The Treasury View
ON 1st October, The Guardian exclusively reported that ministers, at the behest of the Treasury and Rachel Reeves, the chancellor of the exchequer, are being asked to make 10 per cent cuts in their annual capital spending plans in an effort to close the budget deficit. Translated, the Treasury is demanding that the Government hacks 10 pence off every pound of infrastructure spend.
How is it possible that the Treasury, and Reeves, are so mistaken about basic economics that they could enact a policy as objectively wrong as this. Most Bournbrook readers will disagree with the present Government’s views on immigration, LGBTQ+ rights, patriotism, free speech, criminal justice, and many other areas of policy. The Treasury view on infrastructure spending, however, is not a matter of disagreement: it is plain wrong.
To understand why, let’s engage in a little thought experiment. Imagine that your entire wealth consists of a small …
The rest of this article features in our September 2024 print issue, available to subscribers.
