On Monday 6th July 2020, Onward launches its latest research report: Bounce Back.
This report by Mats Persson, Adam Memon, Raoul Ruparel, Tim Pitt, Will Tanner and Neil O’Brien MP argues that the extraordinary nature of the pandemic and the UK’s longstanding structural weaknesses demand a radical and urgent response from the Chancellor.
The recommendations in the report include:
- Introducing new fiscal rules that delay the Conservative Manifesto pledge to have debt falling as a share of GDP to 2024, but maintaining the Government’s commitment to keep debt interest below 6% of GDP.
- Sweeping tax reform now to ensure borrowing is brought under control equitably and without harming growth. This means reviewing the 1,100 tax reliefs that exist, focusing tax rises on accrued wealth, including by revaluing council tax, removing distortions in the tax system, for example those that favour large digital firms, and announcing a long-term review of the tax treatment of debt and equity financing. Any immediate tax cuts should be focused on cutting the cost of employment through reducing the burden of employer NICs, rather than a VAT cut aimed at boosting consumption.
- Establishing a new Restructuring Agency, modelled on the Industrial Revitalisation Corporation of Japan, to manage the estimated £30 billion of government-guaranteed loans that are expected to go bad and ensure the high levels of corporate debt generally do not become a drag on investment and the economic recovery.
- Investing £30 billion directly into high growth companies, such as the British Business Bank, British Growth Fund and British Patient Capital, using convertible loans that can be turned into equity if not repaid, to ensure firms can assess capital to invest without just taking on ever more debt.
- Rapid action to prevent labour market scarring, by hiring 13,000 Universal Credit work coaches, targeting job subsidies on absorptive sectors and guaranteeing every young person a chance to earn, train or serve their community.
- Establishing a new Right to Retrain for adults, including a £50,000 repayable loan, available to all adults without a degree at any stage of their career for full and part-time students, funded via the National Skills Fund.
- Double Further Education funding and launch a radical wave of reform of the sector to give colleges five years of funding certainty, improve take up of higher value subjects and to rationalise qualifications.
For media inquiries please contact Will Tanner at will.tanner@ukonward.com
