The Labour Government

[meltonblue]

They may well have great ideas for growth but it’s all pie in the sky with the budget being focused on plugging yet another hole in other words we all pay more (because everyone’s tax is going up not just the high earners) just to stand still.

This constant uncertainty is damaging to confidence, people uncertain with what the budget will bring won’t be spending for Christmas, that’ll further damage a fragile situation. Reeves once in a parliament budget of tax rises hasn’t lasted the year. Unemployment up. Inflation up. Interest rates up. National chains shuttering up. Everyone else’s fault but her own. She is hanging on by the last of her credibility. Both her and Starmer will be gone by June unless a miracle not of their making happens.

It’s all a little depressing really.

I don’t disagree with any of that :)

 

[hampshireblue]

They may well have great ideas for growth but it’s all pie in the sky with the budget being focused on plugging yet another hole in other words we all pay more (because everyone’s tax is going up not just the high earners) just to stand still.

This constant uncertainty is damaging to confidence, people uncertain with what the budget will bring won’t be spending for Christmas, that’ll further damage a fragile situation. Reeves once in a parliament budget of tax rises hasn’t lasted the year. Unemployment up. Inflation up. Interest rates up. National chains shuttering up. Everyone else’s fault but her own. She is hanging on by the last of her credibility. Both her and Starmer will be gone by June unless a miracle not of their making happens.

It’s all a little depressing really.

Any reduction in disposable income on anyone except the very wealthy wil inevitably lead to a drop in money in the real economy. She needs to balance how she does this very carefully.

 

[NPBlue]

They may well have great ideas for growth but it’s all pie in the sky with the budget being focused on plugging yet another hole in other words we all pay more (because everyone’s tax is going up not just the high earners) just to stand still.

This constant uncertainty is damaging to confidence, people uncertain with what the budget will bring won’t be spending for Christmas, that’ll further damage a fragile situation. Reeves once in a parliament budget of tax rises hasn’t lasted the year. Unemployment up. Inflation up. Interest rates up. National chains shuttering up. Everyone else’s fault but her own. She is hanging on by the last of her credibility. Both her and Starmer will be gone by June unless a miracle not of their making happens.

It’s all a little depressing really.

It is depressing, but it isn't her fault.

Brexit has reduced tax revenues by £40B a year, and who's fault is that? The same people that lied through their teeth to achieve it for their own financial gain, and now rail against her for having to deal with the situation they created.

 

[hilts]

It is depressing, but it isn't her fault.

Brexit has reduced tax revenues by £40B a year, and who's fault is that? The same people that lied through their teeth to achieve it for their own financial gain, and now rail against her for having to deal with the situation they created.

Haha fuckin hell.

 

[blueinsa]

Haha fuckin hell.

Fast forward to 2067….it was the Tories and Brexit to blame for the black holes….

 

[BridgyDids]

Fast forward to 2067….it was the Tories and Brexit to blame for the black holes….

Well, if Brexit was the problem, and has not been fixed by then, then it would need raising and sorting surely?

Also, what is the correct time period to absolve Brexit of any responsibility for the weakening economy? 2 years? 6 months? Never?

 

[hampshireblue]

Well, if Brexit was the problem, and has not been fixed by then, then it would need raising and sorting surely?

Also, what is the correct time period to absolve Brexit of any responsibility for the weakening economy? 2 years? 6 months? Never?

There is no way of avoiding the fact that tax revenues are down by an estimated £40bn per year. We all know that the referendum is in the past as is the implementation of Brexit(more to come), but the ongoing effect is with us and will continue to be so.

However, it is imperative the government starts to concentrate on the estimated £135bn tax lost to the "black economy".

 

[hilts]

Fast forward to 2067….it was the Tories and Brexit to blame for the black holes….

