Topic Primers

Economy

What does the Bible say?

We cannot expect the Bible to provide us with particular policy instructions for our economy today; the Old Testament in particular was written to an agrarian society, in which people’s work revolved around their biological needs, whereas today’s society is more consumerist. But as ever, the Bible does give us useful, broad principles about humanity, money and possessions, which we can adopt and translate into 21st century Britain. 

An important first principle for all of us, as we consider how the Government’s economic policy might impact us, is that ultimately, we are all just stewards of what we own: “the earth is the Lord’s, and everything in it” (Psalm 24:1). God has the first claim on all things that we think belong to us: as David declared, “All things come from you o Lord, and of your own do we give you” (1 Chronicles 29:14). 

As stewards, we are to use what we have been given wisely (such as in the Parable of the Talents, in Matthew 25:14-30), but we are not to make an idol out of economic prosperity, or to look to be hoarding for ourselves (Luke 12:16-21). Jesus does not, ultimately, say there is something objectively wrong with being wealthy, and the Old Testament recognises that good stewardship involves passing down an inheritance even to our grandchildren (Proverbs 13:22), but he does sincerely warn us of its dangers (“you cannot serve both God and money”: Matthew 6:24) and we even see a case study of a man who wanted to follow Jesus, but ultimately, couldn’t give up his wealth to become a disciple (Mark 10:17-27). This is a particular threat for kings and governments: God warns them not to accumulate too much silver and gold for themselves, rather than looking to the welfare of their people (Deuteronomy 17:17).

What this does indicate, though, is that, rather than expecting the government to provide the answer to all our economic questions, we have individual responsibility for how we use our wealth, as do other institutions, such as churches (as the early church does in Acts 2 and Acts 4). The Bible doesn’t dictate whether government should be more or less interventionist in economics, although it does provide examples of when it should be involved, speaking on behalf of the poor and the vulnerable (eg. Jeremiah 22:1-5). 

Indeed, within God’s vision for the economy, we see that He has a particular concern for the poor. Jesus said that he has come to “proclaim good news to the poor”, in his first public sermon which laid out his agenda to bring the kingdom of God. Various characters are commended for their help of the poor, from Job (Job 29:16), to Shallum, the king of Judah (Jeremiah 22:16) and Tabitha (Acts 9:36). God instructs the nation of Israel to adopt various measures for the benefit of those in poverty, such as the seven-year cancellation of loans (Deuteronomy 15) or the year of Jubilee (Leviticus 25). 

Ultimately, God recognises a tension: in Deuteronomy 15, on the one hand, He says, “there need be no poor people among you” if they follow his commands, and yet just a few verses later, “there will always be poor people in the land”. There is a fundamental difference, however, between saying “there need be no poor people among you” and that everyone should own an equal amount; as Jesus said, “the labourer is worthy of his hire” (Luke 10:7), and Paul laid out a rule for the Thessalonians regarding laziness: “The one who is unwilling to work shall not eat.”

God lays out two types of approach in looking to help the poor: we might characterise them as a hand-out, and a hand-up. Both were needed, even if we come to different conclusions as to the balance we seek to strike between them. Some of the provisions God instituted were merely providing the poor with assistance, such as the three-year tithe which was collected on behalf of the vulnerable (Deuteronomy 14:28-29), or the laws around gleaning (although ultimately, the poor still had to go out and collect the grain). Other measures were designed to help the poor to earn a living: they could hire out their services (Leviticus 25:39-43), although crucially, this was not supposed to be a permanent state of affairs, being released from the arrangement at the year of Jubilee. 

Such measures were not designed to increase inequality: God specifically said the Israelites should not lend money at interest, and could not sell one another as slaves. God’s plan for the poor was for them to be free and to flourish, in contrast to some measures today around loans and debt. Ultimately, we believe that one day, there will be no economic injustice: we look forward to the day when, as Isaiah said, “No longer will they build houses and others live in them, or plant and others eat. For as the days of a tree, so will be the days of my people; my chosen ones will long enjoy the work of their hands.”

Questions to think about

Is a party likely to steward its economic resources well if it enters government?
Will a party’s economic policy raise the standard of living for all of its citizens, and particularly for the poor?
What policies is a party proposing which will help the poor move away from poverty?

What have the parties said?

