Steve Baker has a useful CAPX reminder of the slowly grinding wheels of our unsustainable welfare state. Useful because we seem to have landed ourselves with a government which is ideologically incapable of doing anything about it.
Rachel Reeves makes her first major misstep
Rachel Reeves, the Chancellor of the Exchequer, is expected on Monday to give a statement on public spending ‘pressures’ amounting to tens of billions of pounds. It is not credible to suggest this will be a surprise, as Paul Johnson of the IFS explained on the Today programme (07:37).
Either it will be a restatement of what is already known – in which case any claim this is a surprise is frankly dishonest – or it will be a wish list of spending which government departments would really like and may have bid for in spending reviews – in which case elements will range from the unaffordable to the fanciful. Reeves is not at all likely to raise taxes on Monday but instead to set the scene for rises later.
It is Rachel Reeves’ first major misstep. Not because the Labour Party promised not to raise taxes on working people: this early in the parliament, as politicians so often do (alas), they may simply break their promises, blaming their predecessors.
It is a major misstep because with taxes at historic highs, and likely at or beyond Britain’s taxable capacity, Reeves would be telling us an unspoken truth which undermines her party’s faith in big government: that the UK cannot afford the state we have. She would be right and the Conservatives should point that out.
The whole piece is well worth reading, because the recent Labour victory has a number of slowly moving but intractable problems to tackle without the slightest hint that it has the ability to recognise, let alone tackle them. Tax, welfare, Net Zero and immigration are just some of the ingredients of Starmer's remarkably poisonous poisoned chalice.
Rachel Reeves, the Chancellor of the Exchequer, is expected on Monday to give a statement on public spending ‘pressures’ amounting to tens of billions of pounds. It is not credible to suggest this will be a surprise, as Paul Johnson of the IFS explained on the Today programme (07:37).
Either it will be a restatement of what is already known – in which case any claim this is a surprise is frankly dishonest – or it will be a wish list of spending which government departments would really like and may have bid for in spending reviews – in which case elements will range from the unaffordable to the fanciful. Reeves is not at all likely to raise taxes on Monday but instead to set the scene for rises later.
It is Rachel Reeves’ first major misstep. Not because the Labour Party promised not to raise taxes on working people: this early in the parliament, as politicians so often do (alas), they may simply break their promises, blaming their predecessors.
It is a major misstep because with taxes at historic highs, and likely at or beyond Britain’s taxable capacity, Reeves would be telling us an unspoken truth which undermines her party’s faith in big government: that the UK cannot afford the state we have. She would be right and the Conservatives should point that out.
The whole piece is well worth reading, because the recent Labour victory has a number of slowly moving but intractable problems to tackle without the slightest hint that it has the ability to recognise, let alone tackle them. Tax, welfare, Net Zero and immigration are just some of the ingredients of Starmer's remarkably poisonous poisoned chalice.
The situation facing the UK and the world is extremely serious. When Rachel Reeves on Monday tells the Commons we cannot afford present spending, the Conservatives should make the most of it in the public interest.
Perhaps the Chancellor means to cut spending, cut taxes and go for the growth we need but it seems unlikely. More probably, Rachel Reeves is more correct than she realises: as a former Bank of England economist, she is without excuse.
Perhaps the Chancellor means to cut spending, cut taxes and go for the growth we need but it seems unlikely. More probably, Rachel Reeves is more correct than she realises: as a former Bank of England economist, she is without excuse.
3 comments:
Nice article.
Starmer is presenting himself as a mature, steady pragmatist, in contrast to wild ideologues like Liz Truss and fantasists like Boris. This is going to be a major test for him. Is he going to pretend that he can run the welfare state that he has promised, while expanding demand via immigration and cutting off energy?
Unnecessary taxes like the TV licence could go at a stroke, and that'd mean 160 odd quid staying in wage packets!
Getting rid of the bloated regional assembles would save billions, and make local councils actually work for their areas!
There - problem solved!
Sam - yes he's in an impossible position and it should be interesting to see how he wriggles. Lying has been the preferred way to keep the show on the road, but we can't afford Labour governments and there is no way to square that circle without lying about the definition of circles.
Scrobs - I agree, but they don't have the courage to tell people how necessary it is. Carry on lying seems to be the approach for now.
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