SMF responds to Autumn Statement 2023 – The Social Market Foundation
On the Chancellors tax measures, Sam Robinson, SMF Senior Researcher said: Todays cuts to National Insurance rates barely touch the sides of the tax increase from frozen thresholds, meaning they arent really a cut at all for many households. But these changes do represent a welcome rebalancing of personal taxes, shifting away from national insurance towards income tax, which covers a broader range of earnings including pensions and rental income.
Out of all the Autumn Statements measures, full expensing has by far the biggest potential to stimulate economic growth. But given the big price tag associated with the tax cut, and OBR projections that business investment will decrease as a share of GDP, it is vital that full expensing is rigorously monitored to ensure it is as effective in the real world as it looks on paper.
From a fiscal point of view, the tax cuts announced today are built on sand. Most of the headroom the Chancellor used to deliver them was based on departmental spending projections that seem implausibly low and that few people think can be met. To deliver good news today, Hunt may be kicking the bad news down the road.
On the neglect of skills and education, Dani Payne, SMF Senior Researcher, said:
Given the Chancellors ambition to build a world-class education and skills system, it is disappointing to see core school spending per pupil being held flat in real terms, and little else announced to support our young people.
The announcement of modest additional funding for apprenticeships is welcome, however it is unlikely that what the sector really needs is a new pilot scheme, as opposed to a whole-sale reform to bring together our post-secondary education systems, encourage growth in technical education and tackle the unproductive competition between HE and FE that leaves both sectors fighting for pupils and funding.
If the government is to truly grow the supply side of the economy, human capital and skills must be at the forefront of our plan for growth and schools, addressing funding and staffing crises to deliver the next generation of skilled young workers and help those already in work to upskill and retrain.
On measures for long-term unemployment, Jamie Gollings, SMF Deputy Research Director said:
The Chancellors 2.5bn for the long term unemployed, equivalent to roughly 1,500 a head per year, comes with the threat of mandatory work placements and benefits being removed if claimants dont engage. That will send a shiver down the spine of those off work with mental health issues and disabilities, causing them anxiety that could set people back in their recoveries and push them even further from the job market.
Most of those off work with mental health issues and disabilities want to get back into work, and the investment in such programmes is welcome. Working with employers to build forms of employment that can work around peoples conditions, from remote working to stress-freelancing, would help to create those routes. Better to do so with a supportive atmosphere that fosters rather than stifles recovery.
On support for business growth, John Asthana Gibson, SMF researcher said:
The Chancellor taking forward the Mansion House reforms is a positive outcome from todays Autumn Statement. Measures that put more cash from pensions funds deep pockets into growth hungry scale-ups should be encouraged, and the Governments intention to channel greater institutional investment through the British Business Bank, something the SMF has called for, should receive particular praise.
However, high growth business not only need to be well-financed, but well-staffed with talented and capable workers to succeed. A lack of human capital, not the financial sort, is the greatest barrier holding back companies in Britain today, and the Chancellors lack of ambition to develop the UKs skills base with significant investments in education and training will weaken the effectiveness of these measures.
On planning reforms, Gideon Salutin (SMF researcher) and Jamie Gollings (SMF deputy research director) said:
A permitted development right to convert single family homes into duplexes is a good idea on paper. Yet such measures have been tried in a number of cities, including Brisbane, Chicago, New York, and Toronto, without increasing actual housing supply because they were not combined with appropriate targets and strict regulations.
If the government really wants to increase housing supply, it will need to undertake more ambitious planning reform to fast-track large housing projects that maximise the number of units permitted on a lot, and twin this with tight affordability rules to ensure that new capacity genuinely drives down costs.
Other housing measures in the statement are similarly welcome, but not enough to address the crisis. 450m to the local authority housing fund to deliver 2,400 new homes is a drop in the ocean compared to the scale of social housing waiting lists, while faster processing times may speed approvals but fail to greatly increase stock.
On green investments, Gideon Salutin, SMF researcher said:
The Chancellors announcement of 4.5 billion through 2030 is a welcome move in the right direction, but is too small. By comparison, the US is pouring over 300 billion into green manufacturing, Japan is offering 120 billion in long term bonds.
Our research benchmarking global green investment shows that the UK would need to immediately budget at least 54 billion over the next ten years over 12 times the current offer to match peer countries. The Chancellor has taken a first step by acknowledging the problem, but until he makes larger commitments, the UK will remain a step behind.
On investment zones, Gideon Salutin said, SMF researcher said:
Todays announcement increased the number of investment zones and the length of time they receive subsidies, but failed to increase the money annually being transferred to local authorities. At present, investment zones receive just 16 million annually, increasing average local budgets by just 7.4% according to our research.
