Home

Today, Bright Blue, the think tank for liberal conservatism, is announcing that Ryan Shorthouse is stepping down as Chief Executive of Bright Blue after eight and half years leading the organisation. He will step up to become Executive Chair of the organisation in 2023.

Ryan Shorthouse, Chief Executive of Bright Blue, commented:

“Bright Blue is one of the UK’s leading think tanks today because of the talent, generosity and passion of so many people. Together, we have built a small superpower. We’ve published over 100 reports. Raised over £5 million for our work. Employed around 60 people. Hosted nearly 800 events. And, most importantly, seen the adoption of over 50 original Bright Blue policies by the UK Government.

“We make the weather on environment policy in the UK. We have been especially successful in persuading Government to make specific reforms to the immigration system since Brexit. We have ensured that those on modest incomes have benefited from increased opportunities and security – before, during and after the pandemic.

“It’s now time for a new chapter for me and for Bright Blue. It’s time to pass on the powerful and privileged role of CEO I’ve had for eight and half years to someone new. I’ve decided that the organisation needs fresh leadership, vision and energy. It will be an amazing opportunity for my successor to lead this brilliant organisation and team. They will have an unrivalled and unique chance to transform public policy and public attitudes.”

Sarah Sands, Former Chair of Bright Blue, commented:

“Ryan created Bright Blue on the principle that politics needs thought through policies based on imaginative thinking. He is an inspirational figure combining integrity, focus, rigour and kindness and it has been a great pleasure to work with him. I particularly appreciated his work on the green economy and social mobility. Public life needs Bright Blue more than ever and Ryan will hand it over to his successor in great shape.”

Matthew d’Ancona, Former Chair of Bright Blue, commented:

“Very few people have the intellect, ingenuity and determination to create a truly new engine of ideas – but Ryan Shorthouse is one of them. In Bright Blue, he has built a community and a laboratory of independent policy that is now a vibrant part of the think tank landscape. It was a complete privilege to work with him.”

Lord Willetts, former President of Bright Blue, commented:

“There are not many people who have successfully created a think tank from scratch. Ryan is one of them. Bright Blue is now established as an effective and influential voice in policy debates. Ryan can be very proud of what he has achieved over eight years leading Bright Blue.”

ENDS

Notes to editors:

• Ryan Shorthouse will remain the Chief Executive of Bright Blue until his successor is appointed and in position, which is likely to be at some point in 2023. The job advert for the new Chief Executive is here.
• Ryan Shorthouse will step up to become Executive Chair of Bright Blue in 2023.

For further comment or to arrange an interview please get in touch with Max Anderson: max@brightblue.org.uk or 07850 684474.

Commenting on the Autumn Statement 2022, Ryan Shorthouse, Chief Executive of Bright Blue, said:

“Britain seems to be going backwards. We are back in recession. Inflation is back to historic highs. We are back to an austere fiscal strategy. These economic woes are largely driven by global factors, but also in part by the policy decisions of Conservative-led Governments: the so-called ‘mini-Budget’ and Brexit, in particular.

“Most of the public are now paying higher taxes, higher mortgages and higher bills as a proportion of their household income. Since all this significant financial hardship is happening after twelve years of Tory rule, they are unlikely to forgive the Tories for yet another round of austerity. Even if there is no other alternative to the broad fiscal strategy that is now being pursued.

“Faced with such dreary economic forecasts, the Chancellor was right to set a plan to reduce the current budget deficit over the next five years, even if the fiscal rules have been softened somewhat. Since public expenditure is reliant on investment in government bonds, it is essential that the Government gets a grip on public borrowing so investors are not spooked.

“The new deficit reduction plan announced today is broadly well-balanced in terms of composition, distribution and timing. Unlike in the 2010s, spending will not be disproportionately cut, although from 2025 onwards the settlements will be particularly stringent, posing problems both for public sector pay and a probable Labour Government. Tax is playing a much greater role, with lots of fiscal drag affecting different types of taxes and taxpayers. The pain is indeed being widely shared, but with those individuals and companies with the broadest shoulders rightly bearing the brunt.

“The Government did miss an opportunity to shift the weight of taxation away from work on to wealth. It could have been bolder on Capital Gains, Inheritance and Non-Dom taxation, which could have softened the increases in payroll taxes.

