Most Labour MPs voice their disapproval of Reeves' fiscal guidelines.
Let's dive into the drama unfolding in Westminster
It seems like a third of Labour MPs ain't feeling Rachel Reeves' fiscal rules, with about 20% of 'em preferring tax hikes over spending cuts. This is according to a poll by Survation, shared with The Times.
These MPs believe Reeves' rules areholding 'em back from achieving their goals, like improving public services, combating climate change, and raising living standards. Apparent reports suggest that Reeves has been asking unprotected government departments to prepare for some serious budget cuts in the upcoming spending review.
The government's financial straits haven't been very well-received by department heads, with whispers that ministers are demanding direct chats with Reeves to work through the fear of reduced funding in the coming years.
Labour's deputy PM, Angela Rayner, has caused a stir with the party by publicly backing a memo calling for a slew of fresh tax hikes.
As for what the public thinks, YouGov found that around 6 out of 10 Labour voters from the 2024 general election would rather go for tax increases or borrowing over cuts.
However, boosting the borrowing wouldwipe out the small headroom set aside by the Treasury—just £9.9bn.
Where's the loot gonna go?
On the 11th of June, following the spending review announcement, Reeves plans to reveal major adjustments to the government's investment rules. The Times reports that more spending on capital projects across different English regions is likely to be the main attraction.
Red Wall Labour MPs are sweating over Reeves' fiscal rules, as Nigel Farage's Reform eyes their seats.
Labour MP Josh Simons stated that infrastructure projects working on fixing and building roads in his Makerfield constituency are essential for preserving Labour support in the North. Otherwise, he warns a wave of "rage" and "anger" could follow.
Regarding building a road to Wigan to ease traffic congestion, Simons said: "when you look at the history why it wasn't delivered, and decisions were made not to deliver it, mostly made down in Whitehall, mostly based on land values that always punish Northern towns."
A Bit of Background
The public seems to have a poor grasp of Reeves' rules, with only 4% displaying confidence in their understanding. Their credibility is questioned as they are labeled as "ironclad" but routinely adjusted in response to forecast fluctuations.
There's concern about the narrow fiscal headroom, which makes it tricky for the government to maneuver fiscal policy without resorting to further tax increases or spending cuts. The uncertainty is also affecting business confidence, as companies hesitate to commit to investment decisions due to potential future tax hikes or adjustments to spending.
It's unclear how these fiscal rules will play out in the upcoming spending review, but one thing's for sure—it's gonna be a, erm, lively discussion.
- The ongoing disagreement within Labour MPs over fiscal rules, particularly regarding taxes and spending, has caught the attention of political news outlets such as The Times.
- The debate surrounding the fiscal rules, which are aimed at improving public services and addressing issues like climate change, has extended to policy-and-legislation discussions related to environmental science.
- As the government grapples with financial constraints, discussions about taxes, the economy, and the role of politics in shaping the future are prevalent in general news and economic journals.
- The upcoming spending review, slated for the 11th of June, is expected to bring significant changes to the government's investment rules, with a focus on capital projects in various English regions, and could profoundly impact the environment and the climate-change discourse.
