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Few dispute the fact that the UK system of childcare is broken. Although around £5.4 billion on childcare, and £3.8 billion on childcare places, is being spent every year on supporting the sector, it remains financially crippling for parents, inflexible, difficult to navigate and there are insufficient places available for those who could benefit. To give a sense of the scale of the problem, a middle-income household will spend nearly 30% of their after-tax income on childcare but only about 5% of their income on energy after housing costs.
Judging by the response yesterday, much of Westminster was surprised at the scale and design of the Chancellor’s cost-of-living support intervention. In political terms, the initial signs are that the Chancellor got it right.
£15 billion was announced yesterday, on top of the £22 billion announced in January, meaning the total cost-of-living intervention amounts to £37 billion, an extraordinary intervention amounting to about 1.6% of GDP.
Ministers have an opportunity to cut taxes, drive supply side reform – and help reduce the cost of living
“My Government’s priority is to grow and strengthen the economy and help ease the cost of living for families.” These opening two lines of the Queen’s Speech provided a powerful message.
Further action is needed to address the cost of living crisis. Also, those affected are not just families, but the vast bulk of households that are being squeezed. If the Government doesn’t appreciate this, then it may have its work cut out.
The Bill covers a huge range of policy space, similar to the Levelling Up White Paper tabled in February. In fact, many of the proposals are those put forward in the White Paper. For example, there will be a requirement for the Government to release annual reports on the Levelling Up “missions”, creating a framework to devolve power through ‘devolution deals’ in every part of the country by 2030, and greater local input in planning. The Government will also use the bill to reform how local infrastructure is funded by a new “infrastructure levy” which will give local communities more input in how the money is spent, compared to the existing Section 106 process.
This week sees the Bank of England celebrate 25 years of independence. Quite rightly, the current rise in inflation has raised questions about whether it is time to reassess its remit and governance.
There has been a rise in inflation across western economies. That this is more than a UK issue should not divert attention from where the problem lies.
Related Content Rishi Sunak needs to provide context, actions and vision when he delivers his Spring Statement to the House of Commons this week.Context, so that people can understand the present difficult economic environment and what lies ahead. Actions will be...
Rishi Sunak could not have guessed what was in store for the economy when he became Chancellor a little over two years ago. One thing is certain now: he could be one of the most consequential chancellors in the post-war period.
Faced with Covid-19 and now a land war in Europe, Sunak now has to deliver a Spring Statement; what was once intended to be a smaller intervention has grown in importance in the face of yet another geopolitical crisis.
“We are inflicting devastating economic pain”. That’s how the Foreign Secretary introduced the UK’s sanction package last week.
On Monday this week, the Chairwoman of the Bank of Russia, Elvia Nabiullina – a woman famous for sending coded messages about the economy by her choice of dress and brooch – appeared in full black to announce a more than doubling of the interest rate, from 9.5 percent to 20 percent.
Rishi Sunak’s Mais Lecture last week was filled with references to all the people one might expect from a Conservative Chancellor. From Adam Smith to Thatcher, it was a who’s who of free-market luminaries.
The last week has been an important one for the City and UK financial services.
First, the European Union extended its self-imposed limit on EU banks and other financial institutions being able to clear trades through the City, beyond next summer.