“Prioritising public money being paid direct to individuals, especially the poorest, rather than through bureaucracies should be a clear overriding principle for a centre-right Government. That is why it was good to protect the value of state benefits and pensions in line with inflation. But promising yet more real-terms increases in funding for the NHS without substantial reform, only promising yet more reviews, is unwise and unsustainable.”

The 2022 Autumn Statement adopted two of Bright Blue’s policies:

• Increasing the value of state benefits in line with inflation

• Increasing the value of the National Living Wage in accordance with recommendations by the Low Pay Commission

Payments for low-income households

• Increasing benefits in April 2023 in line with inflation, which measured 10.1%

• Increasing the benefit cap in April 2023 in line with inflation, which measured 10.1%

• Providing additional Cost of Living payments in 2023-24, with a value of £900 for households on means-tested benefits and a value of £150 for those on disability benefits

• Extending the Household Support Fund for 2023-24 and providing an additional £1 billion of funding

• Increasing the National Living Wage by 9.7% to £10.42 an hour for those aged over 23

Anvar Sarygulov, Head of Research at Bright Blue, commented:

“The decision to uprate benefits in line with inflation is both great policy and good politics. Given the already historically low real value of benefits, and rampant inflation, many low-income households will need this increase in the next year to avoid destitution. Increasing the Benefit Cap in line with inflation alongside this ensures that households can receive an appropriate level of support given rising prices.

“The commitment to additional support for low-income households through the Household Support Fund and the Cost of Living Payments is also extremely welcome given the ongoing pressures they will be facing from inflation next year. This is what compassionate conservatism looks like in action.”

“But the Household Support Fund will now run for two and a half years, the Cost of Living Payments for more than one and a half. The ongoing need for such support, and the ongoing debates over uprating benefits in recent years, shows that the baseline level of state benefits is inadequate. The Government needs to design a systemic and robust way of setting benefit levels that corresponds with the cost of living.”

“The Government is also right to increase the National Living Wage substantially and in line with recommendations set out by the Low Pay Commission.”

Personal taxation

• Maintaining Income Tax and National Insurance thresholds at 2023-24 levels until April 2028

• Reducing the additional rate threshold for Income Tax from £150,000 to £125,140 from April 2023

• Maintaining Inheritance Tax thresholds at current level until April 2028

• Reducing the dividend allowance from £2,000 to £1,000 from April 2023 and then £500 from April 2024

• Reducing the annual exempt amount for Capital Gains Tax from £12,300 to £6,000 from April 2023 then £3,000 from April 2024

• Increasing the referendum limit for increases in council tax to 3% per year from April 2023. In addition, local authorities with social care responsibilities will be able to increase the adult social care precept by up to 2% per year

Sam Robinson, Senior Research Fellow at Bright Blue, commented:

“Extending the freeze on Income Tax and National Insurance thresholds, while reducing it for the additional rate, is a politically astute move. But the Chancellor could have extended more targeted help to those struggling this year by unfreezing the personal allowance to avoid more people on low incomes being dragged into basic-rate Income Tax.

“The changes to the Dividend Allowance and Annual Exempt Amount today are a welcome statement of intent to tax income from different sources more equitably. There is no reason why someone who earns their income from multiple sources should get a much higher effective tax free allowance than someone earning all their income from work. Today’s reforms narrow that gap.

“But the logic of taxing work less and wealth more could have been taken further, in particular by being bolder on Capital Gains Tax rates and reducing the scope of reliefs for Inheritance Tax. Doing so would have mitigated the need to increase payroll taxes, as well as softening the often sharp discrepancies in the way we treat different forms of income.

“Enabling local authorities to increase Council Tax without any attempt at substantive reform is timid policymaking. To keep squeezing revenue out of the current system when the basic design of Council Tax is so regressive is disappointing and punitive for those in lower-value homes. At the very least, the Chancellor should have announced a revaluation and reform of Council Tax bands to make them more progressive”.

