Bradshaw Advisory

Great to see ChamberlainWalker Economics re-appointed to the Homes England Strategic Research, Economics and Evaluation Framework 2024-2028. We're looking forward to supporting them on delivering the research and analysis to help push vital housing projects forwards. https://lnkd.in/e9e4u5zk

Great to collaborate and support CBRE on this very important piece of work with our policy, economics and public affairs expertise.

The budget was an old school Labour budget, a dramatic departure from Keir Starmer’s initial promises of a Government that ‘treads lightly on people’s lives’. The new measures will rapidly expand the state’s role, hoping to sustain public services and support long-term investments, within a redefined economic framework. Here’s three reasons that show how rapidly they are expanding the state in the hope to support public services and investments: 📈 1. With tax revenues anticipated to reach 38.2% of GDP by 2029, the UK is moving toward the highest tax levels on record, edging closer to European norms. 💷 2. Over the next five years, spending will rise by an average of £70bn annually, with half of this expanded spending to be financed through additional borrowing. 🇬🇧3. Government activity is set to account for 44% of GDP by the end of the decade—5% higher than before the pandemic, signifying a considerable shift in the role of the state.

A great team away day to Berlin to discuss our exciting plans for next year and how we continue to deliver a great quality service to our clients. Interesting to be there on the day that the German government collapsed. Largely hidden and ignored by the press with all the coverage of the USA but still very significant to Europe and the UK.

📈 Labour’s number one mission is to get the UK to be the fastest growing economy in the G7, how’s that looking after the budget? Here’s three reasons why the OBR’s forecasts do not look promising... ⏫ 1. Growth rates over the next couple of years have been uprated against their March forecast, to 2% in 2025 and 1.8% in 2026. But these  are only temporary sugar-rush increases, driven in part by better-than-expected macroeconomic conditions, but mainly by increased government consumption up until the end of the spending review period.  ⏬ 2. Boosts from this planned spending are then expected to dissipate within a couple of years, and the inflationary impacts of the initial boost will lead to a downward correction in growth rates. The contractionary impacts of tax increases are forecast to add to this, leaving growth forecasts at 1.5% by the end of the decade - just below what was forecast in March of this year! 🐣 3. This puts the predictions of growth towards the end of the forecast behind what they were at the Spring Budget! Essentially meaning things will be going backwards… 🌹But fear not! The OBR’s forecasts are not infallible. And fiscal policy is not actually what Labour are hoping will drive growth in the long-run. Reevesonomics leans heavily on supply side measures, often driven by reform rather than spending. These kinds of policies are extremely tricky for the OBR’s modelling to pick up on. So Labour do have a few other tricks up their sleeve to go for growth in the years ahead.

Labour loses elections when it's not trusted on tax. Their manifesto reflected that, ruling out 75% of the total tax take (NI, Income & VAT rates) in favour of highly political, ‘anti-Tory’ propositions like non-doms and VAT on private schools that actually offer limited returns in the harsh reality of government. So this Budget was about tough choices and trade-offs in tax and spend to fund the ‘change’ Labour promised in July to get Britain building and fund public services. Rachel Reeves blamed it on a £22bn ‘surprise blackhole’ and increased the state's take by £40bn - the largest in over 30 years. Budgets often define political premierships. Reeves had a challenging task, addressing a series of different audiences: the bond markets (no Truss 2.0), Labour MPs nervous following a series of missteps and the electorate - who when the tax take is at a 70 plus year high and public services are on their knees - need to see the sunlit uplands. This was probably the most pre-briefed Budget in history - likely done deliberately to lower expectations to the floor before delivering something better than expected. The big news is investment. Revising the ‘fiscal rules’ on capital spending allows more space to target investment in key areas - a whopping £64bn allocated for next year followed by £10bn over the next four years. Proof in politics that when the situation demands - rules are there to be broken. As always there were a number of retail nuggets. A freeze on fuel duty, increase in the minimum and living wage, expanded carers allowance and NHS funding were all selected to balance tax rises with reliefs. But measures hitting businesses (employer NI) and farms could cause significant political pain in the months ahead if this budget fails to deliver on Labour’s number one mission: growth. 

Op-ed: Driving growth: why Labour can’t afford to ignore roads in the Budget ✒️ Bradshaw Advisory consultant economist Matthew Brighty Read on:

We’re #hiring a new Senior Consultant, Public Affairs in London Area, United Kingdom. Apply today or share this post with your network.

Our Senior Adviser Lord Stewart Wood appeared on Radio 4's Today Programme this morning with Alastair Campbell to discuss the removal of Sue Gray. You can listen on BBC Sounds at about 1hr 50mins in. https://lnkd.in/er66iMsr

Will Murray has written for Labour List with some of his thoughts about the lessons the Labour government need to learn from the debacle of HS2 over the last decade to improve delivery for the future. https://lnkd.in/eCNryhxv