It was windy today, if it wasnt for Brexit we could send our wind back ffs!
Paper cut ? Brexit
Eurovision nil poi Brexit
Robbing from co op Brexit

If we could turn back time, if we could find a way. Who knew Cher was so wise :-)

 

[Brewster's millions]

There is no way of avoiding the fact that tax revenues are down by an estimated £40bn per year. We all know that the referendum is in the past as is the implementation of Brexit(more to come), but the ongoing effect is with us and will continue to be so.

However, it is imperative the government starts to concentrate on the estimated £135bn tax lost to the "black economy".

Good to see this fabled £40bn figure getting an airing again.

An estimate based on someone drawing a straight line on a graph from 2016, and which ignores any impact from the greatest disruption to hit developed economies since WW2. And indeed the performance of comparable economies within the EU over the past decade.

The unfortunate truth is that meaningful revisions to the OBR’s productivity estimates are nothing new, and the downgrade set to be revealed next month will in fact be small relative to some of those seen in the OBR’s formative years.

This risk of changing potential GDP assumptions, of any actual Brexit drag and the threat of entrenched inflation / higher borrowing costs were all obvious a year ago. Startlingly obvious in fact. And yet Reeves still chose to push borrowing higher by hundreds of billions of pounds, and decided that a margin for error of under £10bn five years’ forward, in a highly uncertain environment, was appropriate.

Her own judgements, and the government’s shambolic attempts to curb the growth of welfare expenditure, are the reasons why Reeves will need to raise taxes again next month. An apparent one-off punishing tax grab last October, not to be repeated in this parliament, and yet here we are again 12 months down the line

It’s rank incompetence and Reeves can’t reasonably blame anyone other than herself for the mess she’s created.

 

[hilts]

Well, if Brexit was the problem, and has not been fixed by then, then it would need raising and sorting surely?

Also, what is the correct time period to absolve Brexit of any responsibility for the weakening economy? 2 years? 6 months? Never?

Who is absolving? Pant pissing for a decade is hilarious though. If you believe Brexit is the primary cause of our current woes, fine. But please remember the remainers said -

We shouldn't have referendums
Only our very clever politicians can understand such complex situations(can't organise a rail track, fuck up a proper hillsborough inquiry for decades, have shit in our water, can't call out genocide and still havent sorted out the post office scandal or grooming gangs bwaaah)

You have a remainer PM and govt now, wait for him to save you from your angst. If you're not happy vote for someone else, preferably not one of the fptp parties because its them who brought you here and the daft fuckers who voted for them. Some need to own their own vote.

At the very least draw a fucking line and move on. It happened.

The adults are in charge now and plenty of the public are supposedly regretting their vote. You lot wanted them to sort it out leave it to em.

Good luck:-)

 

[hampshireblue]

Good to see this fabled £40bn figure getting an airing again.

An estimate based on someone drawing a straight line on a graph from 2016, and which ignores any impact from the greatest disruption to hit developed economies since WW2. And indeed the performance of comparable economies within the EU over the past decade.

The unfortunate truth is that meaningful revisions to the OBR’s productivity estimates are nothing new, and the downgrade set to be revealed next month will in fact be small relative to some of those seen in the OBR’s formative years.

This risk of changing potential GDP assumptions, of any actual Brexit drag and the threat of entrenched inflation / higher borrowing costs were all obvious a year ago. Startlingly obvious in fact. And yet Reeves still chose to push borrowing higher by hundreds of billions of pounds, and decided that a margin for error of under £10bn five years’ forward, in a highly uncertain environment, was appropriate.

Her own judgements, and the government’s shambolic attempts to curb the growth of welfare expenditure, are the reasons why Reeves will need to raise taxes again next month. An apparent one-off punishing tax grab last October, not to be repeated in this parliament, and yet here we are again 12 months down the line

It’s rank incompetence and Reeves can’t reasonably blame anyone other than herself for the mess she’s created.

This really does appear to be a case of BKB

I'm sure if the £40bn is not about right, there would be numerous articles supporting an alternative figure. I am struggling to find any apart from an organisation supported by that well known Brexiteer Patrick Minford.

The straight line in most of the reports starts, not in 2016 but when the transition period ended in 2022 (and funnily enough, after C19).