Business taxation

• Extending the Energy Profits Levy until 31 March 2028 and increasing the rate to 35% from 1 January 2023

• Introducing a new Electricity Generator Levy with a 45% tax on excess returns from 1 January 2023 to 31 March 2028

• Setting the Annual Investment Allowance (AIA) at its highest ever permanent level of £1 million from 1 April 2023

• Freezing Business Rates multipliers in 2023-24 at 49.9 pence and 51.2 pence, preventing them from increasing to 52.9 pence and 54.2 pence

Sam Robinson, Senior Research Fellow at Bright Blue, commented:

“Extending the windfall tax by raising the main rate is good policy; it mitigates the need for more painful permanent tax rises on workers and businesses. But keeping in place the overly generous deductions for North Sea oil and gas extraction offers firms an easy way out of paying the windfall tax, which will reduce its fiscal effectiveness, and is the wrong priority for the environment.

“Low investment is one of the key drivers of the economic malaise we find ourselves in. Setting the Annual Investment Allowance at £1 million permanently is a welcome move which will give businesses additional incentives to invest in the resources that will set the foundations for future growth.

“Extending support through the Business Rates system will help small businesses to weather the storm over the next year. Over the longer term, the work started in this statement on the transitional relief scheme needs to be continued to ensure Business Rates are fit for purpose.”

Notes to editors:

To arrange an interview with a Bright Blue spokesperson or for further media enquiries, please contact Max Anderson at max@brightblue.org.uk or on 07850 684474.

• Bright Blue is the independent think tank and pressure group for liberal conservatism.
• Bright Blue’s Board includes Diane Banks, Philip Clarke, Alexandra Jezeph, Richard Mabey,
• and Ryan Shorthouse.
• Our advisory council can be found here. We also have 211 parliamentary supporters. Members of our advisory council and our parliamentary supporters do not necessarily endorse all our policy recommendations, including those included in this press release.

[Image: Gov.uk]

Bright Blue, the independent think tank for liberal conservatism, has today released a new report, entitled Work in progress? Supporting the self-employed after the pandemic, which unearths the experiences of self-employed individuals from low- and middle-income households during the pandemic, before suggesting new policies to better support them with the current cost of living and future individual and national crises.

The report is based on new and extensive analysis of 43 semi-structured depth interviews with a broadly reflective sample of self-employed people in gross equivalised low and middle-income UK households and public polling of a sample of 1,583 self-employed UK adults in equivalised gross low and middle income households.

Sam Robinson, Senior Research Fellow at Bright Blue and lead author of the report, commented: 

“With the cost of living crisis coming right on the heels of COVID-19, the self-employed have arguably never faced a tougher economic backdrop. Now more than ever, creative policies are needed to avoid an implosion in self-employment in the UK. 

“The Government needs to act in the short term by improving Universal Credit and doing more to protect self-employed people from sickness, late payments and emergency expenses. In the long term, the Government must seize the opportunity to build financial resilience and entrepreneurial opportunities for the self-employed by widening access to financial products and helping low income self-employed people to build their savings.”

Mark Pawsey MP, Member of the Business, Energy and Industrial Strategy Committee, commented: 

“With a difficult winter approaching, it is important that the necessary support is provided to those who need it, including self-employed workers. Therefore, I welcome this report by Bright Blue into the effect of the pandemic on self-employed workers. Its findings and recommendations provide some thoughtful and insightful suggestions which could potentially extend self-employed workers’ safety net and widen their access to financial support.”

Bright Blue’s main findings on the impact of the pandemic from our fieldwork include:

• A majority of self-employed individuals from low and middle income households changed the type of work they do as a result of the pandemic. Almost one in five (18%) of self-employed individuals in low and middle income households reported that they had ‘completely’ changed the type of work they do, while a further 50% (25% for each option) reported that ‘most’ or ‘some’ of their work had changed. 
• More self-employed individuals from low and middle income households experienced a decrease in their standards of living than an increase during the pandemic. 35% of self-employed workers reported a decline in their standard of living during the pandemic compared to 16% who reported an increase.
• The most common negative impacts on the general lives of self-employed people in low and middle income households were difficulty connecting with friends and family, and worsened personal finances. Both were cited by 26% of those polled. Almost one in five (19%) also cited deteriorating mental health as the single biggest negative impact of COVID-19 on their life. 

