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Why Britain’s Conservative government is shifting leftward – The Economist

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DENIS HEALEY, the Labour chancellor of the exchequer in 1974-79, supposedly said that he wanted to squeeze the rich until the pips squeak. Thanks to New Labour’s conversion to the gospel of wealth, and the party’s dismal electoral record since in the post-Blair era, it is a long time since the nation echoed to the sound of squeaking. But the new Conservative government may be about to change that.

The government is said to be contemplating two radical moves in the budget due on March 11th—imposing a “mansion tax” on owners of expensive homes and cutting pension tax relief for higher earners. The mansion tax may take the form of an annual levy on expensive homes or a higher council tax band. The pension reform may mean cutting tax relief on people who earn more than £50,000 a year from 40% to 20% to raise an extra £10bn a year. Other raids on capital gains, inherited money and profits are reportedly being considered.

These particular speculations may be hot air, but there are other straws in the wind. Boris Johnson has publicly aired his ambivalence to business, and his manifesto commitment to revitalise competition policy—never a friend of capitalists—is already bearing fruit (see article).

In the longer term, two ineluctable forces will force him to raise taxes on the rich. The first is fiscal: the government needs to raise money to finance ambitious infrastructure projects such as the HS2 rail link to the north. The second is political: the government needs to revise its tax-and-spend policies to reflect the fact that the Tories are now the party of ex-mining towns such as Blyth as well as well-heeled shires such as Buckingham. To hold onto those northern gains, Johnsonian Conservatism will need to be more open-handed than the Cameroonian variety.

This points to one of the oddities at the heart of British politics: that even as the Tory party consolidates its grip on the country—it has been in power either as part of a coalition or in its own right since 2010 and is likely to remain so until 2025—politics is moving to the left, at least on economics. In 2015 the Tories mocked “Red Ed” Miliband for proposing crazy socialist measures such as nationalising railways and imposing a mansion tax. Now the government has nationalised Northern Rail, may do the same to other rail companies and is expected to bring the whole network under tighter state control.

The government’s embrace of Milibandism is causing alarm among Tory MPs (particularly in the more affluent parts of the country) and Tory activists (particularly on the Thatcherite right). The Bruges Group tweeted that “had we wanted Labour we’d have voted for Corybn”. The head of the Taxpayers’ Alliance has warned the government that voters want lower taxes and smaller government. The Daily Telegraph has run a series of splenetic articles and editorials, including one warning that the mansion tax might have a devastating impact on the owners of country estates, illustrated with a picture of a 40-bedroom Elizabethan country house and its unhappy-looking owner. There is more fury to come, as the party discovers that fulfilling Disraeli’s dream of One Nation Conservatism comes with a heavy price tag.

This article appeared in the Britain section of the print edition under the headline “Why Britain’s Conservative government is shifting leftward”

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Budget hawks frustrated by 2020 politics in entitlement reform fight | TheHill – The Hill

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Budget watchers are growing increasingly frustrated about the politicization of tackling cost-saving measures in entitlement programs, particularly Medicare.

The growing divide between Democrats and Republicans was on full display this past week, when President TrumpDonald John TrumpRussian sanctions will boomerang States, cities rethink tax incentives after Amazon HQ2 backlash A Presidents Day perspective on the nature of a free press MORE’s budget proposal for fiscal 2021 called for roughly $2 trillion in cuts to entitlement programs. Anti-poverty advocates said many of those provisions would hurt the poor and deny people health coverage.

Democrats seized on the proposal, characterizing it as Trump slashing Medicare benefits, even though the president largely hewed to his State of the Union promise to leave Medicare untouched. He instead proposed some $500 billion worth of measures that would reduce costs to providers without eating into benefits.

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Speaker Nancy PelosiNancy PelosiMalaysia says it will choose 5G partners based on own standards, not US recommendations Pelosi warns allies against using Huawei Budget hawks frustrated by 2020 politics in entitlement reform fight MORE (D-Calif.) called the White House spending request a “heartless budget.”

“If you’re sitting at home at your kitchen table and you’re a senior or there is a senior in your family on Medicare, you’re getting cut,” she said.

But experts say the Medicare proposals should be relatively uncontroversial, leaving budget watchers wondering if reforms to any of the nation’s largest deficit drivers is politically possible, or if the issue has simply become a non-starter in Washington.

