Spring Budget 2024: Today's budget is likely to be another missed opportunity

Today is budget day in the UK. This is a critical moment in the UK political year and political process. For politicians and journalists budgets really matter. However, there is a paradox here in that for some households a budget is completely irrelevant. For these households, a budget might increase or decrease their disposable income by an insignificant amount. However, for other households, and those that are living close to the edge, a budget can be transformative. A budget can make matters much worse or provide some form of minor relief.

A budget is all about big politics and this is unfortunate. This is all about placing a political agenda at the centre of economic policy. This is the case for all countries and the outcome can too often be an ineffective budget. The UK, along with many other countries, has a long history of ineffective budgets or budgets that were missed opportunities. To me, the May 6 budget will perhaps be another missed opportunity. Now is not the time to focus just on tax cuts given the state of this country's national accounts and the need for enhanced expenditure on defence, especially on cybersecurity and defence against new types of weapons. However, whilst defence is important, the key is to focus on releasing some of the barriers that surround job makers. Too often the politics that surround a budget focusses on job takers rather than job makers and this is unfortunate. Politicians should focus on identifying and removing barriers that prevent people and firms from creating and maintaining job opportunities.

There is a very simple law that all politicians should proclaim every day. The vitality of a country's economy is based on three factors: population size, the proportion of this population that is involved in the labour market and productivity. All budgets should focus on this trinity and each of these factors is critical. I find it surprising that a country like the UK does not open its doors to economic refugees and migrants as this is part of the first and second factor. In addition, there needs to be a focus on public sector reform to release the transformative power of productivity. Thus, any assessment of this budget needs to focus not on the impacts on job takers but on job makers and the three factors that sit behind national prosperity.