  • Prime Minister Rishi Sunak will point to the fact that in the last two years, inflation has now returned to normal levels, now standing at 2.3%.
  • Although historically the Conservatives have been a party of lower tax and lower spend, events in the last five years (including the pandemic and the energy crisis) have seen the tax burden rise to higher levels than at any point since World War II. 
  • The Conservatives did cut National Insurance by 2p back in April; they are likely to want to cut taxes further if re-elected, although they may not have room to do so for a few months.
  • They historically have opposed a ‘wealth tax’, and are more likely than other parties to be interested in cutting the top rate of income tax.
  • They are traditionally a ‘pro-business’ party, and cut business taxes in 2023. An offer to businesses is likely to make up part of the manifesto again.
  • The Chancellor Jeremy Hunt has talked about possible spending cuts; the Conservatives are traditionally ‘smaller-state’ than other parties. This lies behind, for instance, child benefits currently being limited to two children.
  • The Labour Party has been keen to stress that it can deliver economic stability, after a turbulent few years. Their messaging is likely to focus on the economic chaos caused by the Conservative mini-Budget delivered under Liz Truss. 
  • Aware of its historic reputation for being a party that brings in higher tax in order to spend more, the Shadow Chancellor Rachel Reeves has explicitly ruled out a wealth tax, such as an increase in the top rate of income tax.
  • Instead, Labour are publicly saying that they will enact tough spending rules, and will not make unfunded spending pledges. This has meant them supporting some policies they would not normally be in favour of, such as the two-child-cap on benefits. 
  • Labour is keen to woo businesses in this election, and is unlikely to raise tax on big corporations. It has also proposed a National Wealth Fund, to invest in Britain’s industries, such as ports and the steel industry, with the aim of unlocking private investment.
  • Labour were initially promising large-scale investment in the Green Economy. This will remain a priority, but it has downgraded its spending plan and abandoned its previous commitment to spend £28 billion/year enacting it.
  • The Lib Dems are likely to use the Conservative management of the economy in recent years as an attack-line, with particular focus on the mini-budget under Liz Truss. They have said they are committed to ensuring all fiscal events are accompanied by forecasts from the Office of Budget Responsibility. 
  • They have reiterated their support for maintaining the ‘triple lock’ on state pensions, but oppose a reduction in inheritance tax, reductions in income tax for top earners and other tax cuts for the wealthy. 
  • Investing in the green economy currently makes up a central focus of their economic strategy: they are committed to investing in renewable power and home insulation, would implement a one-off windfall tax on oil and gas producers and traders, and want to incentivise businesses “to invest in new clean technologies in order to grow the economy, create good jobs and tackle the climate emergency.”
  • The Green Party opposes traditional economic indicators as poor reflections of sustainability or well-being and so would replace them with indicators measuring sustainability, equity, and devolution.
  • They are committed to devolving economic power to the ‘lowest appropriate level’ and supporting the informal and local economies as a key means to developing a sustainable world economic system.
  • The Greens are committed to ecological sustainability and therefore oppose any increases to ‘resource extraction, industrial throughput and waste production’ and wishes to reduce demand for energy and resources. 
  • The Green Party will require companies to give fair pay and pensions to their workers and will curb excessive pay for executives and senior managers. Large and Medium companies will have to undergo an audit to assess their environmental and social impact. 
  • They want to introduce a Universal Basic Income as a means of ending ‘dependence on economic growth’. 
  • Reform UK have a strong emphasis on lowering taxes. They promise to lift the threshold for paying income tax to £20,000, and to lift the threshold for the top rate to £70,000. They have also committed to scrapping VAT on energy bills, lowering fuel duty by 20p per litre, and reducing Stamp Duty. 
  • They also wish to reduce taxes for businesses: this includes measures to increase the threshold at which businesses pay corporation tax, and to reduce the main corporation tax rate from 25% to 15% over five years. 
  • They want to abolish Inheritance Tax for all estates worth less than £2 million, and to reduce it to 20% for all estates worth more than £2 million.
  • To compensate for these ambitious tax cuts, they also wish to reduce government spending, claiming that £5 out of every £100 is currently wasted and could be saved. 
  • They also want to alter the benefits system, with a 2-strike rule for job offers in order to encourage people back to work, and a commitment to ending benefit fraud.
  • The SNP argues that independence would result in better economic outcomes in Scotland and has cited growth rates in other small European countries.
  • It is expected to call for full fiscal autonomy, so that the Scottish Government can control matters including National Insurance and inheritance tax.
  • The SNP has called for the UK Government to increase capital gains tax, tax share buybacks and increase taxes on those earning more than £100,000.
  • Leading party figures have been highly critical of austerity and after the last Autumn statement, recommended increased spending on public services.
  • The SNP has increased taxation in Scotland and created new income tax bands. It has historically supported progressive taxation, where those who earn more pay more.
  • SNP MPs have opposed UK Government welfare cuts. The party sought to mitigate the bedroom tax, and established a Carer’s Allowance, and Scottish Child Payment.
  • Plaid Cymru has called for an expansion of economic powers for Wales, including new borrowing powers for the Welsh Government, which currently operates under a £150 million pound annual borrowing limit.
  • The party would seek agreement from the UK Treasury for the Development Bank of Wales to act more fully as a bank, for example in borrowing from sources such as pension funds to lend to the public as well as the private sector.
