Independent Thinking Britain's budget – a recipe for growth or decline?
Nov 28, 2025
This discussion features Olivia O'Sullivan, a director and policy expert on UK politics, James Kynge, a senior researcher on China and Asia-Pacific economic strategies, and Sébastien Maillard, an associate fellow on European politics and economics. They dive into the implications of the UK's latest budget amid political leaks and constrained choices due to Labour's manifesto. Comparisons are drawn between UK and Asian growth strategies, highlighting the challenges of a slow EU reset and the urgent need for reform to boost productivity in Europe.
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Tax Promise Creates Fiscal Straitjacket
- Labour's manifesto promise not to raise income tax, national insurance or VAT has boxed the government into niche taxes.
- That constraint forces a patchwork of sector-specific levies that may anger targeted groups more deeply.
Debt, Low Growth Raise Credibility Stakes
- High public debt plus low growth makes the UK's fiscal position harder to manage and demands credibility with markets.
- The government must show falling debt-to-GDP and cover day-to-day spending by decade-end under its fiscal rules.
Ageing Costs Crowd Out New Priorities
- Structural drivers like ageing and costly healthcare make public spending inflexible and crowd out new priorities.
- These long-term pressures make it hard for governments to reallocate funds toward productivity-boosting areas quickly.