The Labour Government

Brewster's millions said:
Three more business surveys released this morning, all showing business confidence / hiring intentions to be on its arse, thanks in large part to this government’s tax rises.

This of course follows last week’s MPC meeting where the Committee increasingly linked inflationary pressures to the ENIC hike.

The more notable element in today’s surveys however was how businesses are again linking weak activity levels to concerns around the additional tax rises awaiting in the Budget, a trend which clearly threatens to develop its own momentum as the public finances deteriorate further.

The impact of the ENIC appears to have been weaker employment growth if not outright job cuts, weaker GDP growth, higher borrowing costs via higher RPI and higher borrowing costs via the APF, due to growing MPC concerns around the inflationary impact of the tax hike.

Has the ENIC hike really improved the public finances? I think the evidence is suggesting otherwise.
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Somebody in government needs a crash course on the Laffer curve. We are already past the sweet spot so any additional taxes actually reduce revenue due to the negative effect on economic activity.

What the government should be doing is reducing taxes in a smart way to stimulate growth in the economy, this is what Truss got right.

However, this needs to be preceded by serious action to reduce government spending to appease the bond markets, this is what Truss got wrong.

Reeves can't reduce government spending, so can't reduce taxes, so the economy is going to continue to struggle. Flagging economy equals rising debt, so we're stuck in a debt doom loop.

I actually feel sorry for the woman at this point.
 
Hgblue2 said:
Somebody in government needs a crash course on the Laffer curve. We are already past the sweet spot so any additional taxes actually reduce revenue due to the negative effect on economic activity.

What the government should be doing is reducing taxes in a smart way to stimulate growth in the economy, this is what Truss got right.

However, this needs to be preceded by serious action to reduce government spending to appease the bond markets, this is what Truss got wrong.

Reeves can't reduce government spending, so can't reduce taxes, so the economy is going to continue to struggle. Flagging economy equals rising debt, so we're stuck in a debt doom loop.

I actually feel sorry for the woman at this point.
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You're right. But the tax benefits have to be aimed at the lower paid. They, generally will churn any benefits back into the economy. That is not the case at the other end of the scale where much of any reduced taxes are squirreled away, spent abroad or saved and so do not necessarily benefit the wider economy.
 


The Housemartins had it right in the 80s:

Feigning concern, a Conservative pastime
Makes you feel doubtful right from the start
The expression she pulls is exactly like last time
You've got to conclude she just hasn't a heart
 
I remember paying over 30% IT (I think it was 35%) on a very ordinary salary back in the 1970s. The good news was that public services worked back then.

Thatcher's policy of selling everything not nailed down while at the same time reaping the huge oil revenues of her era and using the proceeds to cut tax massively, had one slight snag. It got people used to unrealistically low levels of taxation. Yes, that's right. Unrealistically low for a broadly social democratic European state as opposed to Arkansas. Now the assets have all gone, the oil revenues are well past their peak, and we are fucked. I know who I blame - the British people and their naive belief that you should be able to buy, as it were, fillet steak for 75p. And blaming the butcher for not achieving this.
 
BrianW said:
I know who I blame - the British people and their naive belief that you should be able to buy, as it were, fillet steak for 75p. And blaming the butcher for not achieving this.
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But surely that is the problem of politicians selling an impossible dream for decades. Whilst we have politicians who are unwilling to put the stark choices and options on the table for all to see, you cant blame the public for being in dreamland. There is little transparency to the average man or woman in the street or political parties providing clear choices.

The only thing they want to make clear are the easy ones to sell e.g. we wont raise NI, VAT or Income tax. There's too much saying things for political gain and not enough truth.

Is it really too much to ask, that the people leading the country should be honest ? I dont think thats naivety.
 
Kompany Car said:
But surely that is the problem of politicians selling an impossible dream for decades. Whilst we have politicians who are unwilling to put the stark choices and options on the table for all to see, you cant blame the public for being in dreamland. There is little transparency to the average man or woman in the street or political parties providing clear choices.

The only thing they want to make clear are the easy ones to sell e.g. we wont raise NI, VAT or Income tax. There's too much saying things for political gain and not enough truth.

Is it really too much to ask, that the people leading the country should be honest ? I dont think thats naivety.
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Starmer tried this shortly after getting in. He was promptly criticised for running the country down.
 
Honest politicians don't get elected.

At a General Election, the parties compete to sell the most persuasive fantasy. They are (all) worse than double glazing salesmen, but that is what we have (collectively) chosen to reward.

Stand on a policy of realism and facts and you would be slaughtered. People don't want to know.
 
BrianW said:
Honest politicians don't get elected.

At a General Election, the parties compete to sell the most persuasive fantasy. They are (all) worse than double glazing salesmen, but that is what we have (collectively) chosen to reward.

Stand on a policy of realism and facts and you would be slaughtered. People don't want to know.
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It's why I won't vote and haven't done for years. No one to vote for, funnily enough since Corbyn, but I disliked him anyway.

Real politicians disappeared years ago. Y,all just voting celebs and whomever the rich media owners want in power.
 
Hgblue2 said:
Somebody in government needs a crash course on the Laffer curve. We are already past the sweet spot so any additional taxes actually reduce revenue due to the negative effect on economic activity.

What the government should be doing is reducing taxes in a smart way to stimulate growth in the economy, this is what Truss got right.

However, this needs to be preceded by serious action to reduce government spending to appease the bond markets, this is what Truss got wrong.

Reeves can't reduce government spending, so can't reduce taxes, so the economy is going to continue to struggle. Flagging economy equals rising debt, so we're stuck in a debt doom loop.

I actually feel sorry for the woman at this point.
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You missed out the words (Economically discredited) before Laffer curve.
 
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