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.
Last week, the price of natural gas dipped below 72p/therm. It was a significant moment. Why? Because according to Ed Miliband's maths, it's impossible. (1/?)
Ed has said, again and again, that swapping gas for wind is not just greener but cheaper. It's at the heart of his promise to lower bills. But as I argue in @thetimes today, it's built on a lie.
When Ed came to power, he commissioned NESO to show that his plans would save money. He claimed the resulting report proved it. It didn't.
A friend points out a £1bn problem with the Budget measures on employee ownership trusts. It's a bad idea anyway - employee share ownership is good! - but it's made worse by a very basic error in the way they've structured it. (1/?)
Under an EOT, a founder sells all or some of their shares to a trust, which passes them on to the workers. They pay no tax on the sale. But they don't get the money straight off - the new trust pays for the shares *from the profits in future years*.
Under the new plan, the govt will restrict the tax relief to half of the shares handed over, meaning the rest will be liable to CGT - so working out to 12% of the value. But it will charge that CGT *straight away*.
On Wednesday, Rachel Reeves is going to stand up and lie to the public. She's not unique. Every Chancellor does. That's because, as a new @CPSThinkTank report shows, our Budget system is fundamentally broken. (1/?)
Every Chancellor claims they'll balance the books by the end of 'the forecast period' or 'the economic cycle'. Every Chancellor, at every Budget, meets their fiscal rules. And yet the debt grows and grows. What's happening?
As I pointed out in my column yesterday, there are all sorts of problems with our five-year forecasts - in the words of Simon Case to @ShippersUnbound, you're trying to land a jumbo jet on a postage stamp. Here for example are OBR predictions vs eventual reality.
‘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.