As the country prepares for Budget-geddon, there is one precedent that the govt is desperately clinging on to: 2002, when a Labour government raised income taxes - and shot up in the polls. How did they do it? (1/?)
In 2002, Gordon Brown raised NI by 1p to fund a historic expansion in NHS spending - in pursuit of Tony Blair's (impromptu) commitment to match European health spending. It was, as the then health secretary said, 'overwhelmingly popular'.
Today, things are v different. But polling by @SteveAkehurst suggests that voters in general - and Labour 2024 voters in particular - might be happier about the govt getting waiting lists down than they would be angry about taxes going up, esp if those taxes are on 'the rich'.
@SteveAkehurst This is why Reeves is now making the argument - as she did last year - that she needs to raise taxes to protect Our Precious NHS. Setting things up come election time for the familiar strategy: '24 hours to save the NHS', 'we'll protect it, Farage will privatise it' etc
@SteveAkehurst But as I say in my column today, there are two big problems.
The first is the politics. It isn't 2002. Everyone feels poorer. Angrier. Hates the govt. Brown really did roll the pitch, but they've haven't. Indeed, we all know they're raising taxes simply cos they're out of cash.
@SteveAkehurst But the second problem is even bigger. If you're going to raise our taxes to fix the NHS - especially two Budgets in a row - you need to fix the bloody NHS. And they haven't, and almost certainly can't.
@SteveAkehurst In her speech last week, Reeves said falling waiting lists showed her plan was working. But waiting lists aren't falling! They came down by 200k between Sept 24 and Feb 25, and been basically flat since. And the tax rises to pay for that knackered the economy (as these will too).
The govt is claiming NHS productivity is up. But as I pointed out the other day, you only get to claim that by fiddling the figures. In fact, it's been going down.
And the cost pressures on the service are huge. Here's just a sampling of recent headlines from @thetimes.
Insiders say that Wes Streeting's big reform - the abolition of NHS England - is basically in limbo, and as @HSJEditor says there is huge uncertainty/confusion amid the top ranks
More broadly: Blair/Brown raised taxes, cut waiting lists, and won re-election. But NHS spending in Blair's first two terms rose by 7% above inflation per year. Streeting is getting less than half of that. And the demographics are brutal - just look at A&E attendance/month.
In short, as I say in my column, the govt's message is: 'Your taxes are going up to save the NHS, no really this time'. I'm pretty sure the public won't buy it. But I'm very sure they won't buy it if the NHS doesn't actually get saved. Have a read here thetimes.com/comment/column…
PS My favourite thing about @SteveAkehurst's polling is the perennial finding that people would be more upset about a rise in National Insurance than income tax, even though they are taxing the same thing in the same way.
‘If you want to raise serious money, it is a childish fantasy to pretend that you can do so solely from the few rather than the many.’ Me in @thetimes today on why Labour MPs and activists calling for a wealth tax need to grow up fast. Thread fellows (1/?)
The same Labour voices who blocked welfare reforms, forcing Reeves to raise taxes, are now calling for all manner of other goodies - while pretending that the necessary tax rises can be simple and painless. But they absolutely can’t.
As I point out in my column (link below), we already tax the rich! Let’s look at the income tax stats.
The problem isn’t that the Chancellor is going to raise taxes. It’s that unless something drastic changes, she and her successors are going to have to do it again, and again, and again. Me for @thetimes - thread follows (1/?)
My column today is on Reeves’s tax rises. But my core argument is that what we’re seeing is the earlier-than-expected arrival of what’s always been coming - an irreconcilable clash between how much we want to spend, and how much we can afford to. thetimes.com/comment/column…
Obviously, Labour’s tax rises, and the summer of uncertainty that preceded them, were horrendous for growth - and as @ArmitageJim says in this great analysis piece, we’re in for exactly the same summer thetimes.com/uk/politics/ar…
I am normally a slavish devotee of @Dannythefink, but I think this on the Online Safety Act misses the mark profoundly (1/?) thetimes.com/comment/column…
Danny's thesis is that the OSA has just come in, and we should approach it with an open mind until we know how it's actually working. But that ignores everything about how the OSA was put together, and in particular the staggering ignorance shown by lawmakers during that process.
Everyone who knew even the slightest bit about tech had profound concerns about this law, ranging from the core idea of 'legal but harmful' speech, to the chilling effect on tech investment, to the way a law meant to target Google/Meta would actually entrench their dominance.
New analysis from @CPSThinkTank today shows the state is spending almost £24k for every adult in the UK. As I say in my column, this means we are likely spending more than *every single one of us is earning*. And it’s only going to get worse. (1/?)
Why is it going to increase? Because of the lie at the heart of the spending review. Reeves wanted to end austerity - but there wasn’t any money. So she put all the increases into the first half of the parliament.
That means Labour is set to go into the election off the back of more ‘Tory austerity’ - overall departmental spending rising by just 1% a year, but much, much less for most departments given that includes 3% pa for the NHS (which is, as ever, getting most of the extra cash).
Starmer says Whitehall is filled with 'a cottage industry of checkers and blockers'. It’s too hard 'for the most enterprising people in country to just get on with the job'. So he's going to cut compliance costs for firms by 25%. Great! Just a few minor problems... (1/?)
In his speech, Starmer cited Alison, a brewer and publican, who has to spend hours filling in forms. But Alison is about to be hammered by NIC rises and minimum wage hikes!
Then there's the Employment Rights Bill, voted through the Commons on literally the same day as Starmer's speech, which will... raise compliance costs for business, by between £0.9bn & £4.5bn (though we'll come back to that).
Welfare reform is not just a fiscal necessity, but a moral one - because as I argue in @thetimes today we're not just paying people off, but writing them off. (1/?)
The govt is set to announce a rumoured £5bn in benefit cuts. It's already hugely controversial. Yet as I point out in my column today, it would cover just 1/16th of the predicted increase in the welfare bill. thetimes.com/comment/column…
Of course, a lot of that is pensions (hi, triple lock!). But the other big driver is ill health. Today, 9.3 million people of working age are economically inactive, and 6m on out of work benefits. Of those, 2.8 million are inactive due to illness - up from 2m before the pandemic.