FORMER Chancellor Sajid Javid has urged his successor to slash VAT and employer’s national insurance to help the recovery from Covid-19.
In a report out today for the centre-right Centre for Policy Studies, Mr Javid also says more must be done to avoid the pandemic worsening regional inequalities, with dramatically increased infrastructure spending and a pared down planning system.
He warns tax rises would be “self-defeating”, and says the government should try to achieve a balanced within three years of the economy returning to normality.
Public debt is almost £2trillion, more than 100 per cent of UK GDP.
The Bromsgrove MP, who quit as Chancellor in February in a turf-war with Number 10, also says the new occupant of 11 Downing Street, Rishi Sunak, should make the Bank of England’s key target improving GDP, not curbing inflation.
Pitched as the “first detailed post-crisis blueprint” for renewing growth across the UK, the ‘After the Virus’ report has 63 recommendations.
In his introduction, Mr Javid said: “I have no expectation that these recommendations will be adopted wholesale. Instead, they should be thought of as a series of standalone measures - designed to inspire further thought and enhance an eventual recovery plan.
“If we want to secure the strongest possible recovery, it’s essential that no stone is left unturned. This report sets out ideas for maximising growth, supporting businesses and creating new jobs at speed.
“My colleagues in government have done a fantastic job supporting the economy so far. I hope this report proves helpful for the task that lies ahead.”
CPS director Robert Colvile added: “This report sets out a programme for economic recovery which combines the new drive for levelling up and public investment and with the pro-market, low tax agenda the CPS has always championed.
“This is a vision for growth driven by a private sector with the incentives and flexibility to invest and create jobs, empowered by an infrastructure revolution.”
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