The recent Autumn Statement saw a huge number of tax and spending announcements including a range of tax threshold freezes, a new temporary 45% levy on electricity producers, and a freeze in many areas of public spending. Our academic experts share their views on how the measures will impact different sectors of the UK economy.
Transport and infrastructure
Graham Winch, Professor of Project Management
“The Autumn Statement was made against a miserable economic backdrop with combined headwinds forcing the government to introduce tax increases and spending cuts of major proportions. There is no doubt that we are all going to be left poorer.
“Any viable route out of the present situation will involve stimulating economic growth, and a central element of any growth plan is infrastructure investment, which drives growth directly by stimulating GDP growth through the multiplier effect, while enabling businesses everywhere to operate more effectively.
“For this reason, it was encouraging to see the Chancellor commit to the pledges made by his predecessors to deliver the core of the Northern Powerhouse Rail project, to the reduced HS2 rail line, and to the Sizewell C nuclear power station. However, more needs to be done to ensure our country reaches its growth potential, so it’s important that the government delivers on these promises, as well as on its commitment to deliver gigabit broadband across the country, and further investments in energy and transportation infrastructure.
“It’s also imperative that we boost investment in the construction industry’s ability to deliver home energy retrofits. Not only will this be key in accelerating our path to net zero, but it will also provide us greater protection through energy resilience, helping us to avoid a repeat of the surging prices experienced so far this year.”
Welfare and benefit support
Jill Rubery, Professor of Comparative Employment Systems
“It was a relief that benefits and the minimum wage will rise in line with or close to inflation, after much speculation that their real value might be eroded. It is worth remembering though that benefit recipients and minimum wage workers will have to wait until April to see these increases so they all face a very difficult winter before more help is provided.
“The Statement clearly confirms the reversal of policy direction since the mini-budget with more workers now being moved into the higher 45p in the pound tax bracket rather than the bracket being abolished. Income from capital assets is to be taxed more, and wider windfall energy taxes also implemented.
“All of this shifts the tax burden onto broader shoulders, but taxes are due to rise for the average worker too. This is happening not so much from measures announced in the Statement but due to earlier decisions to freeze tax thresholds at a time when no one expected the current high rate of inflation.
“Meanwhile I was pleased that the limited additional cash for social care is to be used to fund additional care packages rather than protecting the assets of higher-value homes. The announced 10% increase in the national living wage was also welcome, but it will not be implemented until April 2023 and is also insufficient to solve the problem that is causing massive bed blocking in the NHS.”
Health and social care
Lise Elliott, Senior Lecturer in Healthcare Management
“The financial issues facing health and social care will undoubtedly have an impact on the NHS’ ability to deliver quality and accessible care. While the funding announced in the Statement is welcome and provides some respite, it will do little in the short-term to address high staff vacancies across the health and social care system.
“It’s estimated there are currently more than 50,000 nursing vacancies across the UK. High workloads, and increased work-related stress and exhaustion, are only adding to the vicious cycle of shortages in the sector with the NHS increasingly reliant on locum and agency staff to deliver its services, which only adds to the financial pressures it faces.
“The announcement of an independent workforce plan is welcome but this will take time and, in the meantime - despite the Chancellor’s insistence to the contrary - frontline workers are likely to have to work harder. Increasing future budgets for health and social care, and tackling the recruitment and retention crisis, is critical for ensuring the quality of care across the NHS.”