Rachel Reeves is planning plenty of tax rises. It’s not because the economy was weak when she took over.
Growth in the first half of this year was the fastest in the G7 after the poor Covid years. Inflation was back down to 2%. It is not because the Conservatives were planning to spend a lot more after the election. It is because she wants to spend a lot more which she did not tell us about before the vote.
Her own assessment of £22billion of extra spending “inherited” from the outgoing government was dominated by £11billion for bigger wage awards and £6.4billion for more migrants.
The big inflation busting pay rises for the public sector were her choice. But the extra money for migrants reflects the new government’s policy and highlights how expensive large scale migration of people on low and no income proves to be.
The new government has increased the numbers coming illegally by small boats through cancelling the Rwanda deterrent and speeding up the process of granting illegal arrivals the right to stay. This acts as a draw for others to come as they can see there is a great payoff, one worth risking a dangerous boat journey from criminal gangs.
So far Ministers are keeping the necessary changes the previous government made belatedly this January to cut legal migrants coming to low pay or no pay settlement here. This will reduce flows by a bit but still leaves total migration of people needing substantial taxpayer funded help.
If we continue to accept 500,000 additional people every year into our country we need to build two cities the size of Southampton every year. They need hundreds of thousands of council flats or Housing Association homes financed by the state.
They need surgeries and hospitals, school places, subsidised trains and buses, roads, sewers, water pipes, broadband, shops and the rest.
When the EU looked at the costs of new migrants in 2016 they thought the state would need to find 250,000 Euros for each new arrival to provide a home and extra facilities and to cover early year costs.
That is the capital cost of building new homes and facilities as well running costs. There has been considerable inflation since then.
If we take £250,000 as a rough estimate, an extra 500,000 low and no income annual arrivals will cost £125billion in the early years. New flats cost well into six figures and much more in London where many migrants wish to live.
The government is rightly worried by long health waiting lists. Adding another half million people a year to our society means many more in the queue.
They want to cut traffic on our roads, but more people cause more jams as they need cars and vans. They want to cut U.K. CO2 faster, but every extra person adds to our carbon output.
LATEST OPINION FROM MEMBERSHIP:
Rachel Reeves is right to highlight the extra costs from more migrants she expects this year. She needs to understand this budget pressure she has identified is just one of the consequences of more people.
Spending pressures to build thousands of more homes, to provide more NHS capacity and to spend more on welfare and low income benefit top ups are all intensified by failing to reduce inward migration.
Much of this cost is entirely under government control. Most migrants arrive legally. Many can stay because our rules are permissive.
Government could change the rules tomorrow to lower legal migration numbers. The number of illegal arrivals needs to be lowered. It is difficult to do that if getting rid of the backlog means letting most illegals stay.
The government is making life too easy for the profiteering small boat gangs as the gang leaders can now say the waiting time to be free in Britain, to do a job and get a home, has just been reduced by the new government.
Meanwhile as Keith Bays at GB News has pointed out, Labour’s energy policy also needs big state expenditure. No wonder Rachel Reeves is looking for ways to tax anyone who dares to save, invest, run a business or drive a car.
She and the government have expensive habits and they intend to make us pay for.