“There is literally nothing that would cut benefits from Medicare recipients,” said Marc Goldwein, the head of policy for the Committee for a Responsible Federal Budget, a fiscal watchdog group. “The policies would actually help them because they’d reduce the amount they’d pay in premiums and out-of-pocket costs.”

Some of the major Medicare proposals, he noted, have a history of bipartisan support and were even included in former President Obama’s budget requests. Democratic presidential candidate Pete ButtigiegPeter (Pete) Paul ButtigiegJoe Biden lost his fastball — can he get it back before South Carolina? Where the 2020 Democrats stand on taxes Bloomberg hits Sanders supporters in new ad MORE includes three of the policies in his health care proposal, and Sen. Elizabeth WarrenElizabeth Ann WarrenJoe Biden lost his fastball — can he get it back before South Carolina? Where the 2020 Democrats stand on taxes Budget hawks frustrated by 2020 politics in entitlement reform fight MORE (D-Mass.), who is also running for president, includes two of them in hers.

Among them is a proposal requiring that the site of a procedure — a doctor’s office or a hospital — doesn’t affect the cost.

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Another would affect the level of payments Medicare pays to providers for what’s called post-acute care, such as physical therapy or rehab.

Both aim to reduce payments to the providers but don’t directly scale back benefits or cut off access for recipients.

But it is possible for such cost-cutting measures to ultimately affect benefits, according to Juliette Cubanski, an associate director of the Kaiser Family Foundation’s Medicare Program.

“When it comes to Medicare, I don’t think it makes sense to hold up this budget as something that Medicare beneficiaries need to lose any sleep over,” she said. “But if you cut provider payments and they scale back on benefits, there could be a spillover effect there, or a connection between the two.”

House Budget Committee Chairman John YarmuthJohn Allen YarmuthBudget hawks frustrated by 2020 politics in entitlement reform fight On The Money: Deficit spikes 25 percent through January | Mnuchin declines to say why Trump pulled Treasury nominee who oversaw Roger Stone case | Lawmakers trade insults over Trump budget cuts Lawmakers trade insults over Trump budget cuts MORE (D-Ky.) argued that absent any broader reforms, such changes could have repercussions for rural hospitals.

But the exact implications aren’t clear, says Goldwein, who said studies of similar cost-cutting measures in the past have found minor changes in benefits.

Those policies are in contrast to the various restrictions Trump proposed for Medicaid, food stamps, welfare and housing assistance, which would deny some beneficiaries access and in some cases scale back the level of benefits.

For those concerned about reducing the deficit, conflating cost-saving measures with cutting benefits muddies the waters, analysts say.

“I think it’s very frustrating to lump them together, because people have a point on Medicaid. But when it comes to Social Security and Medicare, they’re Obama-era policies to increase program integrity and reduce costs,” Goldwein said.

Since Trump took office, the deficit has increased by roughly two-thirds and is expected to reach $1 trillion. Democrats blame the $1.9 trillion GOP tax law from 2017 and a Republican effort to boost defense spending. Republicans, meanwhile, point to the higher domestic spending favored by Democrats.

But analysts argue that an aging population is stretching spending from mandatory programs such as Social Security and Medicare, which are major drivers of the debt.

Russ Vought, acting director of the White House Office of Management and Budget, said the problem stemmed from politicians using a program’s cost as shorthand for its value.

“Washington, D.C., far too often wants to just say what’s the dollar amount and makes that the sacrosanct value for how you’re doing with regard to your commitment,” he said at a House Budget Committee hearing this past week. He also insisted that the Trump budget would leave programs such as Medicaid untouched.

Democrats, for their part, said they welcomed reforms but needed proof that they worked before slashing budgets.

“I have to be a little bit miffed, I guess is the best word, because you talk about savings and waste and fraud, and that you’re going to be doing different types of approaches, but has the administration offered any legislation in any of these areas?” Yarmuth asked Vought at the hearing. “The administration has not offered legislation to deal with health care.”

Indeed, Goldwein noted, some $750 billion of savings in the president’s budget would come from an unspecified health plan that has yet to be unveiled.

Election year politics is in many ways playing a role in the debate, with experts noting that it’s easier to tout more benefits and lower taxes than the alternative.

“It’s very difficult to talk about cutting Social Security or Medicare benefits. At the same time, there aren’t a lot of people who want to say we need to increase taxes or revenues to pay for these programs,” Cubanski said. “We’re not having a conversation about, ‘How much are we willing to pay for these programs?’ and ‘How much should we pay moving forward?’”

