Wednesday, 30 October 2024
As Chancellor Rachel Reeves announces Labour's first budget for 14 years, experts from the University of Nottingham have reacted to the announcement.
Dr Christopher Pich, Associate Professor in Marketing
on the public mood towards the budget
He said: "The budget seems to be more focused on ‘tricks’ than ‘treats’. Voters and commentators do not expect there to be any giveaways or positive surprises.
"In fact, the Prime Minister and Government have been preparing the Nation for budget cuts, and spending squeezes since July’s election victory. Many have started to question the perceived trickery of Labour’s winning election manifesto including how the Government defines ‘working people’.
"Therefore, the mood across the nation ahead of the budget is one of pessimism, anger, and fear."
Dr Christopher Byrne, Assistant Professor in Politics
on the politics of the budget
He explained: "Chancellor Rachel Reeves has just announced the new Labour government’s first budget, its first major ‘fiscal event’ and our best indication yet of what its priorities and political strategy will be going forward.
"There are wins in this budget for people on the national living wage (which is going up) and young workers in particular (there is going to be a single ‘adult’ living wage in future), and more money for defence. Motorists have been protected with a freeze in fuel duty, and the ’triple lock’ on pensions is still intact. However, there are some losers. In fact, this is the biggest tax-raising budget in recent years, amounting to some £40bn of net increases.
"The single biggest measure is the increase in employer National Insurance Contributions, accounting for £25bn. Prior to the general election Labour promised not to raise taxes for “working people”. This probably allows the government to credibly claim to have kept their promise, but it is politically risky. It is all but inevitable that it will depress wage growth, exacerbating the UK’s long-standing post-financial crisis problem of stagnant pay and living standards.
"There were also significant but less politically tricky increases to Capital Gains Tax and inheritance tax (which will now apply to pensions). The political calculus here is that these rises have protected the most sizeable electoral constituencies and, come the next general election, the public will have mostly forgotten or, alternatively, won’t care if public services have improved, especially the NHS and schools, the two main beneficiaries of the budget.
"Nevertheless, the government has expended significant political capital with this budget. The Chancellor’s claims to have discovered a “£20bn black hole” in the public finances, necessitating these tax rises, were reminiscent of the strategy David Cameron and George Osborne used to justify their austerity policies after 2010. However, it’s not clear that it will be as politically effective this time given that the Cameron-Osborne government had the benefit of a generally supportive media and a coalition partner’s in the form of the Lib Dems to reinforce their narrative."
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More information is available from Faith Pring in the Press Office on faith.pring@nottingham.ac.uk
Faith Pring - Media Relations Manager
Email: faith.pring@nottingham.ac.uk
Phone: 0115 748 4411
Location: University of Nottingham, University Park
Notes to editors:
About the University of Nottingham
Ranked 32 in Europe and 16th in the UK by the QS World University Rankings: Europe 2024, the University of Nottingham is a founding member of the Russell Group of research-intensive universities. Studying at the University of Nottingham is a life-changing experience, and we pride ourselves on unlocking the potential of our students. We have a pioneering spirit, expressed in the vision of our founder Sir Jesse Boot, which has seen us lead the way in establishing campuses in China and Malaysia - part of a globally connected network of education, research and industrial engagement.
Nottingham was crowned Sports University of the Year by The Times and Sunday Times Good University Guide 2024 – the third time it has been given the honour since 2018 – and by the Daily Mail University Guide 2024.
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