Chancellor urged to invest £14bn in infrastructure
Government has been pressured to make a two-year £14bn investment in ‘shovel ready’ infrastructure projects by tax experts.
In their Autumn Statement recommendations, Ernst & Young ITEM Club claims that 0.5% a year could be added to GDP with such construction investment, improving the UK’s short-term economic growth in the face of – what it terms – excessively deep cuts to capital spending.
Infrastructure spending has dropped by £24bn since 2009/10, which, the report claims, has damaged the recovery of key sectors and reduced GDP by over 1.5%.
Ernst & Young ITEM Club has also urged the Treasury to expand the first buy home equity scheme and reinstate stamp duty holiday for first time buyers.
Ernst & Young ITEM Club expects that restrictions in the annual pension contributions relief and potential increases in the higher levels of stamp duty and Capital Gains Tax rates will be included in Wednesday’s Autumn Statement.
Discussing recommended infrastructure investment, Andrew Goodwin, senior economic advisor to the Ernst & Young ITEM Club, said: ‘The key to this policy is in finding projects for which all of the planning and logistics have already been completed, and where all that is missing is the funding to put the shovel in the ground. This could include numerous transport projects, in particular the roads, and also essential repair and maintenance work on our hospitals, schools and other public buildings.
‘We aren’t expecting any substantial changes to the direction to tax policy in the Autumn Statement. However there are two areas where the Chancellor needs to set out his thinking. The first is tax avoidance, which has been the subject of intense media and political scrutiny in recent months. The second big priority for the Government will be to demonstrate that “those with the broadest shoulders bear their fair share” of tax,’ Goodwin said.
We will learn tomorrow what & how much for capital expenditure. He has no room for manoeuvre, so it means cuts in the Public Sector, including Councils Maybe now many will start restructuring, to what we really need and can afford for the future First step is the building of Free Schools which sounds a good idea. As long as the dead hands of the LEA and Teaching Unions are kept out of itJ Smith, Added: Tuesday, 4 December 2012 08:12 PM
Osborne is very much of the Micawber moneynomics school where everything is subsumed to trying to balance the government books regardless of the negative effects on the economy. Lower expectations, but what are these as yet unnamed shovel ready projects? Ask councils - I expect they have plenty.Patrick Newman, ex local government, Stevenage, Added: Monday, 3 December 2012 04:34 PM
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