Britain’s next leader must tackle economic decline, think tank says

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LONDON — Britain’s next prime minister cannot count on promises of tax cuts to tackle the country’s economic underperformance, which has left middle and low-income households worse off than in similar European countries , said a think tank.

The Resolution Foundation think tank said whoever won the ruling Conservative Party leadership race should focus more on accelerating growth and reducing inequality.

“We underestimate the scale of our relative decline and are far from serious about the nature of our economy or the scale of change needed to make a difference,” said Torsten Bell, chief executive of the Resolution. Foundation.

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The think tank, which specializes in issues facing low-income households, said the country’s next leader must go far beyond the promises of tax cuts that dominated the early stages of the campaign.

Britain’s productivity gap with France and Germany has nearly tripled since the start of the global financial crisis in 2008, costing 3,700 pounds ($4,400) in lost output per person, according to a report released Wednesday.

As a result, wages stagnated and 8 million young workers never experienced a period of sustained real wage growth.

While the wealthiest 10% of UK households by income were wealthier than in many other European countries, middle-income households were 9% poorer than in France and the poorest fifth were over 20 % worse off than in France and Germany, he said.

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Boris Johnson’s successor is expected to grow Britain’s services industry, boost investment in skills, fix regional productivity gaps and raise taxes on wealth rather than labour, the report says.

Separately on Wednesday, one of Britain’s main employers’ groups called on Conservative Party leadership candidates to find ways to boost business investment through tax incentives alongside other corporate tax reforms. companies.

Tony Danker, chief executive of the Confederation of British Industry, urged the government not to “get stuck in limbo” as the competition runs between now and early September.

“Business confidence is down, exacerbated by a sense of drift and the politicization of economic policy,” he said in an open letter to candidates. ($1 = 0.8408 pounds) (Writing by William Schomberg; editing by David Milliken)