THere are two inconveniences if the basic facts about Britain’s economic and budget. The first one: the relentless repeat of labor about its terrible legacy led to the army of critics from left and right almost to eliminate the sadness of our economic situation as political presentation. But a subsequent -flavity -flavity, intellectual losses of conservative governments really left a harmful mess.
The second: While there should be a determined response, it should be more than registering with the gradgrind orthodoxies of the smart wise, pool-foolish “Treasury Brain”. A Labor government should have a believable political vision and some imaginative, progressive ways of massaging a desperate need for more resources for defense, along with the arrangement of our overstretched public services; of strengthening growth and increasing excessive income that does not motivate electoral anger. Not only is the Labor Party and its voters expecting it – as well as financial markets, who understand that economic and political credentials are coherent.
Turn in the first fact – that Britain lives in a tightness. Our international accounts have been in red since 1984, paid through the sale of land, companies and ownership to foreigners, so now we are dangerous worldwide more than its debt to us. At home, the government’s final general budget was in 2000. The national debt was about 100% of GDP; The annual interest payment exceeds £ 100bn and represents close to 4% of GDP. Productivity is difficult and its growth. Our stock market ails, with very few hi-tech growth companies. Britain is not the US or Germany, which can and now take fiscal risks: we are a more powerful economy, certainly with some underlying strengths in our change and our science base, but essentially weak.
To ensure the possibility of an attack on the financial market, anyone who runs the British government will be forced to estimate daily public spending is more than just matched with daily tax receipts over the five-predicted future. It is not a few fiscal rules that the Chancellor, Rachel Reeves, voluntarily imposed on himself to prove his iron credentials; This is a necessary, minimal guarantee of our creditwortiness and sovereign autonomy.
Thus is the expected extensive framework of Wednesday’s spring statement. The office for budget responsibility, given Donald Trump’s attack on the global trading system, will emphasize the certainty of tightness through the noticeable cutting of forecasts on economic growth. By shaving the department’s budgets so that they show the positive real growth in the name only, strengthened by the green paper of the last week with relentless prevention of the growth of health-related payments, the Chancellor is more or less press the required target of daily receipts to exceed exceeding. Luckily and a fair wind, he should avoid repeating the debacle of the Liz Tuss, which will destroy the government.
But this is not enough. And in the second reality. One of the worst mistakes in politics is to think that the more you deny what everyone sees is inevitably enhancing your credibility. False. Everyone will see that British defense expenditure should rise to 3% of GDP or more in the immediate future. And everyone can also see that there is no possibility that the department’s spending on our starred public service and welfare system, driven by extensive poverty, can be more shaved to supply the necessary increases.
In defense, there are three options: carve out defense from the current sum of spending as a separate line item; Explain that geopolitics have changed in the world, and argue for tax increase not only with the wealth of ownership but higher income levels; or apply for membership of the proposed EU defense loan scheme. Carve-outs do not fool markets. The best option is to combine the production of the usual cause with E-even to have a horse trading with reward requests on student visas and/or accessing fishing-while simultaneously providing higher taxes. If fair and reasoning, the electorate will accept them.
Most of the revenues may be provided to defense, but some must be found to head to another cycle of general austerity. Equally, for the sake of it should be further, and better thought by, trying to contain its growth. The best way is to have faith to invest in people. Work opportunities for one in five adults who do not work, and especially for one million 16 to 24-year-olds who are not in education, work or training, should be created and funded (and people are rewarded for changing their behavior). The successful future fund of New Labor has shown the way: as a flexible principle, up to a third of saving by taking someone to the welfare and at work should be offered to the employer as a job subsidy; A third can reward former unemployed as a wage bonus every year they work; While only the last third should go to Treasury. Experimenting with giving young people an annual £ 20,000 give to find work and training; Wales pilots are an amazing success. Create a US civil civil style. Use all leeways that are possible to boost public capital spending. The goal will be a true moral – a mobilization to give those who are unemployed or disabled and the sadness of a chance to live life.
Equal -equal, no growth without growth companies, a stock market flat behind it and subsequently poor levels of investment. A devastating Goldman Sachs briefing, “a very problematic British -low equity -owned equity and potential solutions”, argued that British pension funds have invested less than their own stock market than any other system of pension funds in the world. The result is depressed sharing prices, defensive companies and too small risk of risk throughout the board.
This self-reinforcing Doom loop needs to be broken. Britain requires larger, risky-extraction of pension funds that can support our too buried change capabilities. The government began with this process but, amazing -surprisingly, has been -abjured from the fastest and most effective choice -strengthening public pension protection funds so that it can bring more, smaller pension funds under its wing. But the real change of change, briefly ordered investment, is to request that tax concessions in all forms of investment saving should be the investment condition in Britain.
After the Newsletter Promotion
The sure foot and the growing confidence that Starmer showed in the handling of Trump, Ukraine and the EU now had to be shown at home. Allow the Treasury’s mindset to dominate the policy, and not only the economy will disrupt, it will destroy its government.
Some elements are in place. They need to be included, built and fired – and urgently.
