The magic money tree
Boris Johnson is the “spend, spend, spend” kind of politician. In one of the Conservative Party’s regular regenerations which put Dr. Who to shame, it is now apparently the party of big government. More spending on the police, more money for infrastructure and the regions. But he has to do that at the same time as massive new spending on covid and its economic consequences.
Something has to give and there is certainly a fight going on in the party as to whether this is all spin or times have really changed. The Chancellor is talking about cuts in other departments, yet again, to fund this new spending. Corporation tax has been increased because apparently that brings in more money, this after decades of being told that cutting tax brought in more money. But corporations don’t moan as much as people when their taxes go up, so there is not that much space for tax increases.
So what has to give? I think the PM will just make the Chancellor borrow more, it is what he does in his private life apparently. The government will still say that the credit card is maxed out, but only to the extent that any of the opposition parties’ policies are unaffordable . It will borrow more over a long period of time and hope that growth picks up enough to squeeze it as a percentage of GDP. I doubt very much if it will, long term growth is in the doldrums, which means hard times ahead for someone, although probably not this PM.
https://jonty.substack.com/