How are you defining neo liberal economics and how do you think it has affected the Treasury?
Energy prices have risen globally for two reasons, supply issues - ie the various wars and the move to Green/Net Zero - this is expensive and is reshaping the grid. These are nothing at all to do with the Treasury - the only bit the Government actually contols is whether to add the costs to general taxation or directly to energy. Our government adds it to the energy prices to attempt to reduce demand, other do not.
Water prices are set by the government, so as far from the free markets as possible. We have massively increased water demand - more people and not built any new reservoirs in 30 years. Now we have to build a lot and fix the rest of the infrastructure all at once.
If the government followed your advice and forgets about trying to balance the books, who is paying back the debt and when? Or we just keep borrowing forever?
Neoliberal Economics/Neoliberalism is basically focused on privatisation, cutting government spending to "balance the books" so austerity and treating the economy like a household budget. Deregulating certain industries (ie banking which led to the financial crash). And a focus on private investment side of the economy while ignoring the consumption side of the economy. There is a bigger definition but practically that is what we see from those economic and political policies/philosophies embeded from the Thatcher and Reagan age.
Sure Energy Prices are due to global prices but also significant extraction of profits from our natural resources. Especially since the regulator pegs our pricing on Gas rather than other sources when calculating the domestic limit and then there is the extortion of small businesses. I didnt reference the gov controlling it via the treasury. I stated BoE makes the situation worse as they try and manage inflation driven by energy with interest rate increases which does nothing to that cause of the inflation but increases costs for people with mortgages etc.
Water yes is set by a regulator but that regulator is toothless look at how much waste is getting pumped into the rivers on a daily basis. The private organisations who own the water companies have invested nothing in the infrastructure and have cut and cut and cut whatever they can while extracting all their dividends and saddling those companies in debt.
Both of those public goods should really be centred around powering and supplying the country rather than the extraction of profits to megacorps. But both of those examples are great examples of neoliberal economics of passing our natural resources to private entities to profit off of while they continue to increase the cost of these necessary goods for us. And they pass on those green changes to consumers rather than investing in the infrastructure to ensure loss of energy is changed and that they can meet the actual demand. That i put at the foot of those private businesses.
Again balancing of the books is not a principle for an economy it is a facet of Neoliberal Economics. Government spending actively engages the economy and can increase the amount it takes in via spending in the right places. Increase the amount of consumption in the market from regular people will result in a greater take of government taxation through multiple linked routes.
Everything about the balancing of the books since the financial crash has resulted in huge Austerity measures implemented cutting vast swathes of services that reduced crime, helped social mobility and ensured activity in the economy etc. However borrowing has continued to grow. Why? Because those cuts resulted in a huge cut to spending power and consumption in the market. Add on the impact of energy costs skyrocketing meaning even less power to spend in the local economy resulting in less and less small businesses, high street shops and dying town centres. Resulting in less jobs etc.
All of these neoliberal economic policies have had a knock on effect of making us far poorer and shrunk the disposable income of everyday people and making the money in their pocket stretch no where near where it used to.
My statements on Keynesian economics being the answer are not just about spending for spendings sake. Its to focus spending where it will make and impact. Address the fundamental issues we face. Like firstly the fact our natural resources should be in the hands of the people and not private organisations that extract from everyday people for more and more extortionate profits just because everyone needs it. That means the government spending on infrastructure for these stays within that organisation there is no need for profits but focus on optimisation to make things more efficient and achieve its goals for the whole country. All of those would generate additional taxation and job creation ensuring its able to sustain itself.
And then other government spending to 1 help the workforce to be far more healthy and working at their optimal rate which we have seen has been on a down turn especially with access to medical needs and removing the need for supplementing with expensive private hospitals.
But then also ensuring we have a healthy consumption side of the economy as that in turn creates investment due to there being far more opportunities to sell within various different markets and so in turn creates more jobs and more taxation from regular routes. No need to mess with the tax system or income tax but create a system that feeds itself rather than rely on private investment for the economic growth and status