Local authorities outside London want to attract more investment, but to do so they need more startup cash. The 16 million cap is too small, and should be boosted by creating a larger funding stream for local authorities or by giving them new financial powers. Extending the program may help reassure private investors, but the major transformations the chancellor is promising cannot be achieved without deeper reform.
On public sector productivity, Niamh O Regan, SMF researcher said:
The UKs public sector productivity has been poor for over two decades, growing just 4% between 1997 and 2018, and so planning to grow this by 0.5% a year, while welcome, is very ambitious. There also appears to be a stark contrast between the Governments plan for boosting productivity in private and public sector.
The Chancellor said that productivity in other countries is higher due to investment, but this diagnosis seems to be limited to the private sector. The Government plans to improve public sector productivity, largely through adopting new technology, to cut bureaucracy and resolve administrative tasks faster for both the police and the NHS. Technology can help, but doing it well will require up-front investment in time and resources. Trying to do it on the cheap is bound to fail.
On support for small businesses, Richard Hyde, SMF Senior Researcher said:
A big impediment to smaller firms investing for growth is cashflow. Without adequate resources at hand investment in capital and workers by entrepreneurs in their small business has to be put off, again and again.
One of the most common and significant constraints on SME cashflow is late payment by customers. It has been estimated that half of invoices issued by SMEs are paid late. The problem has been worsening, with more than 23 billion outstanding and owed to small firms according to the Government in 2022. Research has suggested that as many as 50,000 firms could be going out of business each year because of the culture of poor payment practices in the UK.
The government wants an investment boom in the UK. To achieve that, it is imperative that small firms do not suffer from unnecessary cashflow problems. That is why the announcement in the Autumn statement to use public sector procurement to put obligations on contractors to pay their suppliers on time is welcome. However, it should only be seen as a start. Many businesses in the private sector are late payers too, and these will be unaffected by these measures. A more ambitious agenda is needed.
On the pensions pot-for-life, Aveek Bhattacharya, SMF Interim Director said:
Moving from an employer-led pension system to one where each individual has their own pot for life could help avoid the clutter and inconvenience that many of us have experienced from accumulating multiple often small pots from different jobs. More fundamentally, it could shift the onus for pension savings from bosses to workers, which has the potential to boost engagement, personalisation and value for money.
A forthcoming paper from the Social Market Foundation will explore these issues, and we look forward to informing the consultation announced today.
Contact
Read more:
SMF responds to Autumn Statement 2023 - The Social Market Foundation
- Marketing Execs Share TikTok Tactics and the Social Media They're Turning to Next - Franchise Times - May 28th, 2024 [May 28th, 2024]
- 5 of the Biggest Social Media Marketing Challenges - Influencer Marketing Hub - May 28th, 2024 [May 28th, 2024]
- Hochul pushes social media restrictions on youth while meeting with students - Spectrum News - May 28th, 2024 [May 28th, 2024]
- How health influencers Nadya Okamoto and Doctor Mike approach social media - MM+M Online - May 28th, 2024 [May 28th, 2024]
- Gasly fumes at Alpine intra-team clash in Monaco - F1 - The Official Home of Formula 1 Racing - May 28th, 2024 [May 28th, 2024]
- NFL Schedule Release: the Super Bowl for Ticket Sales, Social Media - Sportico - May 15th, 2024 [May 15th, 2024]
- Emplifi Earns Nine 2024 Top Rated Awards From TrustRadius - Martechcube - May 15th, 2024 [May 15th, 2024]
- Let them create: Social media marketing expert weighs in on working with creators amid potential TikTok ban - eMarketer - May 15th, 2024 [May 15th, 2024]
- Aki Technologies and @dudewithsign Partnership Promotes Elevated Social Marketing Standards - EIN News - May 15th, 2024 [May 15th, 2024]
- CP LAND Wins Asia's Best Social Media Advertising Campaign - Bangkok Post - May 15th, 2024 [May 15th, 2024]