Bright Blue’s fieldwork also revealed the views of self-employed individuals from low- and middle-income households on governmental, commercial and personal financial support during the pandemic:  

• A majority of self-employed individuals in low and middle income households used governmental financial support during the pandemic. Such governmental financial support comprised the Self-Employed Income Support Scheme (SEISS, used by 22% of respondents), Universal Credit (UC, used by 25%), business grants (used by 12%), the Coronavirus Business Interruption Loan Scheme (CBILS, used by 11%), Bounce Back Loans (used by 10%) and deferred self-assessment (used by 8%). 
• There were issues with newly self-employed workers accessing support during the pandemic. 14% of low to middle-income households in our polling reported wanting governmental financial support during the pandemic but being unable to access it. The top two reasons for wanting but being unable to access governmental financial support were being too newly self-employed (33%) and being ineligible due to savings or income (32%).
• The self-employed from low and middle income households are divided on the taxes they pay and benefits they receive. A significant minority (41%) were in favour of raising taxes on self-employed people in exchange for more state support, whilst 32% of self-employed workers want taxes and state support to remain the same. Just 16% wish to see taxes decrease in exchange for less state support. 
• Most self-employed people in low and middle income households used their savings during the pandemic. 51% cited this. 30% also relied on family financial support and 16% relied on friends.

Bright Blue recommends the following policies to better support self-employed people through future crises: 

Support and encourage flexible savings

Introduce flexible auto-enrolment for the self-employed.

Government should extend private pension auto-enrolment to the self-employed. The overall contribution rate should be lower than for employees, starting at 1% of qualifying earnings before rising to 4% after four years. The self-employed should pay annually through their tax return, or quarterly through Making Tax Digital. Above and beyond such contributions being tax-free, low-income self-employed should receive a top-up from the state for their contributions.

Strengthen the safety net for self-employed workers

Introduce a ‘Business Crisis Loans’ (BCL) scheme available for self-employed people eligible for UC who experience a week or more of illness, late business payments, or an urgent one-off expense. 

Government would underwrite these loans to reduce risk to lenders. Claimants would, over time, have to pay the BCL back. The specific repayment terms should be subject to review, but government could allow repayments to be interest-free for a certain period, for example the first six months after claiming, after which interest would accrue on the loan. 

Financial incentives for Local Enterprise Partnerships (LEPs) to set up local community peer-to-peer finance networks for the self-employed.

These kinds of networks exist in Europe, particularly the Netherlands, in the form of ‘bread funds.’ Should LEPs demonstrate that they have successfully facilitated bread funds in their local area, and that this has helped self-employed people on low incomes or from other marginalised groups, a small amount of additional governmental funding could be awarded to them.

Widen and ensure access to financial support

Create a fund to provide starting £10,000 of starting capital for self-employed mutual insurance schemes. 

Mutual guarantee societies (MGSs) are groups of small businesses that support each other to access low-interest loans from banks by using their cash assets as collateral to guarantee each other’s loans. Government should create a fund for small businesses and sole traders – explicitly including self-employed people as well as SMEs – to access £10,000 of starting capital to set up a mutual insurance scheme. To strengthen confidence in MGSs, the scheme could be delivered by established Community Development Financial Institutions (CDFIs). A trial could be delivered using the Financial Conduct Authority’s regulatory sandbox. This fund would be open for a five year trial period and limited to 100 successful applicants only. 

Government should allow self-employed people on low incomes to pause repayments on their Start Up Loans (SULs) for up to six months across the lifetime of the loan. 

It should also regularly review the effectiveness of the SUL scheme by regularly monitoring and reporting longitudinal data on outcomes for self-employed people on low incomes. The government should work with key stakeholders that have access to the newly self-employed to design and enable greater mentoring support through the SUL programme. SULs should also not count towards the surplus earnings rule for self-employed people on UC.

A government-backed ‘finance portal’ for self-employed people and other workers

Government should develop a central online hub where self-employed people can review their financial pots. Self-employed people would be able to see the status of their assets – in particular, their auto-enrolled pension, as well as its linked ISA or savings account, and their liabilities: their outstanding balance for products such as Start-Up Loans and BCLs. The finance portal could also signpost self-employed people to support providers such as their Local Enterprise Partnership as well as commercial financial options, in particular invoice factoring and invoice discounting. 

Richard King, Director of Corporate Communications at Provident Financial Group, said:

“Provident Financial Group welcomes this research and insight it provides into how best to extend and enhance support to the self employed.  As a leading specialist bank focused on underserved markets, PFG has a keen interest in supporting a better understanding of groups, such as the self employed, who could benefit from better-tailored financial products, advice and public services.”    

