0:00
If the Chancellor, Rachel Reeves, wants
0:01
to throw the kitchen sink at the fence
0:04
and get up to 3.5% from today, that
0:06
would make for some really unpalatable
0:09
and economic political choices. Around
0:11
40 billion pounds more would be needed
0:13
to get to 3.5% today in today's money.
0:16
That is equivalent to the standard rate
0:18
of VAT going up to around 24%. Income
0:21
taxes across all bands going up by 4p.
0:24
The whole budget for the Ministry of
0:26
Justice and Home Office being cut
0:28
altogether. Or disability payments in
0:30
the last year being slashed altogether.
0:32
Or total benefits for pensioners being
0:35
cut by a third. The total education
0:38
budget being halved. Or spending on
0:40
health, the NHS in particular, being cut
0:42
by a quarter. The other option would be
0:44
to get the government to aim for a cut
0:46
in debt interest payments to lenders in
0:48
bond markets, but that would effectively
0:50
mean the government would need to change
0:52
its whole approach on borrowing,
0:53
spending, and taxes anyway. The likely
0:55
option is obviously a mix of multiple
0:58
options around spending and taxes taking
1:01
place over multiple years. But nine
1:03
years can whiz past, and I think
1:05
politicians and top decision-makers
1:07
doubt that voters would even be able to
1:08
stomach some of these pretty radical
1:11
changes. Perhaps the only way to get
1:12
them onside is to show how far behind
1:14
the UK is to what security officials
1:17
tend to deem to be hostile countries.
