UK – 2024 General Elections : Labour hovering between ambitions and reality
- 10.06.2024
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- First Labour administration since 2010 on the horizon
- Labour s economic platform: securonomics
- Brexit: closer ties and pragmatism in relations with the EU
- Fiscal constraints
- Labour will inherit a complicated economic and fiscal situation
- Fiscal rules: freeing up investment while stabilising the debt ratio
- What tax increases might be in the cards?
- Conclusion
In summary
The British will be heading out on 4 July to vote in early general elections. Polls predict a victor for Labour that could see the party take a large majority in the House of Commons. Labour has adopted a new philosophy centred on security (aka "securenomics"). On the domestic front, it is planning far-reaching supply-side reforms with a particular focus on private investment.
The next government will have to put the country back on the growth track after a long period of stagnation in economic activity and loss of living standards. In an ageing economy subject to trade constraints with post-Brexit EU, the Labour Party is making potential growth and productivity its priority. It wants to increase investments. The fiscal situation is complicated, however: public deficit and debt are already very high (at 5.9% and 101.3% respectively in 2023, according to Maastricht Treaty measures, used to draw comparisons with EU countries) and leeway in relation to fiscal rules is very limited. Any additional spending will have to be financed, but there is strong resistance to higher taxes and duties given the substantial need for improved public services.
Slavena NAZAROVA, Economiste - Royaume-Uni, Pays scandinaves et Irlande