Bright Blue, the independent think tank for liberal conservatism, has today published a new research report, Picking up the pieces: tackling littering and fly-tipping in England, analysing the recent rise in and current policies to tackle littering and fly-tipping in England, before recommending original policies to better help tackle them.

The report finds evidence which indicates that littering and fly-tipping has risen in England in recent years. The total number of fly-tipping incidents between 2018-19 and 2020-21 reported to local authorities increased by 18% from approximately 957,000 to 1,134,000. As recent Bright Blue polling from 2021 showed, the public consider fly-tipping and littering to be the third most significant threat to the country’s natural environment (25%), behind climate change (36%) and plastic pollution (40%).

The report identifies five different types of public policies, implemented both nationally and internationally, to tackle fly-tipping and littering: regulatory: punishments; behavioural: incentives; and educational.

Joshua Marks, Senior Researcher at Bright Blue and co-author of the report, commented:

“Fly-tipping and littering ruin neighbourhoods and cost the taxpayer millions to clean up every year. Littering ought to be a higher priority for both local and central governments. Ensuring that we enforce our current littering laws more forcefully is necessary to protect our high streets.”

Ryan Shorthouse, Chief Executive of Bright Blue, commented:

“If you want to restore civic activity and pride in local communities, a key aim of the Government’s levelling up agenda, then reducing littering is often a crucial step.

“The public are furious about fly-tipping and littering. This really is a major public policy problem, causing significant economic, environmental and social problems to communities across the country. It’s time to be tougher on litter louts.”

In the past, Bright Blue has proposed a number of policy recommendations to reduce fly-tipping and littering. These include: higher fines through Fixed Penalty Notices (FPNs) for littering; ring-fencing revenue from FPNs for local environmental purposes; and totally waiving the costs for DIY waste disposal at household waste centres, a policy which was adopted by the Government in April 2022.

This report goes further, proposing original and credible policies to tackle littering and fly-tipping:

Recommendation one: Task the Office of Environmental Protection with inspecting local authorities to ensure they are enforcing the law on litter and mandate the use of third-party enforcement services when they fail to do so. 

Many local authorities are failing to enforce the law on litter, or are doing so very lightly. A recent Freedom of Information request about how many FPNs they had issued on a weekly basis, 56% of those who responded had issued less than one FPN per week and 16% issued none at all.

Currently, there are no official inspections into whether local authorities are enforcing the law on litter, nor are there repercussions for failing to do so. The Office of Environmental Protection (OEP) should be tasked with inspecting local authorities to ensure they are applying the law on litter. Where they are failing to do so, the OEP should mandate the use of third-party enforcement services to apply the law on litter within a local authority’s area.

The use of such third-party enforcement services can be cost effective for local authorities as they can generate revenue from the fines they issue. This also incentivises third-party services to actively enforce the law on littering and issue FPNs.

In 2018, the 73 local authorities who employed private, third-party enforcement services to issue FPNs issued an average of 2,940 fines each per year. By comparison, the 230 local authorities who did not employ third-party enforcement services to issue FPNs issued an average of 157 each per year.

Recommendation two: Update National Highways’ Key Performance Indicators to include litter, with an accompanying ambitious target for reducing it.

National Highways are responsible for keeping the motorways and strategic roads under their management free of litter. But littered verges along motorways remain a common sight for motorists in England.

National Highways’ Key Performance Indicators (KPIs) focus on the activities and outcomes which are most important to the organisation, broken down into several different categories. One category is ‘Being environmentally responsible’, where KPIs include noise reduction, no loss of biodiversity, air quality targets, and a reduction in carbon emissions, but with no mention of litter. Instead, litter is mentioned as a Performance Indicator, but unlike KPIs, Performance Indicators are not seen as a critical measure which must be achieved and generally do not have targets.

National Highways should establish litter as a KPI. This would ensure that litter is treated as a critical measure which must be prevented, thereby embedding it within the strategic direction of National Highways. Furthermore, it should be accompanied by an ambitious litter reduction target for England’s motorway verges.

Recommendation three: Introduce imprisonment as a minimum sentence for those fly-tipping asbestos.