- Social Media Market 2024-2030 Giants Spending is Going To Boom | Sprout Social, Brand24, Statusbrew, AgoraPulse ... - openPR - May 15th, 2024 [May 15th, 2024]
- Study: 55% of businesses plan to increase their use of AI tools in social media strategies - Marketing Interactive - May 15th, 2024 [May 15th, 2024]
- Fast facts: What's the social sentiment like as Lawrence Wong becomes PM? - Marketing Interactive - May 15th, 2024 [May 15th, 2024]
- Social Media Management Market is expected to reaching nearly US$ 98.49 Bn in 2030 As Revealed In New Report - WhaTech - May 15th, 2024 [May 15th, 2024]
- Using LinkedIn to Increase Your Sales - Social Media Examiner - May 11th, 2024 [May 11th, 2024]
- Using LinkedIn to Increase Your Sales - Social Media Examiner - May 11th, 2024 [May 11th, 2024]
- AI social media post generator and manger Unum saves time - Cult of Mac - May 11th, 2024 [May 11th, 2024]
- AI social media post generator and manger Unum saves time - Cult of Mac - May 11th, 2024 [May 11th, 2024]
- Op-Ed | How Long Will the Luxury Myth Last? - The Business of Fashion - May 11th, 2024 [May 11th, 2024]
- Op-Ed | How Long Will the Luxury Myth Last? - The Business of Fashion - May 11th, 2024 [May 11th, 2024]
- Social Stealth: The Art of Marketing Without Mentioning It - YourStory - May 11th, 2024 [May 11th, 2024]
- Social Stealth: The Art of Marketing Without Mentioning It - YourStory - May 11th, 2024 [May 11th, 2024]
- TikTok is first social media platform to label AI-generated content - Marketing Beat - May 11th, 2024 [May 11th, 2024]
- TikTok is first social media platform to label AI-generated content - Marketing Beat - May 11th, 2024 [May 11th, 2024]
- The Power of Influencer Marketing in Direct Selling: Leveraging Social Media to promote brand - Indiantelevision.com - May 11th, 2024 [May 11th, 2024]
- The Power of Influencer Marketing in Direct Selling: Leveraging Social Media to promote brand - Indiantelevision.com - May 11th, 2024 [May 11th, 2024]
- The Top 30 Social Media Influencers Worldwide - Search Engine Journal - May 5th, 2024 [May 5th, 2024]
- Global social media ad spend to approach 200bn in 2024 - Marketing Week - May 5th, 2024 [May 5th, 2024]
- 16 Of The Best Social Media Marketing Courses in 2024 - Search Engine Journal - May 5th, 2024 [May 5th, 2024]
- Heres what Bumble was teasing with its Renaissance art-themed Instagram posts - Ad Age - May 5th, 2024 [May 5th, 2024]
- LinkedIn Data Shows Social Media Marketing is the Most In-Demand Skill on the Platform - Digital Information World - May 5th, 2024 [May 5th, 2024]
- SEC charges Trump Media auditor with 'massive fraud' on hundreds of companies, imposes lifetime ban - CNBC - May 5th, 2024 [May 5th, 2024]
- Compliance makes social media healthcare marketing hard but creativity always wins - The Drum - May 3rd, 2024 [May 3rd, 2024]
- LinkedIn Updates: Short-Form Video, Premium Company Pages, and More - Social Media Examiner - May 3rd, 2024 [May 3rd, 2024]
- Humanizing Brands: How brands are creating authentic connections through social media - Adgully - May 3rd, 2024 [May 3rd, 2024]
- A2Z Media Celebrates Nissan Qatar's Award Wins for Marketing Performance and Social Media | LBBOnline - Little Black Book - LBBonline - May 3rd, 2024 [May 3rd, 2024]
- Social Media Analytics Market Sees Unprecedented Growth Driven by the Growing Influence of Social Media on ... - StreetInsider.com - May 3rd, 2024 [May 3rd, 2024]
- Executives from top Memphis-area social media firms weigh in on trends, AI - The Business Journals - May 3rd, 2024 [May 3rd, 2024]
- Master Social Media Marketing with Tips from Small Business Experts - Small Business Trends - May 3rd, 2024 [May 3rd, 2024]
- Influencer relationships (with consumers & brands) are evolvingwhat does that mean for marketers? - Sprout Social - May 3rd, 2024 [May 3rd, 2024]
- What is influencer marketing? Grow your market through social media - Simply Business knowledge - May 3rd, 2024 [May 3rd, 2024]
- The Rise of AI Influencers: Exploring the Future of Social Media - AutoGPT - May 3rd, 2024 [May 3rd, 2024]
- As TikTok ban threatens stability in social media ecosystem, some brands settle into the fediverse - Digiday - April 28th, 2024 [April 28th, 2024]
- Gen Zers in marketingwhy executives must embrace their ideas for social media success - Ad Age - April 28th, 2024 [April 28th, 2024]
- 9 Best Business Automation Software in 2024 - eWeek - April 28th, 2024 [April 28th, 2024]