  • Plaid Cymru has called on the UK Government to pursue a range of measures to tackle the cost-of-living crisis, including an uplift of £25 to Universal Credit.
  • The party says the UK Government’s mandatory minimum wage for those over 23—the National Living Wage—should be raised to the level of the Real Living Wage. It also wants a similar increase in the National Minimum Wage for those under 23.
  • The DUP supports low taxation and household bills. Since the return of devolution in 2007 the DUP has consistently opposed the introduction of water charges and the removal of the domestic household rates cap. 
  • They are a pro-business party and secured the devolution of Corporation Tax to Northern Ireland in 2015. Although, despite holding the Economy brief since the devolution of Corporation Tax, they have not proposed a cut.
  • The party campaigned at Westminster for the extension of City Deals to Northern Ireland. The party claims that these packages of funding will help new regional areas leverage additional investment, support job creation and deliver economic growth. Across Northern Ireland more than £1.3 billion will be invested in a range of exciting projects to promote new technologies, centres of excellence and world leading research and see national and local government work in partnership with local universities and the private sector to transform our economy. 
  • The DUP support the removal of the two-child limit for Northern Ireland, but given the cost to the NI block grant, they only support wider welfare mitigations as part of a wider UK initiative. 
  • The DUP support an increase in the minimum wage and benefits in line with inflation and support the pensions triple lock.
  • The party has been very vocal in its opposition to the TV licence and support its abolition.
  • The UUP’s key priority is reversing economic inactivity. Northern Ireland has amongst the highest rate of inactivity in the UK, meaning people are not predictive and living fulfilled lives. They argue the focus of Government should be job creation and helping people back into work.
  • The party wants to see p a Northern Ireland Job Skills Fund – similar to SDS (Scotland) and Skillnet (Ireland) – to ensure the proper organisation and funding of job skills training, apprenticeships and life-long learning for all workers. They see this as being delivered through a Westminster/Stormont partnership.
  • The UUP are strong advocates for City Deals. They highlight that economic activity can be boosted in local areas by partnerships between the UK government, local councils and Stormont. 
  • The UUP are critical of the larger parties in Northern Ireland for not utilising the devolved Corporation Tax powers. They contend that if the powers are utilised and Stormont proves it can effectively manage money, more fiscal powers could be devolved, While this sounds good in theory, they do not set out how the offsetting cut in the block grant would be funded, given the precarious fiscal state Northern Ireland finds itself in, devolving and finding further powers may be difficult in the current fiscal climate.
  • Sinn Féin are a socialist party much further to the left of the British Labour Party, They have called on the British Government to to remove tax on home heating oil; reduce tax on diesel and petrol; eliminate VAT on energy bills; reverse red diesel rebate changes and introduce a tax on the large profits of energy companies.
  • The party opposes welfare reform and want to see an increase in benefits and minimum wage. They believe that payments should be aligned north and south. Given the focus on the tax and beneits system in the south for the party, it is difficult to criticise the UK Government as the party needs to position itself to be in Government itself down south. This means the party does not have detailed welfare reform plans for the north, however they oppose Universal Credit, the two-child benefit cap and the bedroom tax.
  • SDLP will develop strategies to support social enterprise, women in business and youth enterprise, and create ‘Prompt payment champions’ in each council area to ensure small businesses are paid quickly for services and tackling regional investment deficiencies.
  • The SDLP  are concerned about the economic imbalance between the east and west of Northern Ireland. They want address this through fundamental reform of Invest NI, with a new mandate to improve regional imbalances and maximise the economic potential of NI’s dual market access under the Protocol
  • The SDLP want to see proper funding of the skills strategy, increasing Northern Ireland’s low uptake of apprenticeships and demanding the UK Government make good on promises to replace lost European funding.
  • Alliance have traditionally placed a strong focus on welfare. They have opposed welfare reform and universal credit. They want the two child limit, benefit cap and bedroom tax repealed. Alliance universal credit, replaced by an incentive-based system, this would reduce waiting times for initial benefits payments. Given this is a deviation from the system in the rest of the UK it would attract a cut in the block grant from Treasury. It is unclear how the Alliance party proposes to pay for the system divergence, including any associated IT costs.
  • The party supports inflation based increases for benefits and following the Scottish Child Payment Scheme they advocate a £20 a week additional child payment to be made to families that need it. 
  • Alliance want to see the business landscape improved in Northern Ireland and propose measures to make it easier to do business here. They propose a comprehensive review of business support infrastructure., the development of Business Improvement Districts and easier access to banking and finance. They believe this could be funded by increased business rates gained by improvements to the business landscape. 
  • Alliance advocates for the retention of the triple lock on the state pension

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James 4:17

17If anyone, then, knows the good they ought to do and doesn’t do it, it is sin for them.

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Isaiah 9:16

16Those who guide this people mislead them, and those who are guided are led astray.

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Genesis 1:28

28 God blessed them and said to them, ‘Be fruitful and increase in number; fill the earth and subdue it. Rule over the fish in the sea and the birds in the sky and over every living creature that moves on the ground.’

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