Currently, those caught fly-tipping face penalties ranging from unlimited fines and seizure of the vehicle used to commit the offence through to imprisonment, irrespective of the material being fly-tipped. Given the strong link between asbestos and mesothelioma – a form of cancer with an extremely high mortality rate – those caught fly-tipping asbestos should face imprisonment as a minimum sentence.

Recommendation four: Defra should re-establish the Litter Innovation Fund on a long-term basis with annual funding grants.

The Litter Innovation Fund ran for two years from 2018 to 2019 and gave £450,000 worth of funding to various charities and organisations to trial novel anti-littering methods.

Defra should re-create the fund on a long-term basis with new grants available annually for local authorities and other third party organisations for initiatives to effect positive behavioural change around littering.

After the Litter Innovation Fund has been evaluated to demonstrate efficacy and value for money, it should be committed to on a long-term basis with local authorities and third parties allowed to bid for grants annually.

Recommendation five: Establish a Litter Intelligence Programme within the National Citizen Service so young people can become UK ‘Citizen Scientists’

The National Citizen Service (NCS) is a government-sponsored voluntary initiative for 16-17 year olds where they engage with a range of extracurricular activities that include outdoor team-building exercises, independent living, and social action projects. Currently, the scheme offers placements during school holidays in spring, summer and autumn.

During the second week of the scheme the children “design and implement a social action project which will have a long-lasting impact in the local community.” While litter collection is already an option, the NCS should create a more formalised Litter Intelligence Programme mimicking that of New Zealand’s during the second week of the programme for student groups who choose litter collection as their social action.

The groups of students who choose to participate in this programme route in the NCS will be given a local area to adopt and then trained on how to collect data on litter. Once students have completed this one week course they can become labelled as Citizen Scientists or equivalent based on the level of training they received. Additionally, the data collection aspect of the training can be put on both their CVs, university applications, and if the scheme is successful form an additional source of litter data for national analysis.

ENDS

Notes to editors:

To arrange an interview with a Bright Blue spokesperson or for further media enquiries, please contact Max Anderson at max@brightblue.org.uk or on 07850 684474.

• This report is kindly sponsored by John Ellerman Foundation. Bright Blue has had complete editorial control over the report. The report does not necessarily reflect the views of our sponsor.
• Our advisory council can be found here. We also have 211 parliamentary supporters. Members of our advisory council and our parliamentary supporters do not necessarily endorse all our policy recommendations, including those included in this press release.

For further comment or to arrange an interview please get in touch with Max Anderson: max@brightblue.org.uk or 07850 684474.

Commenting on The Growth Plan 2022, Ryan Shorthouse, Chief Executive of Bright Blue, said:

“The Chancellor wants to send dramatic signals that Britain under a new Conservative Government is changing course and going for growth.

“The most controversial policies – cutting the additional rate of tax, corporation tax and the cap on bankers’ bonuses – are unlikely to have substantial economic effects, but they are politically potent: reinventing the Tory brand, winding up the Left and showing this Government unashamedly means business. 

“The dramatic tax cuts announced today show a steely determination to get money moving to catalyse economic activity, regardless of the starkly poor distributional effects. Balancing the books is now seen as a Treasury fixation that will become secondary to the aim of going for growth. The new Chancellor is borrowing big, basically. 

“This strategy is not particularly conservative; last decade, the Tories were all about fiscal discipline. But, with no qualms about tax cuts that will disproportionately benefit high earners and large companies, this Government is not especially socially democratic either. Most of the tax cuts could have been better targeted, as they were – admittedly – for today’s Stamp Duty cuts.

“There is real risk in all this radicalism. As interest rates rise, the cost of servicing government debt is becoming more expensive. The value of sterling has plummeted. If the historically high borrowing becomes seen as unsustainable, market confidence in Britain will fall and taxpayers will pay a painful price. There is a historical warning here: when the Conservative Chancellor Anthony Barber pursued a similar tax-cutting, growth-getting budget, inflation soon spiralled and Britain became the ‘sick man of Europe’ in the 1970s.

“After twelve years of running the country, the Tories desperately need to establish a record of delivery quickly if they want to cling on to power. Knowing this, the Prime Minister and Chancellor are going for broke.”

