Response to the Autumn Statement 2023
Think tank: National Institute of Economic and Social Research (NIESR)
Author(s): Various authors
November 22, 2023
This short briefing from UK think tank the National Institute of Economic and Social Research provides a response to the Autumn Statement.
The Chancellor delivered his Autumn Statement against a background of sluggish growth and above target inflation.
NIESR continues to maintain that fiscal policy ought not to be guided by arbitrary fiscal rules but, rather, should be set to bring to the forefront distributional concerns, productivity, well-being, ecological sustainability, and consistency across the devolved nations and English regions. It is the job of fiscal policy to boost growth and provide a cushion for the most vulnerable households.
Consequently, NIESR has been arguing for some time that government should focus on increasing public investment to at least 3 per cent of GDP per year, which has a higher return than tax cuts and will help unlock business investment. We believe that extending financial incentives for free ports and investment zones will help generate some growth, and further devolution deals are also welcome.
But the problem is a lack of scale in public investment and a failure to have targeted industrial and skills policy. Levelling Up as it stands will not reduce regional inequalities in a significant, sustained manner.