The government has its budget priorities wrong, public services suffer as they prioritise tax cuts over vital investment

6 March 2024, 14:14 | Updated: 6 March 2024, 14:20

• Pranesh is a research fellow within IPPR’s Centre for Economic Justice, focusing on the intersection between environmental and economic justice.

By Pranesh Narayanan

@Narayanator

Today’s budget proves that the government has its priorities all wrong.

Offering cuts to taxes while slashing funding to public services is not fiscally responsible, it's not in the best interest of the economy and it's not what the public wants.

The NHS is still reeling from having to deal with the pandemic after a decade of austerity. Schools are literally crumbling. Dozens of local authorities are facing financial meltdown.

This isn’t just something that’s happening in the abstract, it’s something people across the country feel deeply. Public services are struggling and need investment, not further cuts.

Despite over half of the country wanting to see funding for public services prioritised over tax cuts, the budget does not reflect this – the small amounts of additional investments announced today are nowhere near enough.

The government is right to think about growth and improving the economy, but Britain’s biggest economic problems are not our levels of taxation, which are not all that remarkable compared to other countries.

We’ve had lower levels of tax than other countries for decades, but this hasn’t stopped stagnation in the UK.

After accounting for inflation, wages have grown much more slowly in the UK than in countries like France and Germany that have much higher overall levels of tax. Households in these countries also have higher disposable incomes than the UK.

The thing that would really shift the dial, that would really drive meaningful growth, is more investment in health services, infrastructure, education and clean energy.

This investment will give the British people the tools they need to thrive and stop the decline of services that everyone relies on.

This means putting longer-term interests at the heart of policymaking, rather than short-term, attention-grabbing fiscal events that are more focused on political games.

An alternative is possible. The government can raise money for public services by making things fairer. Abolishing the non-dom tax status is one way the government has proven they can do this.

The next budget should find new and creative ways to ensure that these cuts are reversed and long-term plans are in place for more investment in the things we need.

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