Paddington Bear wrote: ↑Fri Nov 01, 2024 12:15 pm
Biffer wrote: ↑Fri Nov 01, 2024 11:59 am
Paddington Bear wrote: ↑Fri Nov 01, 2024 11:52 am
If you can point to where I said they should have done nothing I will concede that you have made an excellent point
I can't recall you stating anywhere what you think they should do. Only what they shouldn't.
I am neither the chancellor nor her shadow and this isn’t the House of Commons!
Some ideas though:
My preference for tax raising is VAT. Higher rate for luxuries and far fewer if any exemptions. You raise more revenue, reduce the byzantine complexity of the tax system and (I have no proof for this) I think it is politically more sustainable than hiking income and NI.
What I see from the public services I interact with (primarily Justice and NHS) is that the primary issue is capital spending or lack of it not day to day. The £22bn pumped into the NHS for day to day spending is lost money, I’d far rather see it invested. If you look at trusts who have been successful, they tend to be ones that have got up to date equipment and non leaking roofs. There’s more staff in the NHS than there was 5 years ago and they see fewer patients, no point sending £22bn more of good money after bad.
Similarly the justice system needs better digital systems and physical court facilities far more than more clerks or judges.
I’d scrap the triple lock and freeze pensioner benefits for a Parliament. Harsh but the same has happened to just about every other benefit. That frees up billions a year in capital investment.
Overall the whole thing is dependent on economic growth, which Labour have professed to understand but have delivered a budget that doesn’t seem to get it to 2%pa. Planning reforms seems to be our silver bullet there, I’d steamroller through the system a fleet of nuclear power plants, and redesignate the area inside the M25 as a Special Economic Zone with zoned planning allowing for major building. Same around Cambridge. Manchester and Leeds seem to manage development fine without this but it would be available to them if they want it.
Ok, so
For VAT, it depends how much revenue you want to raise. A 1p rise would get you £6.7bn. Is that enough? VAT is also inflationary, so higher interest rates for longer, given it's the only tool available to the BoE - raising gilt prices same problem as Reeves has. It's also far more visible to the average worker as it's money directly out of their pocket (rather than out of a hypothetical future pay raise which is what the effect is for employer NICs).
Capital spending is a big issue, it's been butchered by the last fifteen years. But what do you do in the meantime? Accept NHS waiting lists, A&E times, dental & GP appointments getting longer in the minimum three years it takes you to build new hospitals etc? If you're talking repairing current assets, where do you do work in the meantime with no extra funding to rent anywhere? Or do you just make the waiting lists even worse? Do you say to people who are will 'try not to die while we're building a new facility?'. Or do you increase throughput in where possible in the current facilities until the new ones are working - which means added revenue spend.
If you're talking about new capital equipment only that's a shorter lead time but it's still far from instant. But in the UK we have fewer beds per person available across the population, as well as fewer MRI / CATSCAN / etc machines than comparable countries. So, do you just want to apply service cuts while we're waiting for the capital investments to come on line?
Do you want to borrow for capital spend or take it out of annual revenue? If so, are you just looking at a 1p rise in VAT for that or more substantial? If you want to borrow, you'll have the same gilt problem as Reeves - added to the one you've caused by increasing VAT. If you want to do it from revenue, it's either more raised tax or cut spending elsewhere or increase borrowing.
If you want to increase the numbers of doctors and nurses to do this, you need to increase revenue spend again. But to do that, you'll need to reach consistent settlements with the unions over pay rates, which will need to be ahead of inflation - so more revenue raised from VAT, more pressure on gilt prices. An d probably more immigration to recruit these folks from overseas (we'll train more while we're at it, but that takes multiple years and is further cost so more revenue needs to be raised)
I don't have a problem with changing the locks on pensions, but it means you're virtually unelectable. Very difficult to navigate. And if you want a double term to facilitate real structural economic change that's something you need to consider
Growth - I personally take the view that the budget is where you set a framework for a growth economy. Tory policy has been 'set the framework and entrepreneurs will just fill the gaps' and that quite obviously hasn't worked. This budget to me is the baseline - could have been better could have been worse. The key to growth is the industrial strategy which is still 6 months away (far too long in my opinion, should be getting pushed through more quickly) which will then allow the R&D spending, economic development spending etc to be targeted to high growth, high productivity industries and methods to increase productivity in the economy (some of these purely governmental, some purely private industry, some mixed). We haven't had an industrial strategy for a long time, and I personally think that's why our productivity and growth are poor: industry has no idea what the vision of the future is and as such is very reluctant to invest. This is presented to them in a number of ways - industrial research support has been set out on a year by year basis for most of the last ten years, so no certainty in long term product development work, which is most of high tech engineering where you get the high value manufacturing and jobs from (e.g. Germany, but France and Italy and the Netherlands are much better at this than us too).
Changing planning is a monumental task and trying to steamroller it will tie you up in the courts for a long time. But I don't know enough about planning to have an idea how that should be fixed. But actually employing civil engineers to run the government departments tasked to do it, and accepting you've got to pay them the big wages they'd get in industry to do so, is a critical part of it.
