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Chancellor urged to focus on ‘a new growth strategy’

An influential think tank has urged Chancellor George Osborne to prioritise regional growth and innovation in his forthcoming Autumn Statement, and to avoid making ‘expensive’ short-term tax cuts.

The Work Foundation is calling on the Chancellor to relax the deficit reduction in the short-term, in favour of directly funding investment in science, technology and regional growth.

Work Foundation Director Ian Brinkley 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 focused on creating assets and underpinning sustainable growth,’ he added.

Mr Brinkley argued that it would be a mistake for the Chancellor to introduce short-term tax cuts, and that it would be preferable to instead channel the funds into additional infrastructure investment.

The organisation has also warned the Government against introducing ‘wasteful measures’ relating to employment regulations, such as extending flexible working, national insurance holidays, and further de-regulation, which it says will not stimulate demand in the economy.