It is pretty clear welfare needs curbing, but where to start. The vast majority of welfare goes to state pension and in work benefits. Only around 5% goes to out of work benefits. Savings need to be made, but who are you going to target, working people or pensioners if savings are to be truly effective?

Last year's "tax grab" had no effect on personal allowances or personal NI. The average man in the street is no worse off at present than they otherwise would have been. We're not even up to the date to which the Tories froze personal allowances yet.

The last 15 months has been somewhat disappointing but the poison chalice they inherited was always going to be tough. In fact it was the very reason Sunak went for an early election as they knew the mess that was coming down the tracks.

Once again though, we get nothing but sniping devoid of any constructive solutions. But as we all know....

 

[hilts]

This really does appear to be a case of BKB

I'm sure if the £40bn is not about right, there would be numerous articles supporting an alternative figure. I am struggling to find any apart from an organisation supported by that well known Brexiteer Patrick Minford.

The straight line in most of the reports starts, not in 2016 but when the transition period ended in 2022 (and funnily enough, after C19).

It is pretty clear welfare needs curbing, but where to start. The vast majority of welfare goes to state pension and in work benefits. Only around 5% goes to out of work benefits. Savings need to be made, but who are you going to target, working people or pensioners if savings are to be truly effective?

Last year's "tax grab" had no effect on personal allowances or personal NI. The average man in the street is no worse off at present than they otherwise would have been. We're not even up to the date to which the Tories froze personal allowances yet.

The last 15 months has been somewhat disappointing but the poison chalice they inherited was always going to be tough. In fact it was the very reason Sunak went for an early election as they knew the mess that was coming down the tracks.

Once again though, we get nothing but sniping devoid of any constructive solutions. But as we all know....

At this moment in time does anybody have any constructive solutions? I think there is a lot of finger crossing going on here and probably throughout Europe. I personally cannot see where enough growth is gonna come from tbh. So much needs doing and the wheels of government work far too slowly, painfully so.
I think the job is just far to big for politicians and I dont have a solution for that.

 

[hampshireblue]

At this moment in time does anybody have any constructive solutions? I think there is a lot of finger crossing going on here and probably throughout Europe. I personally cannot see where enough growth is gonna come from tbh. So much needs doing and the wheels of government work far too slowly, painfully so.
I think the job is just far to big for politicians and I dont have a solution for that.

I have previously put forward some ideas. Pension buy-out, increased VAT in some areas and a reduction in others, a more progressive tax system (20-40-60-45%) makes no sense. Growth ulitmately comes from confidence, both consumer and business and this is where Reeves has to try harder ands you're right about the slow ability to react by government. But at least Rayner was trying to change that with regards to house building but even that was hitting obstacles by locals.

Whilst growth is lower than we would all like, it is at least upwards and we haven't seen a negative figure since 2023. This does at least indicate some resilience in the economy and hopefully some of that much needed stability and confidence.

 

[hilts]

I have previously put forward some ideas. Pension buy-out, increased VAT in some areas and a reduction in others, a more progressive tax system (20-40-60-45%) makes no sense. Growth ulitmately comes from confidence, both consumer and business and this is where Reeves has to try harder ands you're right about the slow ability to react by government. But at least Rayner was trying to change that with regards to house building but even that was hitting obstacles by locals.

Whilst growth is lower than we would all like, it is at least upwards and we haven't seen a negative figure since 2023. This does at least indicate some resilience in the economy and hopefully some of that much needed stability and confidence.

That day when posters were putting ideas forward was the sanest we've had it on here for a while:-) if some working class oinks on a footy forum can at least come up with something new then the hundreds of politicians we pay shouldn't be so fucking useless/scared of doing so.

We need some actual vision from them.

 

[Brewster's millions]

This really does appear to be a case of BKB

I'm sure if the £40bn is not about right, there would be numerous articles supporting an alternative figure. I am struggling to find any apart from an organisation supported by that well known Brexiteer Patrick Minford.

