A BUDGET WINDFALL?
The Somerset Guardian, 23rd October 2018
A forecast for 2018-19 made by the Office for Budget Responsibility (OBR) indicates that the Chancellor has underestimated tax receipts by around £13 billion for income tax, National Insurance and alcohol duties. This means it is likely that the Treasury could experience a Budget 'windfall'.
Whilst the Chancellor claims that the report’s findings are speculative this announcement implies that the previous proposal to raise taxes to supplement a spending increase for the NHS can now be reviewed. This follows on from the Government’s promise to raise an additional £20 billion a year for the NHS in England by 2023.
The announcement will be undoubtedly welcomed by the taxpayer. Budget deficits often fall faster than people expect and this adjustment, one of the largest since the data were first supplied, has placed the Chancellor in a fortunate position ahead of the Autumn Budget. Not only will the NHS be bolstered from this cash injection but austerity could also be eased.
If an economy is managed sensibly there ought to be no reason to raise taxes and in turn, there should be no reason why the NHS cannot be fully funded. Increasing taxes is something that is unpopular with most of the electorate as well as being economically damaging. Ultimately, individuals spend money better than bureaucrats.
The policies that have been followed by the Conservative Government since 2010 have succeeded. The OBR has a record of overstating the deficit so these new figures may still be too pessimistic but if they are correct it means that the Treasury will have achieved one of the most desirable objectives for any government: the ability to cut taxes and increase public spending.