Arthur Laffer, a prominent US economist and former economic adviser to three presidents, has warned Prime Minister Andy Burnham that Britain is "taxing itself to death." Laffer stated that the UK is in a "death spiral" ahead of his visit to the country and the upcoming October Budget.
Writing in The Telegraph, Laffer said, "I have never heard of an economy being taxed into prosperity. What’s happening is, Britain is taxing itself into death. Your problem is not too little revenue. Your problem is too little growth, too little prosperity." He advised Ronald Reagan, Bill Clinton, and Donald Trump on economic policy and is known for the 'Laffer Curve' theory.
Laffer warned the Prime Minister that additional tax increases in next month's Budget could worsen the perception of the government's handling of public finances. This intervention follows a period where global borrowing costs have surged, with the yield on the UK's 10-year gilt reaching 5.294 per cent last week, its highest level since the 2008 global financial crisis.
Lord Jim O’Neill, a former economic adviser to Burnham, urged the Prime Minister to take immediate action to reassure investors. O'Neill suggested that bond markets would react positively if Burnham took "credible action to deal with the excesses of the triple lock or the excesses of welfare spending."