Now is your chance to see if you would deliver national renewal
The Budget is due on November 26. Like all Budgets it will enable the Treasury to set the spending limits within which all other departments must stick. In this way, the Budget controls the strategic options open to every other department.
The Prime Minister has repeatedly spoken about delivering a decade of national renewal – tackling the cost-of-living crisis, reducing poverty (which is now running at almost one child in three), rebuilding the NHS whose condition was described by Lord Darzi’s independent review as “critical” and reinvesting in education, fixing our crumbling national infrastructure and rebuilding our run-down defence forces.
But you, as Chancellor, have defined some Fiscal Rules, which you are determined to stick to. Can you do both? Can you deliver national renewal without breaking your own fiscal rules?
Playing the Budget game
The Financial Times has produced a Budget simulator, which will enable you to find out. In principle it is easy to use: you just decide what you want to achieve, and then set your Budget accordingly.
A do-nothing Budget
Success is not automatic. The simulator comes with pre-set suggestions; if you simply accept all of these – i.e. you do not take any decisions of your own – this is what you will see at the top of your results screen:
That doesn’t look bad, but the small text reveals that you have failed to deliver national renewal. For example, it tells you:
- Relative to inherited plans, you’ve raised day-to-day spending by £0bn a year by 2029-30. You have opted against big changes to spending, leaving a harsh outlook for many departments.
- Relative to inherited plans, you’ve raised investment by £0bn a year, taking public investment to 1.7% of GDP by 2029-30. This leaves investment close to its 25-year average as a share of GDP, but it will do little to restore our railways, schools and hospitals
- “You haven’t made big changes to the amount of tax that will be collected, but taxes are still heading towards the highest levels in eight decades as a share of GDP;
- We will need to show money raised from taxes will be used to deliver better public services, but we are imposing a ferocious squeeze on many government departments. Your first Budget is going to be a very hard sell!”
So, if you want to deliver national renewal, you will need to take some tough decisions.
Fortunately, you have two big advantages over a real Chancellor if it all goes badly wrong:
- you have not damaged real people’s lives; and
- you can always have another go.
Just click here and have a try.
What is this telling us?
If you have used the simulator a few times, you will probably find that you have a choice: you can deliver national renewal, or you can stick to your fiscal rules. There does not seem to be a way to do both. (If you think you have found such a way, please describe it in the comments section below).
In our recent meeting in Parliament on Fiscal Rules, we explained to MPs why this is no game: the Chancellor really does face that choice. She can help deliver national renewal, or she can stick to her fiscal rules. She cannot do both.
She has said that she is not afraid to take tough decisions. She is facing one now: will she have the courage to replace her fiscal rules?
Conclusion
If you think your MP should be aware of this stark choice, send them a link to this article and encourage them to see for themselves what choices the UK is facing.
And if you are not a member of the 99% Organisation, take a look and join us.
3 comments so far
I remember working in UK factories in the 1970s, when taxes and government spending were higher and there was less blatant inequality. The average working man could afford to support his family, and most seemed to be able to make ends meet quite comfortably. Then the Thatcher/Reagan “reforms” cut taxes on the better off to “incentivise entrepreneurs and hard work” and cut government spending, shifting resources from society to rich individuals. Mrs Thatcher said “there’s no such thing as society”, but she seemed to be unaware that – like ants – humans are social animals, and we all depend on “society” – just look at even the most basic human ways of life, or the happiest countries today. She and her faith in “the market” gave far too much power to money, and this “market capitalism” has now impoverished the 99%. Capitalism is a hugely powerful way of removing money from the less powerful to the more – unless ruthlessly regulated, when it works quite well. But now software means you can replicate a successful invention at almost zero unit cost and spread it round the world incredibly quickly, so we are facing huge growth of the super-rich and monopolistic global mega-corporations. “All power corrupts…” so some ego-centric super-rich are now able to manipulate governments and perpetuate this model. We need to act on the insights Mark E Thomas set out.
The Treasury provides far too many loopholes / special treatments to allow the richest members of our society to get away with not paying their fare share. Here are just a few that need to be tackled:
1 The cliff edge of NI from 12% to just 2% meaning that higher earners do not contribute to the NHS (theoretically!) in the way they should.
2 The special tax treatment accorded to investors that achieve no economic or social end, and simply provide a means of reducing tax liability.
3 Family trusts that allow the wealthiest families to flow assets inter-generationally, especially land, while minimising tax, while using these assets to capture further income and asset appreciation shielded from tax.
4 Stop claiming to prioritise growth while chopping off the incomes of people who would spend any additional income in the UK economy, supporting jobs and economic activity.
5 Tackle the growing rentier class of small-scale, poorly regulated landlords who are bidding up house prices, forcing young people into renting, but then managing the properties poorly and in the interest only of extracting icome. Someone’s home should not be prioritised as someone else’s pension pot, leaving the tenants to face low maintenance and investment and the wider community to face the longer-term risks.
Go get them!
Hi comrades,
her first priority should be
to tackle the cost of living crises.
Which is caused is by the very rich,
namely the reckless behaviour of
the bank of England. Re-introduction
of regulation, that was an F.D.R POLICY
after the wall street crash. Curb inflation
and, if will prevent people putting in for
more wage increases. cutting V.A.T.