00:00It's really hard to boost headroom because you mentioned that the assumptions have gone against them on productivity growth.
00:08There's things that they've walked back on the policy front. So the fiscal hole is pretty big.
00:13You know, it's certainly 20 billion, quite possibly, you know, edging on 30.
00:17So, you know, you start ruling out your big tax raising levers, as it appears has been done, income tax, VAT.
00:23It's very hard. And I've had, you know, every spreadsheet under the sun going, trying to work out different permutations of this.
00:30And it's actually very difficult even to get your headroom to 20 billion, as we've seen with market moves with, you know, a little bit of policy challenge.
00:38You can lose 5 billion in a moment's notice. So I think, you know, getting to 15 to 20, it's progress.
00:45But it's certainly not a big buffer if you're trying to use that as an opportunity to say, look, let's just have one fiscal event a year.
00:52And that won't necessarily get the debt markets off her back. What about fiscal drag? Is that where the story is going to be?
00:58It's quite dull. Nobody wants to write stories about fiscal drag. It's boring.
01:02Talking about brackets widening. And maybe it gets the party the ability to say, look, we didn't put up taxes, even though more people will pay taxes.
01:09Is that where she's going to lean on?
01:11I think for me, yes, those are the two big things in making up the numbers are the freeze on thresholds in that very final year.
01:20And that's the thing that the opposition will will kind of catch on and try and push on manifesto pledges.
01:25So it's not without risk, but I think it is relative low hanging fruit.
01:29And the other thing is in the final year of the forecast at the moment, they have spending rising in one percent, one percent in real terms.
01:36So I think they can bring that down. Both of those are things that happened in the last year, things that people may say, will they really happen?
01:45Do they look fiscally credible? And these are all questions that are being asked, having had that walk back on the use of the main income tax rates,
01:52because it is a much more backloaded, somewhat less convincing fiscal strategy.
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