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Women in Politics: Theresa May Recounts 'Sticky Tape' Moment – The New York Times

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DUBAI, United Arab Emirates — Former British Prime Minister Theresa May said Monday that early on in her political career, she vowed never to think that being a woman held her back.

“Don’t think that you don’t get something because you’re a woman,” she told an audience of mostly women at the Global Women’s Forum Dubai.

Still, there were times when being a woman head of state was — well, sticky.

May recounted one such moment. She was on a British Air Force flight, heading to a dinner and having to change into evening attire. There were no changing facilities on board but the staff told her not to worry.

“They took up me into the cockpit, there with two pilots, and I’m thinking ‘really?’,” she said.

“A chap comes along with sticky tape and a sheet, and he stuck it up behind the pilots and says: ‘There you go, you can change behind that’,” she said, to laughter and applause from the audience.

May, who became the second female British prime minister in 2016, after Margaret Thatcher, was speaking on stage with the United Arab Emirates’ ambassador to the United Nations, Lana Nusseibeh.

Nusseibeh shared her own “embarrassing” anecdote, saying that once while trying to keep up with the UAE’s foreign minister on the streets of New York, she got her heel stuck in a gutter and it broke off. She did her best to keep up.

“Men, frankly, don’t run in heels,” Nusseibeh said.

May also spoke about a type of boys-club culture that existed when she first entered the House of Commons as a member of parliament in the late 1990s, with “a huge emphasis on the men sort-of drinking together and getting together into groups.”

“Some of the women felt they had to join that, and I didn’t,” May said. “I wanted to do it the way I wanted to do it. So, I did it my way. I was myself and, hey, I was prime minister.”

May stepped down as Conservative leader last year, leaving behind a legacy as a prime minister who for three years faced the difficult process of trying to get Britain out of the European Union with stubborn determination.

She told the audience that she hopes to be looked upon by young girls as an inspirational leader committed to public service. She also urged women in leadership positions to actively support other women and encourage them to share their experiences.

“The men network. They network a lot. They will use contacts in order to help them through in their careers, and we don’t do enough of that and we should be doing that as women,” May said.

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Women in politics: Theresa May recounts 'sticky tape' moment – CityNews Vancouver

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DUBAI, United Arab Emirates — Former British Prime Minister Theresa May said Monday that early on in her political career, she vowed never to think that being a woman held her back.

“Don’t think that you don’t get something because you’re a woman,” she told an audience of mostly women at the Global Women’s Forum Dubai.

Still, there were times when being a woman head of state was — well, sticky.

May recounted one such moment. She was on a British Air Force flight, heading to a dinner and having to change into evening attire. There were no changing facilities on board but the staff told her not to worry.

“They took up me into the cockpit, there with two pilots, and I’m thinking ‘really?’,” she said.

“A chap comes along with sticky tape and a sheet, and he stuck it up behind the pilots and says: ‘There you go, you can change behind that’,” she said, to laughter and applause from the audience.

May, who became the second female British prime minister in 2016, after Margaret Thatcher, was speaking on stage with the United Arab Emirates’ ambassador to the United Nations, Lana Nusseibeh.

Nusseibeh shared her own “embarrassing” anecdote, saying that once while trying to keep up with the UAE’s foreign minister on the streets of New York, she got her heel stuck in a gutter and it broke off. She did her best to keep up.

“Men, frankly, don’t run in heels,” Nusseibeh said.

May also spoke about a type of boys-club culture that existed when she first entered the House of Commons as a member of parliament in the late 1990s, with “a huge emphasis on the men sort-of drinking together and getting together into groups.”

“Some of the women felt they had to join that, and I didn’t,” May said. “I wanted to do it the way I wanted to do it. So, I did it my way. I was myself and, hey, I was prime minister.”

May stepped down as Conservative leader last year, leaving behind a legacy as a prime minister who for three years faced the difficult process of trying to get Britain out of the European Union with stubborn determination.

She told the audience that she hopes to be looked upon by young girls as an inspirational leader committed to public service. She also urged women in leadership positions to actively support other women and encourage them to share their experiences.

“The men network. They network a lot. They will use contacts in order to help them through in their careers, and we don’t do enough of that and we should be doing that as women,” May said.

Aya Batrawy, The Associated Press

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