"People often talk about what chancellors do in their budget, but sometimes what's more important are the things you don't do. One of the things I didn't do was cut the investment that I put into capital spending, new schools and hospitals, new energy infrastructure, rail infrastructure. It would have been the easiest thing to do to say the OBR's done this downgrade, you need to cut our cloth accordingly."
"Britain's wealthy must shoulder the burden of paying to rebuild the country's creaky public services, Rachel Reeves has said, as she warned Labour MPs that leadership speculation was bad for the country. The chancellor said she had opted to increase taxes by 26bn in this week's budget to improve schools, hospitals and infrastructure, rejecting calls to cut our cloth accordingly after a downgrade in productivity forecasts."
The chancellor increased taxes by £26bn to fund schools, hospitals and infrastructure while refusing to cut public services despite downgraded productivity forecasts. The Office for Budget Responsibility questioned claims that plans to raise income tax were abandoned because of more optimistic forecasts and noted the chancellor knew of the forecasts earlier. Capital investment in new schools, hospitals, energy and rail infrastructure was protected to boost productivity and address creaky public infrastructure. The decision prioritised investment over immediate spending cuts on the argument that sustained capital spending is necessary to improve long-term growth. Leadership speculation among Labour MPs was described as damaging.
Read at www.theguardian.com
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