Making your economic case for action at the Autumn Budget

Just a few weeks ago we saw the Chancellor stand up and deliver his Spring Statement against a backdrop of waning business confidence and high inflation. Businesses were looking to the Chancellor to deliver vital support to minimise the impact of higher energy and commodity prices. The stark reality is that while the Chancellor did take some steps to boost confidence, it didn’t deliver enough to help firms tackle the current challenges.

Despite this, the Spring Statement did deliver some positive news for business. We saw the Chancellor set out his stall for the long term on people, capital, and ideas, signalling his intent for the next fiscal event in the Autumn. A focus on rejuvenating UK productivity and driving growth is an economic vision that will resonate with many businesses of all shapes and sizes. And with the Chancellor looking to get back to one major fiscal event a year, the Autumn Budget will be the opportunity for businesses to shape what this looks like.

A critical part of achieving this will be building a strong economic case that lands well with the Treasury who ultimately hold the purse strings. As the economics and finance ministry, the Treasury view policy through an economic lens, and with the Chancellor facing tight public finances, economic evidence is even more crucial. The government face a lot of tough choices and will be looking for policy recommendations that can truly make a difference.

Based on our experience of working with the Treasury, there are a few areas where economic evidence really helps your policy ideas gain traction:

1. Be clear on the cost to the exchequer – ultimately the Treasury care about the cost of a policy change. At the CBI we have a dedicated team of policy economists who are experienced in costing policy recommendations across a broad range of policy areas from extending the scope of the R&D tax credit to establishing a grant scheme for energy efficiency in homes.
2. Set out the cost of inaction – the cost of doing nothing in some cases can be detrimental to the economy. Being able to demonstrate this cost through facts and figures will be a key part of making your case. This was particularly true for the CBI during the pandemic where it was critical to set out our case to protect jobs and the economy for the long-term.
3. Explain the market failure – when making policy decisions, a key question for the Treasury is whether the policy is addressing a true market failure. In other words, if left to its own devices, would the market fail to deliver the desired outcome. Being able to evidence this provides a clear justification for government intervention.
4. Evidence the economic impact – policy decisions should deliver good value for money. The Treasury are accountable for ensuring their policy decisions deliver wider economic and societal benefits. Bespoke economic analysis, international benchmarking and case studies are all useful tools to enable you to evidence the impact of your policy ideas.

We know many organisations will be reflecting on the Spring Statement and considering how they build their own economic case ahead of the next fiscal event in the Autumn.  At CBI Economics we have a team of dedicated economists with wide ranging experience of evidencing policy recommendations. We can help you calculate the fiscal costs of your policy ideas, demonstrate their economic impact, and even help you to best articulate the issues you face through economic evidence.

If you have a project or idea in mind that you would like to discuss further, get in touch with the CBI Economics team.