As the dust settles, so many questions flowing from the budget. How can it be that living standards are stagnant for 20 years? What is the plan to fix it? What will the consequences be? What, in that context, does levelling up mean? It's the central feature of British politics.
https://twitter.com/lewis_goodall/status/1453486183586091017
Much for policy makers and politicians of the last decade or more to reflect and ask what their role has been and how it might have been different. It's a staggering phenomenon.
Resolution Foundation: "In the 16 years leading up to 2008, average earnings grew by 36 per cent; in the 16 years following 2008, real wages are forecast to have risen by just 2.4 per cent in total. The country is still in the weakest decade for pay growth since the 1930s."
Government has identified the key challenges- to boost productivity (stagnant), thereby boost growth (anaemic for a decade) and address terrible spatial inequalities across the country. If you can do all that you can address one of the central problems for the public finances...
...long term, an ageing society with more and more of the state's discretionary spending gobbled up by health. The Q is whether the government's plans to address those problems will work- or indeed, whether those plans even exist properly yet-eg levelling up remains amorphous.
And indeed where those plans are enunciated (limiting immigration to boost productivity) that they might be antithetical to the overall aim (OBR said yesterday no evidence limiting labour supply boosts productivity). All this has to be done whilst making up for growth...
...losses from the pandemic and bigger ones from Brexit (identified also by OBR). Limiting immigration would also make the long-term ageing population problem more acute. And education spending will remain below 2010 levels for another five years, another prob for productivity.
It's a profound challenge and one way or another basically haunting our politics, even if we don't always discuss it directly.
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