Here’s proof that Reeves’s £22 billion ‘black hole’ is no big deal: the Office for Budgetary Responsibility reckons pressures caused by an aging population and an overheating planet will put far greater strain on the public finances.
Over to Mike Brewer of the Resolution Foundation (from its Top of the Charts email):
The Chancellor and her predecessor have been busy arguing over whether there really is a £22 billion overspend/black hole in public spending this year. It bears a striking resemblance to two flies having a blazing row while they’re stuck in a web and the spider is approaching.
Buy Cruel Britannia in print here. Buy the Cruel Britannia ebook here. Or just click on the image!
The spider in this instance, being the OBR’S fiscal risks and sustainability report. A £22 billion one-year overspend (although some will probably affect future years too) really is small fry for a country that is getting older, and a planet that is getting warmer.
The OBR projects that the spending pressures from these shifts could increase government spending as a share of GDP from 45 per cent today, to 60 per cent in the 2070s – an increase equivalent to around £400 billion in today’s money.
£400 billion! That’s nearly 20 times what Reeves is fussing about now.
But Mr Brewer adds that he doesn’t think too much importance should be placed on 50-year predictions like this:
But they do help to put a lot of the arguments being made today back in their box. It’s just not credible to think that taxes don’t need to rise in an ageing society, or that wavering on net zero is good for the public finances.
On a more positive note, the OBR notes that these spending pressures can be absorbed without debt increasing as a share of the economy if productivity growth returns to its pre-financial crisis trend.
In other words: Reeves doesn’t have to cut any spending at all if she only takes the brakes off the UK economy – brakes that were put on the economy by Tory austerity, and seem to be getting extra use now, thanks to Labour’s determination to continue that ridiculous policy.
Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:
Be among the first to know what’s going on! Here are the ways to manage it:
1) Register with us by clicking on ‘Subscribe’ (bottom right of the home page). You can then receive notifications of every new article that is posted here.
2) Follow VP on Twitter @VoxPolitical
3) Like the Facebook page at https://www.facebook.com/VoxPolitical/
Join the Vox Political Facebook page.
4) You could even make Vox Political your homepage at http://voxpoliticalonline.com
5) Join the uPopulus group at https://upopulus.com/groups/vox-political/
6) Join the MeWe page at https://mewe.com/p-front/voxpolitical
7) Feel free to comment!
And do share with your family and friends – so they don’t miss out!
If you have appreciated this article, don’t forget to share it using the buttons at the bottom of this page. Politics is about everybody – so let’s try to get everybody involved!
Buy Vox Political books so we can continue
fighting for the facts.
Cruel Britannia is available
in either print or eBook format here:
The Livingstone Presumption is available
in either print or eBook format here:
Health Warning: Government! is now available
in either print or eBook format here:
The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:
Here’s proof that Reeves’s £22 billion ‘black hole’ is no big deal
Here’s proof that Reeves’s £22 billion ‘black hole’ is no big deal: the Office for Budgetary Responsibility reckons pressures caused by an aging population and an overheating planet will put far greater strain on the public finances.
Over to Mike Brewer of the Resolution Foundation (from its Top of the Charts email):
Buy Cruel Britannia in print here. Buy the Cruel Britannia ebook here. Or just click on the image!
£400 billion! That’s nearly 20 times what Reeves is fussing about now.
But Mr Brewer adds that he doesn’t think too much importance should be placed on 50-year predictions like this:
In other words: Reeves doesn’t have to cut any spending at all if she only takes the brakes off the UK economy – brakes that were put on the economy by Tory austerity, and seem to be getting extra use now, thanks to Labour’s determination to continue that ridiculous policy.
Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:
Be among the first to know what’s going on! Here are the ways to manage it:
1) Register with us by clicking on ‘Subscribe’ (bottom right of the home page). You can then receive notifications of every new article that is posted here.
2) Follow VP on Twitter @VoxPolitical
3) Like the Facebook page at https://www.facebook.com/VoxPolitical/
Join the Vox Political Facebook page.
4) You could even make Vox Political your homepage at http://voxpoliticalonline.com
5) Join the uPopulus group at https://upopulus.com/groups/vox-political/
6) Join the MeWe page at https://mewe.com/p-front/voxpolitical
7) Feel free to comment!
And do share with your family and friends – so they don’t miss out!
If you have appreciated this article, don’t forget to share it using the buttons at the bottom of this page. Politics is about everybody – so let’s try to get everybody involved!
Buy Vox Political books so we can continue
fighting for the facts.
Cruel Britannia is available
in either print or eBook format here:
The Livingstone Presumption is available
in either print or eBook format here:
Health Warning: Government! is now available
in either print or eBook format here:
The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:
you might also like
Boris Johnson’s ‘Garden Bridge’ failure cost you £53m. So much for Tory financial responsibility
Johnson stumbles again as child poverty cash handed back to Europe unspent
Investigation launched into money spent on Boris Johnson’s ‘no deal’ Brexit