Rachel Reeves’s budget of jam today, increase tax bills nearer the election seems to have appeased the bond markets and backbenchers for a while. Your editorial, however, is correct to say that, over the longer term, the economic revival that so many people and businesses crave will only come when the government spends on the scale required (The Guardian view on Labour’s budget: real gains for children and struggling families are a welcome shift, 26 November).
In the Green New Deal Group’s recent report – A Popular Budget – we outlined how, in the run-up to the next election, the government’s survival will depend on funding a massive programme of social and environmental jobs and infrastructure. This requires the government and the other non-shrink-the-state parties to show the courage to demand that elected politicians take back control of the reins of the economy to achieve this transformation. This will mean reversing the independence of the Bank of England and rejecting the dictates of the Office for Budget Responsibility and the bond markets for more austerity.
Our dependence on the latter could have been dramatically reduced had Rachel Reeves’s budget redirected the tens of billions saved by UK residents every year in Isas, premium bonds and pensions into such a social and green transition.
Finally, the jobs programme that could benefit every constituency and would require a range of skills is one which would dramatically increase energy efficiency and decarbonise the country’s 30m homes. This would have the added advantage of helping tackle the job threats from AI. The Nobel prize winner Geoffrey Hinton recently observed that AI will find it hard to excel at physical manipulation, “so a good bet would be to be a plumber”.
Colin Hines
Convener, UK Green New Deal Group
• What is most disappointing about this budget is its predictability. As Aditya Chakrabortty says, ending the two-child benefit cap will placate Labour MPs, but only for a while, “buying the government some time” and “increasing the headroom to meet her own fiscal rules” (A budget to save Britain’s finances? More like Operation Save Our Skins, 26 November). Still no direction, or even any of the much-promised “change”, which could affect Labour’s dire position in the opinion polls. Tinkering when facing electoral defeat by the far right is not the answer, and Labour MPs need to show their continued dissatisfaction.
Those “with the broadest shoulders” again get away lightly; if the equalisation of capital gains tax (CGT) and income tax was necessary back in 1988, it still is. Back then, even Margaret Thatcher’s chancellor, Nigel Lawson, concluded that there was “little difference between income and capital gains and many people effectively have the option of choosing which to receive”. He added that it was “by no means clear why one should be taxed more heavily than the other”. It still isn’t clear, and the opportunity to raise around £16.7bn a year, according to Tax Justice UK, was missed.
There can’t be many voters who think rich workers in the City and elsewhere should pay lower taxes than the rest of us because of loopholes enabling them to be taxed at CGT rates. No wealth tax, or windfall taxes on banks, and no loopholes closed for limited liability partnerships; instead, this so-called “progressive” budget freezes income tax thresholds, so high-earners aren’t affected at all, while thousands of teachers and nurses end up paying more. No, Polly Toynbee, this budget will be remembered not for “taking from the well-off” (This was a Labour budget – it reminds us that there can be a better Britain, 26 November), but for being one of the reasons Labour lost the 2029 election.
Bernie Evans
Liverpool
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