Government’s spending rules will make promises hard to achieve

The Labour government’s promises to improve living standards up and down the country risk being undermined by its strict spending rules, the New Economics Foundation (NEF) has warned.

Responding to the king’s speech, NEF said that the new government must be prepared to invest in the things that will provide people with the foundations of a good life if it wants to build a strong economy for all.

Hannah Peaker, director of policy at NEF, said:

“It’s welcome that the government wants to build a strong economy for the benefit of our people and public services, but it’s at risk of getting tied up in strict spending rules that’ll make this near impossible.

“It was a failure to invest in our people, public services, and national infrastructure that caused our economy to stall. Further stagnation would mean less tax revenue for the government to spend, with our schools and hospitals crumbling as a result.

“We need smart, bold investments to boost the economy and save us all money in the long run: renewables and home insulation will bring our energy bills down, a new generation of social homes will cut the housing benefit bill, and decent social system will stop people being pushed into poverty and support them into good work.”

Researcher Dr Abi O’Connor said:

“Greater devolution powers provide the opportunity to address the housing crisis locally, but this will be a missed opportunity without substantial funding packages to address both the housing crisis and the lack of money in local government.

“The lack of social homes specifically has caused this housing crisis. We can’t just rely on the private sector to fix things when they’re likely to prioritize profit over providing high quality affordable homes. And simply bulldozing planning regulations will not create communities where people can thrive.

“We need a new generation of social homes, alongside essential services, to provide people with the foundations of a good life. To achieve this, the government should commit to funding for councils who will build these homes and a proactive use of planning powers to ensure they are accompanied by vital infrastructure, including transport, GPs and jobs.”

ENDS

Contact

James Rush – james.rush@neweconomics.org 

Notes

The New Economics Foundation is a charitable think tank. We are independent of political parties and committed to being transparent about how we are funded.