The dangerous fiction of the “fiscal black hole”
JVL Introduction
The BBC reported that Labour leader Sir Keir Starmer has said he accepts that there is a £55bn gap in the public finances, a figure provided by the Office for Budget Responsibility (OBR).
This figure is absolute nonsense, as James Meadway of the Progressive Economy Forum (PEF) made clear in this article published the week before the budget.
In it he draws on recent PEF research, published under the overall title used above, viz. “The dangerous fiction of the “fiscal black hole”.
Yet Labour seems determined to sign up in advance to gut the possibility of any future even half-radical programme, including its £28b a year commitment for its green plan.
It is a dangerous capitulation to the austerity agenda.
This article was originally published by Labour List on Fri 11 Nov 2022. Read the original here.
Labour must reject the narrative of a so-called “black hole” in the public finances
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What is definitely not “fakery” is the high rates of inflation and the lowering of the value of the pound against other currencies which effect everyone in society. The article says nothing that addresses this issue of central and very legitimate concern. I find the analysis offered incomplete and hence unconvincing.
Even if there was a black hole Dido’s 37 very big ones for good as useless test and trace could have filled most of it. But let’s not talk about that. Money well spent ( based on who got it of course). Let’s face it, they don’t really have anything against public spending. Not really. Couldn’t possibly accuse them of that. It’s all about who gets it.
Adam. For the source of current inflation you need look no further than Ukraine and western governments’ desire to prolong the war in order to humiliate Russia. They are more interested in this than the wellbeing of their own citizens. Then there’s the damage to World harvests as a result of climate change. Add to this the complete mishandling of the Covid epidemic by the Johnson government, when the obscenely rich grew even richer at the expense of the rest of us, and the brief but disastrous period of Truss / Kwarteng economic management, and it’s hardly surprising we have high inflation and the pound has been devalued. I don’t think what James Meadway has written needs to account for these factors.