2013 Budget

This Wednesday George Osborne will unveil the 2013 budget, with unsurprisingly more spending cuts and  a downgrade to growth expected.

Many different industry groups are urging the chancellor to increase spending on Infrastructure. They argue that the UK should be "the best place to do business" and a better infrastructure will allow firms to be more productive .This form of spending is largely believed to have the largest multiplier effect on the economy.
       Further calls have been made for Tax cuts by government. This includes those directly affecting both consumers and business.Consumer spending is key to economic growth and therefore reverting  VAT back to 17.5% would help boost  consumption and aggregate demand. Tax breaks on Capital should also allow for firms to increase investment, again boosting productivity and thus allowing aggregate supply to keep up with the increase in demand. Current tax credit schemes , which give tax breaks on R&D to firms have shown to be very successful, and therefore this should be taken a step further by reducing corporation tax for businesses, which will allow for them to plough more of there profits into investment.
     It is also rumoured that there are plans to build extra schools, this would increase the potential growth of the economy as the long run productivity of the economy would be improved through more accessible education.