Wednesday, October 23, 2024
For the sake of the economy Reeves needs to bite the bullet on tax and spend
Of course these things are just snapshots, it is the trends that matter, but if they allow the government to do the right thing, then who am I to argue.
This poll from IPSO from five days ago should be sending a powerful message to Chancellor Rachel Reeves. It found that two in five (40%) Britons say they support increasing spending on public services, even if it means that they personally pay more tax.
IPSO found that support for increased spending rises to 52% of those who voted Labour in 2019, as opposed to 35% of those who voted Conservative. There is also an age split, with 46% of over 55s wanting higher spending (20% prefer tax cuts) but among 18-34 years 34% wanting higher spending and 37% tax cuts.
When asked about specific issues, 6 in 10 (61%) of Britons support the next Chancellor increasing spending on the NHS, even if it means they personally pay more in taxes. This is followed by education (44%), policing (41%), and defence (40%). The public are most split on increasing their own personal taxes to pay for higher spending on green projects to reduce the impact of climate change (34% support higher spending even if that means higher personal taxes, 29% would prefer cutting taxes).
Labour however, have painted themselves into a corner. They have severely limited their options by promising not to raise income tax, VAT or national insurance on working people. There are also doubts about the workability of charging VAT on private education and accelerating the taxing of non-doms.
With a £22 billion budget gap and failing public services, Reeves really needs the extra revenue. The economy too, desperately needs capital investment in housing, transport, health, AI and many more areas if we are to compete with other countries and raise GDP. Such investment is key to levelling up the poorer parts of the UK.
Having a situation whereby average income per head is lower than most other Western nations is unsustainable. In his book 'This Time no mistakes' Will Hutton quotes John Burn-Murdoch of the Financial Times who has shown how skewed our economoy is towards London. He says that the UK capital is so disproprtionately rich that if it is not included in the figures the average income per head in the rest of the UK falls below that of the poorest US state, Mississippi.
Starmer and Reeves need to succeed where Boris Johnson, for all his rhetoric, failed. If they do not use this budget to set off on the road to tackling poverty in this country by investing in the economy then their project is doomed from the beginning.