The Growth Plan 2022 adopted five Bright Blue policies:

• Planning constraints on onshore wind will be relaxed. 
• The rise in employers’ National Insurance Contributions, and the employer’s element of the Health and Social Care Levy, have both been cancelled. 
• The generosity and availability of the Seed Enterprise Investment Scheme (SEIS) will be increased. 
• The Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) will be extended.
• The Green Levy will be maintained but paid for via taxpayers.
• Stamp Duty was cut for nearly all first-time buyers.

Income Tax

• Abolishing the additional rate of Income Tax in April 2023.
• Cutting the basic rate of Income Tax to 19p in April 2023.

Sam Robinson, Senior Research Fellow at Bright Blue, said:

“Today’s cuts to Income Tax add yet more to the already enormous bill that the Government’s policies are racking up. There is at least a clear logic behind this: taxes on work should be cut. This principle is right. But when it comes to Income Tax, it would have been far better to do this by raising the starting threshold for the basic rate.

“Abolishing the additional rate will make Income Tax notably less progressive. The Government is betting that this will turbocharge growth to the extent that this doesn’t matter. But the assumption that this will substantially expand working hours and boost spending among high-income individuals is highly optimistic.

“The politicised and untargeted approach that the Government has taken on cutting Income Tax stands in stark contrast to the considered and targeted approach taken to cutting Stamp Duty. The Government should really be looking to maximise the economic benefit per pound of tax revenue cut, and it’s not at all clear that it is doing this with its reforms to Income Tax.”

National Insurance

• Cancelling the Health and Social Care Levy from April 2023.
• Cancelling the interim rise in National Insurance.

Sam Robinson, Senior Research Fellow at Bright Blue, said:

“There is nothing inherently wrong with cutting National Insurance. In fact, government should aim to reduce taxes on work as a matter of principle. But this needs to be done in a fiscally responsible and targeted way. A tax cut on this scale should be at least partly funded by changes elsewhere. What we currently have is a £13 billion giveaway that does little to help households most in need of extra money this winter, since earlier in the year the Government raised the Primary Threshold for paying National Insurance which meant that the lowest earning 70% of payers wouldn’t pay more as a result of the introduction of the Health and Social Care Levy. 

“Focussing on cutting employer NICs more deeply would be a better way than what has been announced today of reducing taxes on work, since it would help businesses by reducing staffing costs and support workers, especially the lowest paid, through increases to their pay packets or by creating more jobs over the long term.” 

Corporation Tax

• Cancelling the planned rise in the headline rate of Corporation Tax, maintaining the rate at 19% from April 2023.
• The temporary £1 million level of the Annual Investment Allowance will be made permanent from April 2023. 

Sam Robinson, Senior Research Fellow at Bright Blue, said:

“Cancelling the planned Corporation Tax rise is, ultimately, betting a great deal of foregone tax revenue on very uncertain economic gains. At a cost of £17 billion a year it comes with a hefty price tag. But the evidence that lower headline Corporation Tax rates spur business investment is, at best, mixed.

“It is also worth noting that, since small companies were unaffected by the planned rise in Corporation Tax, the changes announced today will mostly benefit larger companies.

“There are better policies for encouraging business investment. Rather than cutting the headline rate of Corporation Tax, the Government could instead move to the full immediate expensing of capital investment in new plants and machinery, enabling companies to write off capital expenses against their tax bill. This is a much more targeted way of achieving what the cut to the headline rate aims to do.” 

Stamp Duty

• Doubling the level at which all people begin paying Stamp Duty from £125,000 to £250,000.
• Increasing the level at which first-time buyers start paying Stamp Duty from £300,000 to £425,000.
• First-time buyers will be able to access relief when they buy a property costing less than £625,000 rather than the current £500,000.

Sam Robinson, Senior Research Fellow at Bright Blue, said:

“Today’s changes to Stamp Duty are certainly not without risk, but they are welcome. Stamp Duty is one of the most ill-conceived taxes in the country, so cutting it is a step forward in improving property taxes. This has, rightly, been paired with substantial and targeted support for first-time buyers – considering their affordability constraints, they need extra support to compete against property investors in the purchasing market.

“But changing Stamp Duty should be the start and not the end of the Government’s ambition on housing policy. In the absence of other policies to boost supply, cutting Stamp Duty risks raising house prices further, even when they have never been less affordable. Today’s cut needs to be followed up with an ambitious drive to increase the supply of housing, whether or not that involves targets from central government. And we cannot keep ignoring the meaningful and necessary reforms that should be made to Council Tax to ensure it is much more progressive.”

