Only when you know where you are, where you want to go and what this will cost can you look at how you pay for it

Prominent story in The Times today about how Rishi Sunak is planning large tax cuts. Suspect it’s a dead 🐱 as our Government has hugely increased both expenditure and tax (NI). The Conservative dream of a lower tax economy is a long way away.

You cannot cut tax without cutting what it pays for

It is intellectually and economically illiterate to predicate tax cuts without simultaneously addressing public expenditure – in detail. Indeed you have to start with the latter. The main public debate (if there is to be one) needs to be on what we as a nation want to provide in the way of public services.

Major areas of expenditure like the Health Service and Social welfare have inbuilt cost escalations determined by the ageing and increasingly longer living population. They also underdeliver because of historic cuts mostly from the austerity of administrations since 2010. There is catch up necessary to reach an acceptable standard of public services now before you commit to cover the inevitable higher costs of demographics in the future.

As well as the need to fund higher running costs there is the need to make capital expenditure commitments to replace old and inadequate infrastructure. Especially transport where, for example, our rail system is tired and failing.

The public/private debate is often simplistically ideological. It really doesn’t matter who provides public services so long as they are well run, affordable and accountable. That is clearly not the case with nearly all of the privatisations of the 1980s and 1990s. New partnership models are needed to address this iniquity.

Only when you know where you are, where you want to go and what this will cost can you look at how you pay for it. Public expenditure and tax are two sides of the same coin.

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