James Smith's picture
Affiliation: 
Head of Macroeconomic Policy, Resolution Foundation

Voting history

Assisting Households Facing Rising Energy Costs

Question 3: Should a windfall tax be used to (fully or partially) finance support to households?

Answer:
Yes
Confidence level:
Confident
Comment:
Classic (and pure) windfall for many energy producers means strong case for windfall taxes.

Question 2: Which of the following is the best way to address the impact of rising energy costs on household finances?

Answer:
Conditional/targeted transfers
Confidence level:
Very confident
Comment:
The key role for fiscal policy here is to provide targeted support for those who face hardship in the face of rises in energy prices that households could not foresee or hedge themselves against. Achieving that requires detailed information on household income and energy needs (the trouble is that, in practice, there is currently no mechanism for delivering this, hence the blanket price guarantees).

Question 1: Overall, which of the following best characterises how the government’s proposed energy policies will leave the average UK household over the medium term:

Answer:
Substantially better off
Confidence level:
Very confident
Comment:
Against a counterfactual of very sharp rises in household energy bills, the Government have provided huge (and expensive) support. See our (i.e. Resolution Foundation's) distributional analysis - Figure 5 in https://www.resolutionfoundation.org/app/uploads/2022/09/A-blank-cheque.pdf. The ex-post value of the EPG will depend on the market price of energy, however - and that remains extremely uncertain.

Levelling Up Productivity Gaps in the UK

Question 2: Which policies could best help reduce regional productivity disparities?

Answer:
Public or subsidized investment in lagging communities
Confidence level:
Not confident
Comment:
More investment in transport and communications infrastructure would reduce incentives for industries to cluster.

Question 1: What is the primary factor driving regional productivity disparities in the UK?

Answer:
Agglomeration Effects
Confidence level:
Not confident
Comment:
Lots of factors drive place-based outcomes. Services dominated economies, like the UK, benefit from agglomeration effects - meaning that some high value added industries concentrate in large cities (ie London). That said, there are many other factors that feed into the spatial distribution of productivity - many of which are accidents of history and past policies.

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