Tag Archives: public spending

A recent Financial Times op-ed  argued that the UK should now recognise that the Ukraine conflict has imposed aspects of a war economy on the UK – shortages, rising prices, disruptions in supply – which require serious changes in economic policy.  The business pages of the serious press urge higher public investment, spending on education and apprenticeships to raise our woefully-low labour productivity, and government intervention to promote innovation, resilience against supply-chain shocks and sustainability.

Defenders of the NHS point to its much lower spending and staffing per head than comparable European countries half that of Germany and the Netherlands, far fewer doctors and nurses per head and less than half the number of hospital beds – which as the Financial Times says ‘reflect political choices, not what is affordable.’  State schools have been similarly underfunded for many years.  Teachers’ salaries, like nurses’, have been held down to a point where recruitment and retention is difficult.   Conservative MPs and others call for higher defence spending in response to the Russian invasion of Ukraine.  Anyone serious about the ‘levelling-up’ agenda knows that it cannot succeed without a very substantial and long-term financial commitment: an additional 1-2% of GDP over a decade or more.

Yet Conservative MPs, backed by almost all political commentators outside the Guardian, still call repeatedly for cuts in taxation.  Their reactions to Rishi Sunak’s latest emergency package have expressed dismay at the rise in taxes it involves.  Sunak is still promising them that he will find a way to cut taxes before the next election, although neither he nor anyone else says anything about what cuts in spending that would imply.  And the Labour Party is silent on the subject, fearing that the Mail and the rest of the Tory press would love to label them again as ‘the high tax party’.  I saw a Labour leaflet in Wandsworth in the local election campaign that promised that if Labour won control of the Council it would keep Council tax at the same low level – a similar promise to what Tony Blair pledged for national taxation in 1996-7.