Thread by @Miatsf

It feels to me that @RishiSunak needs some help getting the economy back on track.

Ahead of the autumn #budget2021, I've busted some economic myths he seems to believe...

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Myth 1️⃣ : We are well on our way to recovery with the fastest growth in the G7.

Busted: Our economy was one of the worst hit, so we are growing from a low base. The IMF says our economy is still 5% below its pre-pandemic path. & our economy is projected to lag behind all G7 countries in 2024.

Myth 2️⃣: We need to start balancing the books because we can’t afford to borrow any more.

Busted: Our debt level is high, but what matters is the cost of financing this debt. At 6% of tax receipts, the cost of servicing the debt is the second lowest it’s been since WWII.

We should be boosting it like Biden with a green and social stimulus to shore up the recovery, which will increase tax receipts and get borrowing down.

Myth 3️⃣: We have to balance the books by the end of the parliament.

Busted: We don’t. The @bankofengland bought up 99.5% of the debt the government borrowed during the pandemic.

The Bank of England is the most patient creditor the government could hope for. This buys us time to invest now & solve the myriad of problems with the economy.

Myth 4️⃣: Don’t choose to spend £ on the climate, and it won’t cost you.

Busted: Delaying investment in #ClimateAction will cost us dearly in money & lives. The @theCCCuk says we need to spend at least 1% of GDP on the #greentransition. The govt has so far committed only 0.01%.

Myth 5️⃣: The millions hit by the cut to #UniversalCredit will be helped by the rise in the national #LivingWage.

Busted: They won't. Around 5 million people are being hit by the cut to UC. Only 2 million will benefit from the living wage increase..

..And of those that benefit, tax rises and benefit cuts as they earn more mean they will only see their income go up by £250 each year. The Chancellor will need to do much more on the cost of living.

So, what should @RishiSunak be doing?

He needs to shore up our fragile recovery & protect the millions facing the cost of living crisis by:

🟢 Investing £90 bn/year in green & social infrastructure that creates jobs & helps the transition to #netzero whilst boosting the economy

🟢 Matching the national living wage to the REAL #LivingWage, which reflects the true cost of living.

🟢 Reforming the #UniversalCredit taper rate as @NEF has proposed so that people keep more in their pockets as they earn more - neweconomics.org/2020/10/lift-5…

🟢 Or go big & build a #LivingIncome within the social security system so everyone can afford the basics for a decent quality of life - livingincome.org.uk

The choices @RishiSunak makes today will make or break our recovery. Let’s hope he has the guts to make the right call.