Rachel Reeves pre-emptively justifies tax rises
In Liverpool, Rachel Reeves seemed to a preventive argument before possible tax increases in the November budget.
In his speech on the budget, the key line was the connection of challenging decisions to global winds in the coming months, and the critical re -evaluation of the long -term productivity performance of the UK economy to be delivered by the budget responsibility office.
“We will encounter more tests that make it more difficult with future elections, harsh global winds and long -term damage to the economy.” He said.
This prepares the argument of the government that the government needs more tax increase, and even the important ones in the budget.
First, they will blame the broad global economic ground, trade wars, real wars and increasing government interest rates. “The world has changed,” the chancellor said to the program today.
Secondly, OBR re -evaluating the long -term economic tendencies of England reveals “more clear” evidence that it is “long -term damage” that it will accuse in its predecessors.
Another important call was for the “responsible management of public finances” against the voices of opposition and their parties.
Apart from that, it was relatively light of these policies. Most of the country’s most interested policies – the budget – could not nail and connected to Ping Pong, starting with Obr during the estimation process.
We got new news today. Chancellor has clearly confirmed that it has agreed with the International Monetary Fund on changing the financial dance that creates uninterrupted speculation on tax changes.
With the laws, the OBR estimate must take place twice a year, but this can now only happen once a year. There are various options. This is a implicit acceptance that everyone will benefit from the stability period, regardless of the budget, and that the situation was not like this last year.
Elsewhere he repeated the idea that the election promises not to increase the main tax rates. When asked whether VAT can rise, “Manifesto commitments are standing.”
This seems to be attributed to a world that can change the commitments. As the Prime Minister Darren Jones said: “Manifesto commitments are standing today.”
If OBR’s calculations go against the treasury, these manifesto commitments are clearly pressure. His interpretation of how flexible they were.
He wants to protect the payment packages and “put prices in stores”. This seems to be ignoring a simple increase in the VAT ratio that will directly increase the bills.
Depending on the size of the gap to be announced by OBR this week, there are many other options, especially to the freezing of housing and pensions, tax and pensions to the tax thresholds.
Changes by OBR on the basic growth rate of the UK can significantly contribute to the void of public finances, which Reeves should bridge the budget. The draft details will be presented to him on Friday.
At that time, however, the real work of translating a series of tax offers into a budget starts seriously.
The government will also try to convince OBR, which its policy moves from infrastructure plans to closer ties with Europe, that it can help to grow long -term growth.
It was about leaving some options open today. The scope of tax increases and who is hit, is still very clear to grab.
