Kicking The Can
Ben Wildsmith
In characteristically belligerent interviews following the announcement of her budget, Rachel Reeves predicted that she would be in her job until the next election, making decisions to grow the UK economy.
This would have come as a surprise to the Office for Budgetary Responsibility, which announced that the budget would have no effect, positive or negative, on forecasts for growth. Nada. Zilch.
The markets seem, for the moment, to have reacted to the budget with a shrug. For all Reeves’ blustering tone, her decisions are remarkable only in their inconsistency to the spirit of previous pledges not to increase the tax burden on working people.
Caught between potentially mutinous backbenchers and Truss-slaying bond markets, Reeves has played it safe and kicked the can down the road once again. She gives the impression that if she’s still in a job after Christmas and bond yields haven’t risen to threaten bankruptcy, then that’s good enough for her.
Is it good enough for us, though? If you are neither a Labour backbencher, nor an international financier, do you feel reassured that things are on the up here in the UK? The OBR reports that people are beginning to save money that they might be expected either to spend or invest. People are unwilling to take risks because life feels so precarious. If the government is relying on growth to fund future ambitions, then a lack of consumer confidence is an urgent problem.
In the wider world this week, extraordinary changes were either happening or being suggested. On budget day itself, Hewlett Packard announced it was cutting 6000 jobs as it turned to AI to speed up product development.
I am struggling to think of a UK politician who is engaging with this issue at all, beyond the Prime Minister’s gleeful embrace of data centres as a source of fast cash. Here, we are told, is where the mythical growth will come from. Environment-taxing, football pitch-sized banks of servers will power the UK back to competitiveness as they boost efficiency and slash costs in all sectors.
That’s great until you realise that the cost being slashed is you. Do you remember when all schoolchildren needed to learn to code?
Yeah, sorry about that, kids, your AI replacement doesn’t suffer from anxiety, take time off to have children, or answer back.
The government hasn’t forgotten our young people, though. As negotiations to end the war in Ukraine continued, the Prime Minister was once again insisting that British troops be deployed to police the ceasefire.
Ukraine
Support for Ukraine is widespread in UK society, but I don’t think I’m alone in wondering why our government is so conspicuously at the front of the queue to offer our money and soldiers to the cause. If our young people need to be deployed in the service of peace, so be it, but Starmer’s eagerness seems out of place when no deal has yet been reached.
Like the open-ended £3 billion per year he authorised to Ukraine, and the 100-year partnership he signed with the country, it seems to expose UK interests and personnel without any guarantee that we can meaningfully influence events.
The budget rearranged matters to the mild irritation of some and the limp approval of others. Around it, we were further conditioned for war with Russia, whilst the prospect of AI decoupling economic growth from human prosperity altogether went unaddressed.
Critiqued
On Andrew Marr’s radio programme, a government spokesman defended the budget before it was critiqued by the opposition. The opposition, for Marr, meant the Conservatives and the Liberal Democrats.
Despite Reform UK and the Greens clearly outperforming the old guard in the polls, it was business as usual. Politics seems to trundle along in a bubble of self-congratulation whilst unprecedented storm clouds gather above us.
As we squirrel away whatever we have, feeling the peril of the moment, our politicians lack the imagination to face reality at all.
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UK Labour kicking the can is an understatement. The budget was a plethora of face-saving exercises with very little for Wales if you delve deep enough. It’s give with one hand take back with a fiscal fist in the face. Yes, £500 million is coming to the Senedd because England has first bite of the cherry. But don’t get too excited. Less we forget. The £4 billion HS2 consequential rightfully ours effectively stolen by both the Conservatives & Labour in London missing from our Senedd coffers. Both Scotland & NI are not only receiving their HS2 consequential annually but will… Read more »
“Our politicians lack the imagination to face reality at all”. True; but mainly because the public doesn’t want to face reality either. That reality is not a choice between higher tax and spending cuts. It’s both and that is why the can gets kicked down the road.
Yes, we have become used to the idea that taxes are bad, curtesy of the Conservative Party. And yet, we want an NHS and public services. We seem to have become politically illiterate.
Financially illiterate I think.
It’s incredible to think by the end of this parliament 11.3% of GDP (not even government spending) will be on welfare spending and 13% of government spending on servicing debt, according to OBR. We’re totally screwed!
The government plans to reduce PiP would have reduced it from 11.3 to 11.15, and they backed down due to backbench pressure!
Half that welfare spending is state pension benefits. We could stop giving it to millionaires tomorrow.
That’s the problem with universal benefits – you can’t – but it’s not enough anyway. Getting rid of the triple lock would be better.
Yes Peter, you keep repeately posting this. Yet fail to say that its mainly for in work benefits propping up large companies who pay their workers poorly.
Fair point. There is virtually no aggregated data to confirm this, but at best it’s about 1/4 work for ‘large companies,’ maybe as low as an 1/10th of claimants. Social care, retail, education and hospitality represent the bulk of claimants. Maybe two minimum wages are needed, but in any case those large companies will add the costs to consumers. To add, I raise this issue -not because I’m such a cold hearted Tory, but because I can see the skewered effect it’s causing to other public services, most notably education, which have had real term cuts every year for the… Read more »
Supporting Ukraine is the best guarantee of security for the UK. Yes, it will cost, what’s the alternative.The days of feeling safe because we are an island are laughable. Brexiteers are not happy with our increasing collaboration with our European neighbours, but this is an existential moment for the West.