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| 1 minute read

HMT - Finance Department or Economics Ministry

Well aware of the issues post-pandemic and the costs of huge public debt, it is timely to consider the role of the Government's Treasury Department, HMT.

The issues of controlling spending and the acknowledgement that spending means taxation in some form or other equals the role of a finance ministry. Policy analysis and impacts on markets as the UK seeks to deliver on national well being in health, social care, education, defense, environment, and jobs suggest an economics ministry.

The current economic crisis in the UK is perhaps unprecedented. There is layer upon layer of shock to the markets and to tax and spend uniformity.  We are not, directly, in a war. But there are direct and indirect costs associated with support for Ukraine way beyond sending aid and military equipment. However, the associated energy price hikes are not entirely down to Russia - they are down to a failure by successive Governments to address energy policy over decades from privatization to the present day. Now layered with net zero - what a price to pay if we can't deliver on that! Brexit's structural adjustments (euphemism) present another layer, and then there's COVID debt, changes in working patterns, rising poverty, and the national accounts laden with debt.

HMT, of which I am a huge admirer, has an enormous role to play in sorting this out. Is it best as HMT, or as one team working on finance and another looking at policy implications (wider economic benefits etc) of the radical actions we need to deliver well-being for all our communities?

Speaking to another senior official, his cheery demeanour disappeared as he reeled off the impossible list of essential things to be funded: “We’ve got a huge health backlog. Getting to net zero isn’t free … levelling up, big investment, depending on what it is, but the deprived communities are not going to think levelling up means anything unless they see some money that they wouldn’t otherwise have seen. And we’ve also got rising debt interest on the bigger stock of debt … and we’ve got an ageing population. So, you can make yourself all quite gloomy on the fiscal outlook.”

Tags

economics, economic development

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