What options does Rachel Reeves have for the Budget?
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The budget coming up in a few weeks will be one of the big moments for Labour to set out their policy agenda.
Over the summer, the government set out what it considers a difficult public finance picture - including a supposed £22bn ‘black hole’. The Labour manifesto promised big improvements to public services, and the prime minister has since promised no return to austerity. Meanwhile, the chancellor has promised that the upcoming Budget will be a ‘Budget for investment’. And there’s those promises to get debt falling, and not to raise the main rates of income tax or corporation tax, or to raise national insurance or VAT at all.
So how could they meet their fiscal targets while also fixing public services and increasing investment? What is the public finance picture looking like? And will there be enough resource to tackle some of the challenges facing the UK economy?
To explore these questions, Paul is joined by Carl Emmerson and Ben Zaranko.
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00:00 Introduction: Fiscal Challenges
00:19 IFS Zooms In: Live Announcement
00:59 Anticipation for the Upcoming Budget
02:04 Public Finance Overview
05:32 Public Service Spending Dilemmas
12:15 Investment and Fiscal Rules
15:29 Debate on Debt Definitions
17:37 Strategic Choices for Investment
18:24 Government's Investment Strategy
18:52 Public Sector Net Worth Explained
20:05 Challenges of Public Sector Net Worth
23:28 Constraints on Government Borrowing
24:14 Balancing Investment and Borrowing
26:38 Impact of Investment on Public Services
28:35 Rachel Reeves' Budget Choices
34:37 Conclusion