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NECC Column: Now is the Winter of our Autumn Statement
6:00am Wednesday 4th December 2013 in Business
GIVEN there will be less than three weeks to Christmas when George Osborne delivers his ‘Autumn’ Statement this week, I wonder if there is something wrong with the calendars in the Treasury, writes Ross Smith, NECC director of policy.
I would be surprised however if it isn’t abundantly clear on Thursday that he has spotted there’s a general election due in 17 months’ time.
From this year’s party conferences, when Labour leader Ed Miliband produced his policy to freeze energy bills, it’s seemed that our politicians have moved onto an election footing.
And it also seems that Mr Miliband has very effectively made the so-called ‘cost of living crisis’ the focus of the debate, ensuring that rising growth rates alone are not sufficient to win the economic argument.
So in his Budget next spring and the precursor we get this week, Mr Osborne will be under pressure to show that the Government is equally committed to helping household budgets, and has the ideas to make a difference before May 2015.
But there are dangers if the debate ends up entirely on those terms. Businesses may not vote in general elections, but we all need then to deliver a sustained recovery leading to more job creation and wage growth.
The cost of living crisis is matched by a cost of doing business crisis, and one aspect which badly needs to be addressed on Thursday is business rates.
This is just about the only tax that has continued to go up and up since recession hit, and due to the way rates are calculated it takes no real account of firms’ ability to pay or the impact on the economy.
Without a freeze now, and major reform in the future, costs such as these will suck up money that could be invested in growth.
Another danger is a focus on the short term. If we want to see wages rise over time, then skill levels, bringing greater productivity, will need to be raised. Further and more effective investment is crucial.
But British Governments are reluctant to get serious about skills because they will never see the payback within the five-year electoral cycle.
Still, if the Chancellor believes December is in the autumn, maybe we can convince him and his Westminster colleagues that the world will go on beyond 2015 and they would do well to consider issues wider than the latest campaign slogan.
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