Keir Starmer, in commenting on the recent Budget, said “Britain in recession, the national credit card maxed out, and despite the measures today, the highest tax burden for 70 years”. The analogy of maxing out the nation’s credit card has been repeated by other Shadow ministers. Rachel Reeves, Shadow Chancellor, has joined many Conservative ministers in saying there is no ‘magic money tree’.
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1w ago
in commenting on the recent Budget, said ..read more
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[2] Chris Dillow uses the lack of spare capacity in the economy to make the case for Labour to keep a tight fiscal stance, but he also argues against the kind of increase in both spending and taxes that I propose here. I cannot do justice to his arguments in a footnote, but he doesn't tackle a key part to my argument, which is that the next government is going to have to break their current pledges of no tax increases at some point over the next five years anyway, and it would be politically..
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1w ago
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In addition, an essential part of improving UK productivity growth and reducing regional inequality involves better transport links outside London. It is ridiculous that we seem almost alone in Europe in being unable to link our major cities with high speed rail, and thereby help relieve chronic congestion in the existing rail network. There seems like there is almost universal agreement among economists that the UK needs more public investment to end its current stagnation, and public..
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1w ago
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However ignorance is only one half of the story. The other is that this perceived toxicity suits the political agenda of those that dominate media discourse. Hardly anyone asks why it’s seen as good for the private sector to borrow to invest, but problematic for the public sector to do so, because those questions are not posed by journalists working for the right wing media. City economists are viewed as experts when, on average, they clearly have a right wing bias, as well as an incentive..
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1w ago
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But from the point of view of many on the peaceful protests, their concern about what is happening in Gaza is not just “human angst that we all feel about the terrible suffering that war brings to the innocent” but what an international court has found may amount to genocide.
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2w ago
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I think it is worse than that, and these fears were confirmed by the Prime Minister’s No.10 lectern statement on 1st March. At first sight, and to most media commentators, that statement was a fairly standard call for unity and tolerance in the face of differences, and an attack on extremism. Much of it was that, but the statement bears closer inspection. All quotes until the final paragraph are from the statement.
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2w ago
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The Hamas attack on 7th October and the subsequent invasion of Gaza were inevitably going to lead to increased tensions, concerns and anxieties among Jewish and Muslims in the UK. It would be a statesman-like act from a Prime Minister to try and speak to those tensions and calm anxieties, including to those Rochdale voters. This is particularly the case when the UK government, and to a considerable extent the media, are not neutral. The UK supplies arms to Israel, and the government has..
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[2] What they also did was starve the NHS of investment, which was bound to decrease efficiency, and privatize increasing amounts of its provision, which reduced the quality of provision.   
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Austerity 1.0 is a key reason why the UK’s recovery from the Global Financial Crisis recession was so weak, and austerity also played an important part in influencing the Brexit referendum result. The damage caused by Truss we all know, while the game played by Hunt/Sunak is in danger of preventing Labour doing enough when they gain power. The dire state of the NHS is also directly influencing the economy. As the OBR notes, the number of inactive working age adults has increased..
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2w ago
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Then came Brexit and Boris Johnson. Johnson understood that trying to make Brexit work while continuing to shrink the state was politically impossible, so he undertook a partial and limited (in scope) reversal of Austerity 1.0 by raising spending on the NHS, schools and the police. This would inevitably mean a large increase in taxes, undertaken by then Chancellor Sunak for reasons he clearly set out here. Even without the intervention of Covid it is unlikely the additional spending would..
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