An increase in defence spending offers an opportunity to address our national security, economic and fiscal challenges together. London Business School’s Professor Paolo Surico and I have modelled the potential impact of his research on defence R&D on the UK economy. On a ten year view productivity growth could return to pre 2008 levels, transforming living standards, debt to GDP is lower and we could reach the 3% defence spending 2030 NATO target. I have written to the Chancellor and Defence Secretary.

Full paper here. 

I have been advocating for better long term economy policy making on the Treasury Committee. In our inquiry into the Office for Budget Responsibility (OBR), we heard economists such as Paolo Surico, the former heads of the OBR equivalents in the US, Professor Douglas Elmendorf, and the Netherlands, Laura van Geest, favouring longer forecasts.

As a result, I’m really pleased the Committee are recommending an additional ten year forecast because innovation policies, such as on R&D, show their maximum impact beyond the current OBR forecast horizon of five years.

Read the report here.

Covered in the Times and the Guardian. 

The government loses £2.3bn a year on “patent box” tax relief despite prominent academic research showing it is ineffective. 40% of the relief goes to one company. I challenged the head of HMRC to justify why they disagreed with the research and how this is a good use of public money. 

I asked the Bank of England Governor about the 1844 Bank Charter Act to focus on current issues.

The economic payoff of most research and development (R&D) investment is often closer to 8 years, however, the Office for Budget Responsibility (OBR) forecasts are only 5 years. I asked the new head of the OBR why then is he sceptical about long-term horizon forecasts.

As it stands, the Defence Investment Plan is a chronic missed opportunity and lacks ambition. Defence bonds would be a powerful way to increase R&D, address our national security needs and raise economic growth. I challenged the government on this and have written to the former Defence Secretary and Labour leadership contenders, alongside other Lib Dem MPs, urging them to commit to this.