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In the News

UK Economy - The Borrowing for Investment Debate

Graham Watson

9th January 2024

Carsten Jung writes here in the Guardian about the need for increased investment in the UK, not least public sector investment, and suggests that the Labour Party's commitment to a £28bn a year on green projects by the second half of the next parliament might actually not be ambitious enough.

Clearly, investment has a multiplier effect, although many wonder about the size of the fiscal multiplier for government spending, but if you factor in the positive externalities associated with such schemes surely there's more of a case for them than perhaps there was previously.

Richard Partington summarises here the fiscal debate, arguing that, for all the smoke-and-mirrors, it's Conservative policy that requires the greatest scrutiny because of its lack of plausibility, rather than any incoming Labour government.

He argues that if you look at existing Conservative commitments to defence and overseas development assistance, for example, then any promise to cut taxes simply isn't feasible, and has been recognised as such by the Institute for Fiscal Studies.

However, flinging mud is easy. the reality is that growth, whatever it's form is going to require higher levels of investment and at the moment only one party seems to have any sort of plan for that.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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