Investment zones

• Businesses in designated areas in investment zones will benefit from 100% business rates relief on newly occupied and expanded premises. Local authorities hosting Investment Zones will receive 100% of the business rates growth above an agreed baseline in designated sites for 25 years.
• Businesses will receive full stamp duty land tax relief on land bought for commercial or residential development and a zero rate for Employer National Insurance contributions on new employee earnings up to £50,270 per year.
• There will be a 100% first year enhanced capital allowance relief for plant and machinery used within designated sites and accelerated Enhanced Structures and Buildings Allowance relief of 20% per year.
• There will be designated development sites to both release more land for housing and commercial development, and to support accelerated development. The need for planning applications will be minimised and where planning applications remain necessary, they will be radically streamlined.

Sam Robinson, Senior Research Fellow at Bright Blue, said:

“If designed well, new Investment Zones could provide an effective Truss twist on levelling up. But investment zones are not a new idea, and the evidence on their effectiveness is mixed: to some extent, they relocate rather than generate economic activity.

“If anything, a better approach would be to take the best policy ideas from the proposed investment zones, particularly reforms to the planning system and enhanced investment allowances, and apply them more widely. These particular policies have the potential to energise businesses up and down the country, not just in specific areas.”

EU regulation

• Automatically sunset EU regulations by December 2023, requiring departments to review, replace or repeal retained EU law.

Sam Robinson, Senior Research Fellow at Bright Blue, said:

“Applying sunset clauses to EU legislation is a good idea to bring rigour and discipline to policymakers, and to make the most of Brexit. There is no reason why this approach shouldn’t be applied more generally, in particular to tax reliefs, which are incredibly expensive yet subjected to shockingly low levels of scrutiny. As with EU regulation, every few years tax reliefs should be subject to a concrete decision: review, replace or repeal.”

Welfare

• Increasing the Administrative Earnings Threshold to 15 hours a week at National Living Wage for an individual Universal Credit claimant (and 24 hours a week for couples) from January 2023.
• Strengthening the sanctions regime.
• Providing additional work coach support to new, eligible over 50s claimants.

Anvar Sarygulov, Head of Research at Bright Blue, said:

“Strengthening conditionality requirements for some people already in work will have a marginal impact on the labour market. It is inactivity, not underemployment, that is the main economic challenge. The increasing number of working-age adults not being able to work because of health issues must be addressed at the root of the issue, not by the time they start claiming benefits.”

Onshore wind

• Bringing onshore wind planning policy in line with other infrastructure to allow it to be deployed more easily in England.

Joshua Marks, Senior Researcher at Bright Blue, said: 

“A lack of any substantive onshore wind development since 2015 is bad for our energy security and sustainability. The current rules have allowed a single dissenting voice to obstruct plans and stop development. The Growth Plan’s commitment to changing this, so it is in line with the planning rules of other infrastructure projects, will energise onshore wind development and solidify our path to net zero. However, care must be taken to ensure that other environmental issues, such as the impact developments have on local habitats and biodiversity, are not sacrificed in the process.”

Green Levy

• The government will temporarily cover environmental and social costs, including green levies, currently included in domestic energy bills for two years.

Joshua Marks, Senior Researcher at Bright Blue, said: 

“The Government’s decision to fund the Green Levy through the public purse rather than scrap it from bills completely is welcome in order to continue our investment into green energy measures that support the poorest households. Making taxpayers rather than billpayers through a flat fee pay for it also makes the Green Levy much fairer.”

Notes to editors:

To arrange an interview with a Bright Blue spokesperson or for further media enquiries, please contact Max Anderson at max@brightblue.org.uk or on 07850 684474.

• Bright Blue is the independent think tank and pressure group for liberal conservatism.
• Bright Blue’s Board includes Diane Banks, Philip Clarke, Alexandra Jezeph, Richard Mabey,
• and Ryan Shorthouse.
• Our advisory council can be found here. We also have 211 parliamentary supporters. Members of our advisory council and our parliamentary supporters do not necessarily endorse all our policy recommendations, including those included in this press release.

[Image: Gov.uk]