like cutting car tax for electric taxis.
But it’s not enough to tinker a bit. Nor is it enough to set targets for a very long time into the future then look hopefully in the direction of global capital to meet them – as with Mrs May’s promise of an end to ‘avoidable’ plastic waste by the year 2042, and Michael Gove with his 2040 diesel and petrol ban.
On climate change alone, we still have a financial system stuffed to the gills with high-carbon kit, exacerbated by ten years of quantitative easing that pumped new cash into old-hat polluting infrastructure. While renewable energy is forced to scrape and bend for every shred of support it can get, our economy remains riddled with fossil fuel subsidies – like tax breaks for frackers and oil producers. And there is precious little help – rhetorical or in terms of cold hard cash – for dangerously exposed workers in the fossil fuel industry to help them cope with the inevitable shift to a decarbonised economy.
David Powell, Environment Lead