Osborne ‘must resist short-term tax cuts

The think tank has presented a submission ahead of next week’s Autumn Statement, reminding George Osborne of his pledge to make Britain a world leader in key new technologies.

Ian Brinkley, director of The Work Foundation, said: “We believe the government has scope to relax the pace of deficit reduction in the short-term in order to directly fund new investment and stimulate growth. While there are legitimate concerns about the impact this may have on the markets, there is less likely to be an adverse reaction if the stimulus is clearly focussed on creating assets and underpinning sustainable growth.

“We therefore think that it would be a mistake for the Chancellor to go for expensive short-term tax cuts. The money would be much better used if channelled into additional infrastructure investment, supporting the science, design and technology base and strengthening innovation-focussed institutions.

“We strongly support the Campaign for Science and Engineering and Nesta’s proposition that the proceeds from the sale of 4G licences should be channelled into these areas.”

Mr Brinkley said that there is little need for “wasteful measures” aimed at making the labour force less expensive or more flexible, such as national insurance holidays or further de-regulation.

“Such measures will do nothing to spur demand in the economy,” he said.

The Work Foundationhas also raised concerns about the efficacy of R&D tax credits and calls for them to be frozen at their current rates, with future increases in resources to be focused on university-industry collaboration.