Manchester Business School reaction to Autumn Statement

Ken McPhail, Head of Alliance Manchester Business School said:

“Today’s budget signals a shift in UK economic strategy in two ways. The energy profits levy, employers NI hike, minimum wage increases and VAT on private schools means the private sector and the better off will undoubtedly pay more. Supporters of Reeves will say that this reflects a focus on economic fairness needed to address the sense of disenfranchisement in many left behind neighbourhoods. Second, it’s a budget that prioritises public investment, for example in healthcare and education. It’s an approach that we’ve not seen in quite some time.

“Beyond the question of redistribution is, of course, growth and where it will come from. This is definitely a more interventionist government that doesn’t have the same faith in markets as its predecessors. The new National Wealth Fund, for example, will deliver funding to industries with highest growth potential.  However, more needs to be done here to link local pension funds with regional growth to drive investment into growth areas.  That said, positive announcements on devolution will increase the autonomy needed to more effectively coordinate local economic industrial strategy.

“Of course there was also a lot missing from the budget. Perhaps this was to be expected, however. Today’s budget is, after all, only a one-year budget settlement. The big budget decisions will follow the Spending Review process that will conclude in May or June next year that will set the spending envelope for the following three years.”