The Chancellor faces a difficult Budget.
There is little room to manoeuvre on tax or borrowing. Households and businesses are under enormous pressure. Long-term government borrowing costs have reached their highest level for decades. Yet Britain desperately needs investment.
In an attempt to reassure the markets, John Healey has earnestly pledged his allegiance to the fiscal rules. It’s a 30-year tradition. But, since 2008, Chancellors have increasingly struggled with the choices the rules produce.
We have seen the consequences.
Covid exposed an NHS with too little spare capacity. The energy crisis exposed our dependence on volatile oil markets. The hottest summer ever has demonstrated the threat that global warming poses to our infrastructure.
In an essay published yesterday by the New Economics Foundation, I argue that we need to change the question at the heart of every Budget from “What can we afford to borrow now?” to “What investment do we need to make to be better off tomorrow?”
It’s not an argument for borrowing more. It’s an argument for better spending.
While we must maintain debt discipline through strong rules, there are three fundamental problems with wider fiscal management that I believe we need to fix.
First, is the crude distinction between investment and day-to-day spending. Buying a tank is treated as investment. Training specialists to defend us from cyber attacks is not. We need to broaden how we define investment to recognise the value of people and skills.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
A Week in Politics #7
The Lives of Others: a powerful film about art and the Stasi
The Joy of Six 1582
Smugglers and pirates in Gower
Surgery tomorrow
Tim Rogers 
Kevin Hawkins 
David Blake 
Christopher Burden 
Graham Evans 