Onward Newsletter: Restoring economic stability

In this week’s newsletter:

• How has the U-turn affected the sterling?
• Is investment in the NHS the answer to economic growth?
• What threat does right-wing populism bear to the Conservatives?
• Onward’s upcoming event about pride and community with the EFL.

Micro-Budget. The new Chancellor, Jeremy Hunt, has announced that almost all of the tax cuts in his predecessor’s mini-Budget will be reversed and the Government’s energy package targeted from April in an emergency bid to calm the markets. The immediate reaction was positive: sterling closed yesterday up 1.59% and UK 10-year gilts fell yesterday from 4.13 to 3.97. The Chancellor also announced a new Economic Advisory Council, including Onward Advisory Board Member, Rupert Harrison.

Levelling Back Up. Grant Shapps argued that the major failing of the mini-Budget was that “it appeared to junk the central plank of our 2019 manifesto: levelling up”. This strongly aligns with new research published by Onward into “Levelling up in Practice” in Walsall in the West Midlands. Our key message: tackling entrenched economic weakness means putting power in the hands of local leaders and community groups. Tony Blair tried to level up Walsall from the top-down in the early 2000s, and it didn’t work.

Targeted help. The Government will target its support for households and businesses next winter (2023/24, instead of capping unit prices for everyone. This is what Onward’s 5-point plan for the energy crisis, published in early September, recommended. Depending on the level of targeting, it could reduce the taxpayer costs by nearly 50%, a saving likely to run to the tens of billions of pounds if gas prices remain high due to the Ukraine war. 

Plan for Growth. New research commissioned by the NHS Confederation claims every £1 spent on health generates £4 of economic growth. Low productivity and a tight labour market have been exacerbated by 2.5m Britons out of the workforce due to long-term sickness. Meanwhile the NHS treatment backlog has reached a record high. Although many parts of the NHS are clamouring for investment, the report suggests that investment in the primary care workforce would have the greatest economic value.

Nowhere to go. The rental market always seems to be teetering on the brink but reports suggest it’s now gone over the edge. In areas of West Central London inquiries have risen from an average of 16.1 to 86.5 per property. And problems are not confined to London. Advertised rentals have fallen in all 20 of the UK’s biggest cities and even in places like Sunderland, not usually thought to have a housing crisis, inquires have risen 10-fold since September 2019.

News and media

Effective spending reduction. Will Tanner spoke to The Times about reducing public spending without disrupting public services and wrote a letter in the same paper on Thatcherism. 

Onward and levelling up. Lisa Nandy highlighted Onward’s work on levelling up on BBC Radio 4’s Political Thinking Podcast with Nick Robinson.

Populism on the rise. Ed Malnick and Dominic Penna referenced Onward research on the threat of right-wing populism to Conservative leadership in the Sunday Telegraph.

Upcoming events

Football plays a central role in forging local pride but many smaller clubs are struggling. What can we do to protect them for future generations? Join our event this week with the English Football League to discuss.

With Jason Stockwood, Sarah Britcliffe MP, Tracey Crouch MP, Tom Greatrex and Rick Parry.

Sign up here.