Technically not the budget, but here are some links and notes … TBH, not as bad as I expected but like many others I ask if its enough.
Links
Comments
- Left perspectives on Labour’s first budget by Mike Phipps, quoting Paul Novak on wages, Fiaza Shaheen on CGT and IHT and Richard Murphy on IHT.
- A budget that points way but doesn’t get us very far by Simon Wren Lewis. I think this is important, Professor Lewis wrote Corbyn’s fiscal rules and is a champion of the idea that fiscal rules are designed to protect investment. He also argues that on investment, Reeves has reversed the trend of the Tory government’s stewardship and plans that public investment will stay flat at 2.5% GDP. This is in his opinion a modest improvement. He calls out the reversing of the Tories planned cuts, and again points out that 2024 is not a good place to start if one is concerned about public sector outcomes. He finishes the article by looking at the fiscal rules, a subject in which he is an acknowledged expert, and argues, “good fiscal rules tries to combine fiscal discipline with good fiscal policy, and good fiscal policy should be counter cyclical not pro-cyclical.”
- Chris Dillow, on the weakness of the investment multiplier.
- Rachel Reeves has a miracle cure for Britain’s growth by James Meadway, a preview, predicting that the supply side reforms and industrial policy are insufficient to generate the growth needed to repair public services and that the realistic need to combat climate change is a paradigm shift to economic management. The budget is socialism for the rich austerity for the poor again by James Meadway, but a comment after the speech, where he repeats some of what he forecast, “for all the hype, it’s unlikely to be enough to turn the country around. A far bigger, bolder shift was needed – one that properly acknowledged our worsening economic and environmental situation, the two being increasingly tangled together, and took the necessary first steps to address them: protecting the poorest, protecting real household incomes and taxing the wealthiest to pay for it.”
- Britain’s budget is heavy on spending but light on reform (£), from the Economist doesn’t really need a summary. It welcomes the expenditure, criticises the wealth and unearned income changes, although silent on the pension reform. It does not detail the changes it wants, but wants to see the tax system incentives in favour of self employment and small business vs employment remediated. This is the article that has the statement about US tax levels and EU levels of welfare and uses this choice to criticise the foibles and inefficiencies of the tax system.
- I found an Instagram video from Grace Blakely; I wish they’d publish transcripts but I think the economics is spot on; I summarise, our public services need the investment, it’s a shame there was no wealth tax, she mentions the tinkering with wealth and unearned income taxation and the failure to act on the fuel duty, she regrets that while current account spending has only been stabilised, the workers in the NHS, and education service need decent jobs and pay and, unlike some, her list of necessary public sector workers is pretty comprehensive. She summarises it as as good as we could expect.
- This Labour budget is austerity by another name, Politicians including Jeremy Corbyn and MPs from the Green party and Plaid Cymru respond to the chancellor’s plans. They say, “This budget is austerity by another name. .. While we welcome the government’s decision to invest in school and hospital buildings, it is extremely disappointing that these investments have been undermined by a swathe of public sector cuts, cruel attacks on the worst off, and a dogmatic refusal to redistribute wealth and power. .. We, along with nearly 100 progressive Independent and Green politicians across the country, are calling on the Labour government to: 1) introduce wealth taxes; 2) abolish the two-child benefit cap and stop attacking welfare recipients; 3) reverse cuts to winter fuel; 4) restore the £2 bus cap; and 5) invest in a Green New Deal.”
- The FT View on the Budget signed by the EB, basically supportive although they also whinge about the tax regime. The FT’s problem is that it believes that mobile capital and rich people (and businesses) are the main source of investment, they believe that the tax base needs reform. Secondly there is a risk that the growth may not come and that to sustain expenditure on services, more tax rises will be needed, and the success of the budget will depend on how well Reeves can execute on her plans to boost investment. She outlined important plans to spend £100bn over the next five years on transport, housing and research and development.
- In the Economist’s article, they make the accusation that the UK has an ambition of US levels of tax and European social wage and safety net. The Economist thinks it’s a missed opportunity to reform the tax system and create a level playing field between self-employed and small business owners, and those on wages.
- Michael_Chessum on aggregate tax levels, a tweet, but suggesting that comparing tax levels with our past is the not the whole story.
- Paul Mason on Medium again, he says, “this was a socialist budget, carried out in conditions of fiscal sabotage by the outgoing Tory government, and executed through institutions — the Treasury and the OBR — that still don’t accept the economic rationale for what they’re being asked to do.” , … You can quibble with details of Reeves’ plan, but it is a solid social-democratic reaction to the situation she found herself in. It looked after the workers, it taxed the bosses and the rich, it stabilised debt and left room for tens of billions of investment in the NHS, schools and homes; and it hiked the minimum wage. On the institutions, I wrote this on my blog, which includes the quote, “The OBR and the Bank of England are both institutions designed to protect economic policy from democratic control. Time to abolish one and reform the other.” Mason used some charts from the Resolution Foundation’s overnight report on the budget.
- George Monbiot comments on the likely ineffectiveness of the Government’s carbon capture investment plans.
- And five days later, they raise tuition fees.
More
- Forecasts in depth, brief guides and explainers on public finances from the OBR
- Invest 2035: the UK’s modern industrial strategy, much will depend on if this strategy works.
- Direct effects of illustrative tax changes bulletin (June 2024) from gov.uk
More on Mason’s essay
- Mason had specific criticisms of the Bank and OBR, with respect to the institutional resistance, he said, “I wish Reeves had moved early to reform the Bank’s remit, requiring it to target growth and loosening the 2% target — because we’re in a high-inflation era, driven not only by global instability but post-Covid deglobalisation and geopolitical conflict. But you can do a lot simply by appointing a few non-neoliberals to the MPC, so fingers crossed.” and “I have argued for years that the problem rests with the design of the OBR itself, which is culturally attuned to accepting the most conservative economic models, sometimes in defiance of mainstream academic opinion.” … “it is important for Labour to project a clear political message: the [OBR] growth projections arising from this budget are under-estimates. They don’t take into account any of Labour’s main growth policies, and they are using a highly conservative model that needs to change. I am however not convinced that Labour’s growth strategy is good enough and the OBR are not the only people to suggest that the growth plan isn’t good enough. Edgerton and Dillow are both asking questions about Industrial Policy and without a different relationship with the EU’s single market, European inward investment will be curtailed.
I have noted much of this on diigo with the tag #budget2024
Image: https://www.freemalaysiatoday.com/category/business/2024/10/31/uks-labour-govt-hikes-taxes-in-first-budget/ Licence: Attribution 4.0 International CC BY 4.0