Liz Truss launches the Development Commission earlier this year. The task force is now preparing to launch an alternative budget credit: Carl Court/Getty Images
The Economic Growth Task Force set up by Liz Truss is to unveil new modeling aimed at challenging the Office for Budget Responsibility (OBR) approach) produces forecasts.
The Economic Growth Commission, founded in the summer by the former prime minister, has carried out “dynamic modeling” which tries to assess how changes such as tax cuts affect the decisions of people and businesses.
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Since leaving office last year, Ms Truss and others in the right-wing Conservative Party have criticized the way the OBR and Treasury predict the impact of various economic policies.
A common claim is that these forecasts tend to focus on tax cuts in terms of the loss of nominal value of Treasury revenues, rather than their potential to stimulate additional economic activity.
In a February article for The Telegraph, Ms. Truss said that such “static modeling tends to underestimate the benefits of low taxes and supply-side reforms to economic growth and overestimate the benefits of government spending.”
She added: “This inevitably leads to higher taxes and higher spending – hence the inexorable tax rises we are now seeing.”
The Growth Commission is now due to carry out a new analysis using dynamic modeling to estimate how Various policy and regulatory changes may affect behavior and long-term growth rates.
The Growth Budget report will be published on November 14, just days before Chancellor Jeremy Hunt delivers his autumn statement on November 22.
The Economic Growth Commission said the review would include tax reforms such as changes to corporation tax, income tax and national insurance.< /p>< p>The project will look at how the return to VAT-free shopping for foreign buyers will affect the number of tourists and the amount they spend, including the impact on inflation, and will model the impact over 10, 15 and 20 years.
Spending , governance and public sector performance will also be a focus of the document, as well as regulatory reforms such as changes to the planning system.
Douglas McWilliams, co-chair of the Economic Growth Commission, said: “This report presents a detailed challenge traditional thinking, which has so far failed to cope with the problem of low growth in the UK economy.”
“The Economic Growth Commission looks at the full economic consequences of a range of policies, from taxes to regulation.
“Our analysis will be the first to estimate in detail the full costs of different policies and present clear alternatives for policymakers to consider.”< /p>
He added: “At a time when politicians of all parties cannot explain how to achieve economic growth, that is why it is so important to put forward an alternative that actually provides answers, supported by leading economists from around the world.”
Shanker Singham, another co-chair of the group, said: “One of the interesting things about the Economic Growth Commission's budget is that we look at both tax and fiscal policy as well as domestic regulatory policy.
“Since micro reforms often drive the macroeconomic picture, combining it all into a dynamic framework is a much better way to stimulate economic growth in an economy. Great Britain.”
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