Tomorrow’s budget is a massively political event. Unlike almost all pre-election budgets for a long time there are no freebies to give away: the government's finances are too tight for that. But this does not mean the event lacks interest; far from it \u2014 this only adds to the piquancy.<\/p>\n
So what is needed? Bu heading, I suggest the following.<\/p>\n
The Economy<\/strong><\/p>\n A programme for growth. The Treasury admit that for every \u00a31 billion invested in the economy more than \u00a31 billion is recovered by HM Treasury. So now is the time for significant public spending. This is the moment for the Green New Deal.<\/p>\n Particular needs:<\/p>\n 1) A \u00e2\u20ac\u0161\u00c3\u201e\u00c3\u00b2Green’ investment bank<\/p>\n 2) More lending to small and medium size business<\/p>\n 3) Direct stimulus through short term projects. We still have an enormous back log of small infrastructure projects to do. Now is the time to do them.<\/p>\n The Exchange Rate<\/strong><\/p>\n Don’t do anything to increase the value of the pound \u2014 we have to price ourselves into work.<\/p>\n Cuts<\/strong><\/p>\n We have well over 2 million unemployed. We don’t need cuts until this number is tumbling.<\/p>\n Then we’ll need cuts.<\/p>\n Until then cutting increases government costs and borrowing. And what is the economic logic of paying a teacher to sit at home when they could be teaching?<\/p>\n So, quite simply \u2014 say there are no0ne for now and the budget will be rebalanced by growth \u2014 which will pay for itself, as Keynes not only said, but which history has proved.<\/p>\n Savings<\/strong><\/p>\n Cut Trident.<\/p>\n Cut aircraft carries.<\/p>\n We can’t afford either and don’t need them.<\/p>\n Tax increases<\/strong><\/p>\n We do need them. This is the only acceptable way to re-balance the books right now ad reduce inequality. We need:<\/p>\n 1) 50% tax rate at \u00a3100,000<\/p>\n 2) Maximum of \u00a35,000 of allowances per annum for all earning over \u00a3100,000 to stop avoidance<\/p>\n 3) A General Anti-Avoidance Principle<\/p>\n 4) Abolition of the domicile rule<\/p>\n 5) New rules for tax residency \u2014 I favour a passport based scheme<\/p>\n