Levelling up is unlikely under the Liz Truss government
The government’s levelling up ambition has probably been made more, not less, difficult by the new “Plan for Growth”. Policies of lower taxes, less regulation, and a smaller state are unlikely to have much beneficial impact on long-term growth at the national level, let alone in those regions with long track records of underperformance.
What you will learn:
- The government has announced some economic policies that will impact local areas, notably the creation of new Investment Zones. But the issues that they address are not those typically faced by underperforming areas. And although Investment Zones may cause jobs to be relocated from one place to another, boosts to entire regional economies seem very unlikely.
- We are similarly cautious about the likely impact of other policy plans or suggestions: the revived plans for Northern Powerhouse Rail; a mooted new Treasury formula for allocating government funds; greater power to local Mayors; and fast-track planning for infrastructure. These are likely to be held back by financial constraints or political pressures, or both.
- Meanwhile, the fact that the mini-Budget focused on tax cuts for the better off, while causing a sharp uplift in borrowing costs, not least for mortgages, promised to make levelling-up harder to achieve than it was before the announcements.
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