A personal view…

Labour cabinet ministers, let alone ordinary Labour MPs, complain that they can’t get to talk with Rachel Reeves about the 30 October Budget.

There are plenty of probably-calculated leaks from the Treasury, and probably-inspired comments from think tanks and mainstream economists.

Reeves, so the leaks say, is looking for £40bn in tax rises… and spending cuts.

Labour ministers are reported as lobbying Chancellor Rachel Reeves against cuts in their areas, which may come as continuations of already-set Tory plans or in the guise of “efficiencies”.

Tory tightening of the Work Capability Assessment (WCA) for claimants with long-term health difficulties scheduled for 2025 is likely to go ahead, although the Office for Budget Responsibility estimates this “would mean that by 2028-29, 424,000 people with serious mobility or mental health problems would be denied… Universal Credit worth over £400 a month and protection from sanctions.. Just 3% of these people would be expected to move into work in the subsequent four years”.

Starmer and Reeves seem intent on keeping the two-child cap and the overall cap on benefits, demanding a 2% in civil service running costs, pushing more and more councils into special measures, and telling universities to cut costs or go bust.

Probably the Budget will allocate a bit more money to the NHS, and almost certainly it will raise some taxes – capital gains tax, employers’ National Insurance contributions, and such.

Despite Reeves’s pledges before the election not to raise income tax or VAT, income tax will de facto be increased by freezing thresholds. She’ll keep her promise not raise corporation tax, though.

The IPPR, the Tony Blair Institute, and many others have been mobilised to call for an easing of the fiscal rules Reeves so nervously pledged herself to before the election.

Probably they hope that so much “mainstream” support for easing of Tory fiscal rules will stop financiers responding by a “run on the pound”. We don’t know, but they may be right: hardly anyone thought the Tory rules were other than nonsense.

They will be right to ease the rules. (One easing is to disregard all or some of the Government’s spending on making good Bank of England losses, on the model of what the USA does with Federal Reserve losses. Another is to count public assets as well as public debt).

Debt burdens are of consequence – central government paid out £115.5 billion in debt interest in 2022-3, and the payout remains high – but the Cameron-Osborne regime in 2010-15 proved that public spending cuts do badly in reducing debt burdens.

Substantial public investment, and current public spending too, does better, by increasing the incomes from which tax can be drawn to match spending.

In any case, for environmental and human reasons, we need more public investment in hospitals, renewables and nuclear, the power grid, housing, and rail. Such gambits as freeports and the International Investment Summit on 14 October, trying to entice global capitalists with bespoke subsidies, tax breaks, etc., are no substitute.

While the Budget will probably continue Tory cuts in many areas, and ease them only slightly in others, it looks very unlikely that it will commit to more than token increases in public investment.

Tax Justice UK calculates https://taxjustice.uk/blog/six-wealth-tax-policies-that-could-raise-50-billion/ that a wealth tax, increased capital gains tax, and a few other items could raise £50 billion a year, enough to meet the urgent demands for rebuilding public services.

So we say:

• Tax the millionaires

• Rebuild public services, including social care

• Rapid investment for green conversion and for housing.