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Labour’s record on the public finances

Labour’s record on the public finances. Robert Chote, Carl Emmerson and Gemma Tetlow Institute for Fiscal Studies. What has Labour done?. What has Labour done?. What has Labour done?. What has Labour done?. How has it been achieved? Revenues. Note: Increase between 1996–97 and 2007–08.

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Labour’s record on the public finances

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  1. Labour’s record on the public finances Robert Chote, Carl Emmerson and Gemma Tetlow Institute for Fiscal Studies

  2. What has Labour done?

  3. What has Labour done?

  4. What has Labour done?

  5. What has Labour done?

  6. How has it been achieved? Revenues Note: Increase between 1996–97 and 2007–08

  7. How has it been achieved? Revenues Note: Increase between 1996–97 and 2007–08

  8. How has it been achieved? Revenues Note: Increase between 1996–97 and 2007–08

  9. How has it been achieved? Revenues Note: Increase between 1996–97 and 2007–08

  10. How has it been achieved? Revenues Note: Increase between 1996–97 and 2007–08

  11. Structural current budget balance: Labour

  12. Structural current budget balance: Labour vs Conservatives

  13. Structural current budget balance: Labour vs Conservatives

  14. Structural current budget balance: Labour vs Conservatives

  15. Structural current budget balance: Labour vs Conservatives

  16. International comparison • Many other countries have strengthened their public finances even more • 19 out of 21 countries reduced borrowing more • 16 out of 21 countries reduced debt by more • UK still has relatively big structural deficit • UK remains ‘mid-table’ when comparing government debt • One-in-three OECD countries now has net assets

  17. The fiscal rules • Golden rule • Sustainable investment rule

  18. The golden rule • Borrow only to invest • Current budget balance or surplus • Judged over the economic cycle

  19. Current budget balance PBR 2007 cycle = +£19bn Financial year Source: HM Treasury

  20. Current budget balance Golden rule met Financial year Source: HM Treasury

  21. An ever-changing cycle? PBR 07: 10-year cycle A B C D E Source: HM Treasury

  22. An ever-changing cycle? PBR 07: 10-year cycle Source: HM Treasury

  23. The sustainable investment rule • Debt at a ‘stable and prudent’ level • Previous cycle: <40% of national income every year • Undefined over new cycle

  24. Has the investment rule been met? Source: HM Treasury; IFS

  25. … and will it continue to be? Source: HM Treasury; IFS

  26. … and will it continue to be? Source: HM Treasury; IFS

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