In a stunning display of fiscal creativity, the Prime Minister has announced a bold new strategy for funding cost-of-living measures: pretending the money exists. A think tank has responded with the kind of shock usually reserved for discovering your coffee machine was actually a toaster all along.
The situation, in plain terms, is this: Burnham wants to help people afford rent and food. Lovely. The problem is that the government’s borrowing room—the amount of money it can responsibly borrow without making the bond markets laugh themselves into bankruptcy—is essentially full. It is the financial equivalent of showing up to a potluck with an empty casserole dish and announcing you will fill it with good intentions.
Think tanks, those institutions that exist primarily to tell politicians what they already know but do not want to hear, have now dutifully pointed out that the Emperor’s wardrobe is, in fact, entirely transparent. The government cannot borrow more without breaching its own fiscal rules. It cannot raise taxes without looking heartless. It cannot cut spending without angering the voters who just elected it. So naturally, the plan appears to involve discovering some previously unknown revenue source—perhaps a buried treasure map in the Treasury basement, or finally collecting on that loan to Luxembourg from 1987.
The real joke is not that this is impossible. It is that everyone involved knows it is impossible, and they are all going to pretend to be shocked when the magic beans fail to germinate.