- The 2024 Influencer Marketing Report - Sprout Social - April 28th, 2024 [April 28th, 2024]
- Why the U.S. Is Forcing TikTok to Be Sold or Banned - The New York Times - April 28th, 2024 [April 28th, 2024]
- Social media marketing strategies to avoid in 2024 - Android Headlines - April 28th, 2024 [April 28th, 2024]
- Time to Buy Meta Platforms (META) and Other Social Media Stocks as Earnings Approach? - Yahoo Finance - April 28th, 2024 [April 28th, 2024]
- A US TikTok ban could take a bite out of small businesses - BBC.com - April 28th, 2024 [April 28th, 2024]
- How Pastor Chad Nedohin Helped Turn Trump Media Into a Meme Stock - The New York Times - April 28th, 2024 [April 28th, 2024]
- Content That Triggers Massive Reach on Social Media - Social Media Examiner - April 20th, 2024 [April 20th, 2024]
- APA report calls on social media companies to take responsibility to protect youth - APA Psychology News - April 20th, 2024 [April 20th, 2024]
- AirChat Uses Voice Technology to Stand Out in Social Media Market - PYMNTS.com - April 20th, 2024 [April 20th, 2024]
- Gen Z is turning traditional marketing on its head, making social media their primary marketplace, entertainment hub ... - CXOToday.com - April 20th, 2024 [April 20th, 2024]
- Influencers Harness AI to Boost Fame and Fortune - PYMNTS.com - April 20th, 2024 [April 20th, 2024]
- Trump's social media company will go public after merger with shell company is approved - WDSU New Orleans - March 24th, 2024 [March 24th, 2024]
- Navigating the Uncharted Territory of Social Media Marketing - WebProNews - March 24th, 2024 [March 24th, 2024]
- YouTube Updates: Shorts Features, Creator Tools, Podcasts, and More - Social Media Examiner - March 24th, 2024 [March 24th, 2024]
- Reddit prices IPO at $34 per share in first major social media offering since 2019 - CNBC - March 24th, 2024 [March 24th, 2024]
- What Reddits IPO means for Redditors and what could change - The Washington Post - March 24th, 2024 [March 24th, 2024]
- Reddit shares priced at $34 in largest IPO by social media company in years - The Guardian - March 24th, 2024 [March 24th, 2024]
- How does Trump stand to make $3bn from Truth Social being listed on the market? - The Guardian US - March 24th, 2024 [March 24th, 2024]
- Supreme Court appears favorable to Biden administration in social-media case - MarketWatch - March 24th, 2024 [March 24th, 2024]
- Social media marketing alters the ad landscape with a focus on sustainability - Campaign Middle East - February 20th, 2024 [February 20th, 2024]
- Social Media Marketing In the Digital Age - MarTech Outlook - February 19th, 2024 [February 19th, 2024]
- Valentine's Day takes over in SG: Brands share their unique love stories on social - Marketing Interactive - February 19th, 2024 [February 19th, 2024]
- How brands are planning to navigate the social media & marketing landscape in 2024 - The Drum - January 16th, 2024 [January 16th, 2024]
- Driving Conversions With Hyperlocal Social Media Marketing - NeilPatel.com - January 16th, 2024 [January 16th, 2024]
- 13 Social Media Experts Offer Their Predictions For 2024 - Search Engine Journal - December 30th, 2023 [December 30th, 2023]
- Social T Marketing & PR Expands Team with 2 New Hires - The Valley Ledger - December 17th, 2023 [December 17th, 2023]
- Consumers to abandon social media but accept GenAI search results marketing survey shows - Moonshot News - December 17th, 2023 [December 17th, 2023]
- Dear companies, your social media marketing is tedious and it's cheapening your brand - The Peak Singapore - December 17th, 2023 [December 17th, 2023]
- Labour must straddle the education divide to achieve victory - The Social Market Foundation - December 1st, 2023 [December 1st, 2023]
- Public opinions and social trends, Great Britain: 15 to 26 November ... - Office for National Statistics - December 1st, 2023 [December 1st, 2023]
- Destinations weigh up impact of AI - PhocusWire - November 23rd, 2023 [November 23rd, 2023]
- Sociable: Will chaos at OpenAI benefit social media's AI projects? - Marketing Dive - November 23rd, 2023 [November 23rd, 2023]
- Big Bang Social & Comscore Partner to Revolutionize Creator ... - Adgully - November 23rd, 2023 [November 23rd, 2023]
- USF researchers help reduce lead levels in Madagascar drinking ... - University of South Florida - November 23rd, 2023 [November 23rd, 2023]
- 5 marketing lessons from the Taylor Swift and Travis Kelce romance - Kansas Reflector - November 23rd, 2023 [November 23rd, 2023]