Jo Michell in Phenomenal World:
“At the election we promised there would be no return to austerity,” Chancellor of the Exchequer Rachel Reeves explained to the British Parliament on October 30. “Today we deliver on that promise.” The remark came halfway through the newly elected Labour Party’s budget message, a statement shaped around the government’s “mandate to restore stability to our economy.” Prior to the budget, Reeves had been sending mixed messages about how this was to be done. In one keynote speech, she called for a new regime of investment-driven growth, quoting Joan Robinson and Karl Polanyi. Elsewhere, she stuck to platitudes that suggested anything but radicalism. “Just as we cannot tax and spend our way to prosperity,” she said in the message itself, “nor can we simply spend our way to better public services.”
The headline measures announced by Reeves are encouraging: the Labour Party’s autumn budget is the biggest tax- and deficit-increasing budget outside of major crises for thirty years, comprising over £70 billion of new annual spending financed by £40 billion of tax increases and £35 billion (equivalent to around 1 percent of GDP) of new borrowing. Despite pre-election rhetoric about “black holes” in the public finances, Reeves made space for much-needed public investment by loosening rules limiting the issuance of public debt. The scale of the budget suggests that Reeves recognizes the magnitude of the UK’s problems and has the ambition to confront them—yet it remains unclear whether Labour is capable of reversing the decline of the last fifteen years.
More here.
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