The New Statesman | UK politics and culture

Budget 2024: Will Labour's gamble pay off?

Oct 31, 2024

Ben Zaranko, a Senior Research Economist at the Institute for Fiscal Studies, breaks down Labour's first budget in nearly 15 years. They discuss the £40 billion tax increase's impact on public spending and the NHS. The conversation delves into the risks tied to increased borrowing and the shift toward a social democracy strategy. Zaranko highlights potential long-term benefits of frontloading investment, while also considering the global economic challenges and implications of US elections on UK trade.

26:09

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Ben Zaranko

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Quick takeaways

The Labour budget presents significant tax increases aimed at enhancing public spending, particularly for the NHS, which has raised concerns about traditional interventionism.

There are risks associated with the budget's reliance on increased borrowing and taxation, potentially straining businesses and complicating long-term growth strategies if anticipated returns are not realized.

Deep dives

Impact of the New Budget

The recent budget has introduced significant increases in taxes aimed at boosting public spending, particularly for the NHS. There is a notable concern among critics that this budget resembles a traditional Labour approach, marked by a large scope of interventionism. The aim is to set the country on a different trajectory, addressing long-term issues, but there are immediate risks tied to bond market reactions, given the increased borrowing. The budget is seen as a gamble; while designed to foster growth through investments, there is skepticism about whether businesses will respond positively, especially in light of the new regulations concerning workers' rights and increased contributions.

Intro

2min

Labour's Crucial Budget: Risks and Rewards

13min

Global Economic Challenges and the Implications of US Elections

2min

Analyzing Labour's Economic Strategy: Frontloading Investment and Future Growth

3min

Government Spending and Economic Challenges

5min

Assessing the Economic Impact of the New Budget

4min

The first Labour budget in 14 years is "refreshing" but risky, say the IFS.

Rachel Reeves has delivered her maiden budget in the House of Commons. As expected, thanks to leaks and pre-briefing over the preceding week or so, the Chancellor is raising employers' National Insurance, changing capital gains and inheritance tax, and increasing stamp duty.

Andrew Marr and George Eaton join Hannah Barnes on the New Statesman podcast to analyse the politics of the Labour budget. They are also joined by Ben Zaranko from the IFS to review the economics.

📚 READ

Labour has laid a trap for the Tories

https://www.newstatesman.com/politics/labour/2024/10/how-labour-aims-to-trap-the-tories

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