Extending small business rate relief, cutting VAT on home improvements to 5%, agreeing service standards for HMRC and capping tax changes and costs are among the changes the Chancellor could make to help restore confidence in business, tax and public finances.
While the UK economy’s predicted growth next year is very encouraging, the Chancellor needs to ensure that the recovery is sustainable, its effects are felt across the whole of the country, and that the UK can compete effectively in the global economy in the years ahead.
At the same time, we know structural problems remain in the economy. Public sector debt stands at £1.21 trillion – more than 75% of UK GDP. This is unsustainable and we think the Coalition should be taking steps to reduce it now.
Finally, the Chancellor has a serious challenge framing the debate on the economy heading into the next election. The Coalition wants to define this around growth, Labour around the cost of living. Will people be talking about growth, or about the fact that growth is not reaching them? Can the Chancellor encourage the return of the feelgood factor next year?
Here are some suggestions we sent the Chancellor that we believe would help support confidence in business, tax, and the public finances:
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