Michael Burke argues that this Budget will not solve the problems of Britain’ economy or its public services 

A clever Budget.

It made an austerity Budget seem like a big tax and spend one. The austerity-supporting press laps it up, although the neanderthals might criticise ‘Keynesianism’.

In the real world there will be no fix for the economy, public finances or services.

In March 2024 the Tories imposed huge cuts in spending & tax increases, timed after the election. Not imposing most (not all) of that austerity is not ending it.

So, the big increase in tax revenues comes from keeping the Tory freeze on income tax thresholds (1.3% GDP).

Similarly, today’s Budget presents big increases in public spending. But that is only compared to the Tory’s slash-and-burn in March. Government departmental spending as % GDP actually falls over the period of this Budget – from 45.3% of GDP to 44.5%.

The same is true for public investment. Public investment falls in 3 of the next 6 years. Over the entire period it grows by just 1% a year, compared to weak GDP growth of 1.5%. Despite all the talk of the need for public investment, it falls as % of GDP.

Unsurprisingly, real GDP growth does not rise much either. So, for all the talk about delivering growth and investment, there is neither.  Instead there is more austerity; taxes on working people, cuts to public investment and departmental cuts.

Austerity, not tax and spend.

Reposted from the Socialist Economic Bulletin