T.I.N.A.
Higher borrowing costs, lower growth and a health and demographic time bomb mean there is no room for tax cuts or spending increases, this year or next.
That is the damning conclusion of the IFS in its traditional look at the country’s finances ahead of the Autumn Statement. Slightly lower borrowing than expected is no excuse for give aways, which in any case cannot possibly make up for the huge tax rises already announced.
The promised 6 year squeeze on tax allowances and thresholds is a £52 billion a year tax rise, it will drag 6.5 million people into paying income tax and 4.5m into higher tax bands.
It is a multi-year tax rise on people’s take home pay, it is essential because the government has presided over a long period of below trend growth. We would all be thousands a year better off if the trend rate before 2010 had continued. There would be money to spare for higher fuel and food prices, and for the government too.
But until something is done to end that and we get a good few years of high growth the answers are much lower spending, higher borrowing or higher taxes.
There is no alternative.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
By Jonty Bloom Media