Autumn budget should have been more courageous in investing in people and public services, says NEF

The autumn budget was a bold step towards investment in infrastructure, but should have gone further in invests in people and public services, according to the New Economics Foundation (NEF), in response to Rachel Reeves’ presentation of the autumn budget today.

Danny Sriskandarajah, chief executive of the New Economics Foundation, said:

“The chancellor took the bold and correct decision of redefining public debt to enable her to invest in our vital infrastructure. This has created a massive opportunity and represents one of the biggest shake-ups of the fiscal framework which has been holding us back.

“But I wish she had been courageous enough to make sure the wealthiest pay their fair share of tax, so we can support in the poorest in society, and rebuild our vandalised public services. Making vital investments in physical assets, without seriously investing in people and public services, is like trying to drive a car with the accelerator down and the handbreak on — it’s just not going to get us where we need to go. A new school building won’t stop kids coming to class too hungry to concentrate.

“The chancellor could have gone much further, and with bolder changes to taxes and borrowing, she could have spent more on urgent changes, like lifting children out of poverty by scrapping the two-child limit, or keeping bus fares low for people around the country.”

Hannah Peaker, director of policy and advocacy at the New Economics Foundation, said:

“For too long, the income some people get for simply owning things — like stocks and shares — has been taxed less than the income most of us get from work. Today’s changes to capital gains missed the chance to make sure income from work and from wealth are taxed the same, and failed to close the loopholes that mean the wealthiest get away without paying what they owe.

“Tax is a tool. It pays for the care workers who look after us, the buses we ride, and the teachers who educate our kids. But it is also an important mechanism for putting the brakes on runaway inequality. There is simply too big a gap between the richest and poorest in the UK today and it hurts us all.

“Taxing income from wealth the same as from work is just common sense. The chancellor should go further in the future: equalising capital gains tax with income tax could raise up to £14bn a year. It would enable this government to raise billions of pounds for public services while making sure everyone pays their fair share.”

Notes

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