The straight line in most of the reports starts, not in 2016 but when the transition period ended in 2022 (and funnily enough, after C19).

It is pretty clear welfare needs curbing, but where to start. The vast majority of welfare goes to state pension and in work benefits. Only around 5% goes to out of work benefits. Savings need to be made, but who are you going to target, working people or pensioners if savings are to be truly effective?

Last year's "tax grab" had no effect on personal allowances or personal NI. The average man in the street is no worse off at present than they otherwise would have been. We're not even up to the date to which the Tories froze personal allowances yet.

The last 15 months has been somewhat disappointing but the poison chalice they inherited was always going to be tough. In fact it was the very reason Sunak went for an early election as they knew the mess that was coming down the tracks.

Once again though, we get nothing but sniping devoid of any constructive solutions. But as we all know....

Bloody hell.

If you take a step back and actually think about things, you’d realise that the very fact the OBR are charging their productivity forecasts again undermines this silly assumption that Brexit has obviously reduced tax receipts by £40bn a year.

The OBR’s supply-side assumptions change frequently and often by large amounts - a fact Reeves was apparently unaware of last year. The idea that a very precise proportion of this shortfall in productivity growth can be attributed to Brexit, and that this impact will hold steady over an extended period (relative to a straight line on a chart from 2016 onwards) really is very silly.

Back in November 2011 the OBR expected cumulative labour productivity growth of 9.5% over the next five years, and in actual fact productivity increased by about 1% over that period. A huge forecast error, by anyone’s standards. And yet you believe that their estimate around how Brexit might impact UK productivity - which at 1.4%pts constitutes a mere fraction of their earlier forecast errors - is definitely correct and the root cause of the UK’s fiscal problems.

Doesn’t really make sense does it, given that the confidence in any estimate should be standardised by the typical error seen around these forecasts.

It’s pretty basic stuff. I would hope that you can see the fragility of your argument, even if Rachel Reeves can’t.

 

[hampshireblue]

Bloody hell.

If you take a step back and actually think about things, you’d realise that the very fact the OBR are charging their productivity forecasts again undermines this silly assumption that Brexit has obviously reduced tax receipts by £40bn a year.

The OBR’s supply-side assumptions change frequently and often by large amounts - a fact Reeves was apparently unaware of last year. The idea that a very precise proportion of this shortfall in productivity growth can be attributed to Brexit, and that this impact will hold steady over an extended period (relative to a straight line on a chart from 2016 onwards) really is very silly.

Back in November 2011 the OBR expected cumulative labour productivity growth of 9.5% over the next five years, and in actual fact productivity increased by about 1% over that period. A huge forecast error, by anyone’s standards. And yet you believe that their estimate around how Brexit might impact UK productivity - which at 1.4%pts constitutes a mere fraction of their earlier forecast errors - is definitely correct and the root cause of the UK’s fiscal problems.

Doesn’t really make sense does it, given that the confidence in any estimate should be standardised by the typical error seen around these forecasts.

It’s pretty basic stuff. I would hope that you can see the fragility of your argument, even if Rachel Reeves can’t.

Bloody hell indeed. So the OBR is not fit for purpose but after 15 years there appears to be no push to replace it.

I hate using AI for an overview but in true BKB fashion the below shows how he chooses to cherry pick to back up his view. It's not perfect but it's better than previous methods and better than many of its' peers.


The accuracy of OBR forecasts is a mixed picture: they are considered generally accurate compared to previous Treasury forecasts and perform well against European averages for GDP growth, but they have persistently overestimated productivity growth and their medium-to-long-term accuracy is limited by their reliance on assumptions and the exclusion of future policy changes. Overall, forecasts are best seen as informed snapshots rather than precise guarantees.

Where OBR forecasts are considered accurate

• GDP growth:
  The OBR's forecasts for real GDP growth are more accurate than the European average for one, two, and three years ahead.
  
