Tag Archives: tax rises

One of the oddest things about British and American politics is that it remains acceptable to politicians and right-wing commentators to call for cuts in overall taxation without specifying what cuts in spending programmes should accompany them.  After successive Republican Administrations in the USA that have cut taxes and then found it difficult to make comparable reductions in spending programmes, the Trump Administration is at least being ‘honest’ in publicly slashing major federal programmes – through dishonest in suggesting that tariffs will provide a generous new stream of revenue.  In the UK the Mail and the Telegraph, and the Conservative leadership, still attack every suggestion of higher taxation, as well as many proposals to squeeze current spending. 

The Labour Government boxed itself in before the election by promising not to increase the three largest sources of government revenue.  It over-emphasised the potential for returning to faster growth as a means of increasing revenue; and is therefore stuck with multiple crises in public services, while loading extra demands on Council tax in the hope that local Councils will share the blame. The impact of Trump on the global economy increases the obstacles to growth which we (and other countries) face.  Rachel Reeves is hinting at cuts, not only in welfare benefits but also in key public services and public investment.  So what should Liberal Democrats be saying if the government does delay infrastructure investment and squeeze key services?

Across the board, both the public investment needed to revive the UK economy and the public services which support our society are in acute crisis.  The Financial Times last week published a horrifying account of the physical state of some of the hospitals included in Boris Johnson’s unfunded rebuilding programme.  The UK spends much less on government support for research and development than many of its competitors.  The promised AI supercomputer (underfunded in Conservative treasury calculations) has been put on hold; financial support for Ph.D students in STEM subjects, crucial for future innovation, has been shrunk.  The state of Britain’s prisons, after years of under-investment and overcrowding, is appalling.  We have been promised an additional 6500 teachers for schools, but school budgets have not been increased enough to pay for the much-need pay increase for existing teachers, let alone to recruit more.  Similarly we have been promised more neighbourhood police and Community Support Officers, without yet the funding to keep them in place.  We all know that local governments are in desperate financial straits; that social care is a neglected area that is dragging the NHS down with it; and we need to increase our defence budget substantially.