  
• Comparison to Treasury:
  The OBR's forecasts for GDP and the public finances have typically been more accurate than previous forecasts made by the Treasury.
  
  
• Short-term inflation:
  One-year ahead forecasts for CPI inflation have, on average, been in line with outturns.
  

Areas where OBR forecasts are less accurate

• Productivity growth:
  The OBR has persistently overestimated productivity growth since 2010.
  
  
• Medium-term inflation:
  Two- and five-year ahead forecasts have, on average, underestimated inflation.
  
  
• Long-term forecasts:
  The accuracy of medium- to long-term forecasts (two- to five-year horizons) is limited because they are based on assumptions about future policy and economic conditions, which can be wrong.
  
  
• Exclusion of future policy:
  Forecasts are based only on policies that are officially in place when the forecast is made, meaning they can't account for future government policies or significant external events.
  

Key takeaways

• Not a perfect science:
  Economic forecasting is inherently uncertain and influenced by many variables, so forecasts are not guaranteed to be correct.
  
  
• Best for short-term guidance:
  OBR forecasts are most accurate in the short term and for guiding immediate policy decisions, but their accuracy decreases significantly for longer-term projections.
  
  
• Use with caution:
  They should be viewed as a tool for understanding the potential economic impact of current policies, rather than as a precise prediction of the future.

 

[hampshireblue]

That day when posters were putting ideas forward was the sanest we've had it on here for a while:-) if some working class oinks on a footy forum can at least come up with something new then the hundreds of politicians we pay shouldn't be so fucking useless/scared of doing so.

We need some actual vision from them.

You're right. But there will be winners and losers and as soon as someone is the wrong side of the line intransigence sets in.

 

[Brewster's millions]

Bloody hell indeed. So the OBR is not fit for purpose but after 15 years there appears to be no push to replace it.

I hate using AI for an overview but in true BKB fashion the below shows how he chooses to cherry pick to back up his view. It's not perfect but it's better than previous methods and better than many of its' peers.


The accuracy of OBR forecasts is a mixed picture: they are considered generally accurate compared to previous Treasury forecasts and perform well against European averages for GDP growth, but they have persistently overestimated productivity growth and their medium-to-long-term accuracy is limited by their reliance on assumptions and the exclusion of future policy changes. Overall, forecasts are best seen as informed snapshots rather than precise guarantees.

Where OBR forecasts are considered accurate

• GDP growth:
  The OBR's forecasts for real GDP growth are more accurate than the European average for one, two, and three years ahead.
  
  
• Comparison to Treasury:
  The OBR's forecasts for GDP and the public finances have typically been more accurate than previous forecasts made by the Treasury.
  
  
• Short-term inflation:
  One-year ahead forecasts for CPI inflation have, on average, been in line with outturns.

Areas where OBR forecasts are less accurate

• Productivity growth:
  The OBR has persistently overestimated productivity growth since 2010.
  
  
• Medium-term inflation:
  Two- and five-year ahead forecasts have, on average, underestimated inflation.
  
  
• Long-term forecasts:
  The accuracy of medium- to long-term forecasts (two- to five-year horizons) is limited because they are based on assumptions about future policy and economic conditions, which can be wrong.
  
  
• Exclusion of future policy:
  Forecasts are based only on policies that are officially in place when the forecast is made, meaning they can't account for future government policies or significant external events.

Key takeaways

• Not a perfect science:
  Economic forecasting is inherently uncertain and influenced by many variables, so forecasts are not guaranteed to be correct.
  
  
• Best for short-term guidance:
  OBR forecasts are most accurate in the short term and for guiding immediate policy decisions, but their accuracy decreases significantly for longer-term projections.
  
  
• Use with caution:
  They should be viewed as a tool for understanding the potential economic impact of current policies, rather than as a precise prediction of the future.

Hmm. AI suggests they’ve been persistently wrong on productivity growth, and their error has been in a single direction.

So why are you putting so much weight on a simplistic assumption from the OBR of how Brexit may impact productivity growth, and why is Rachel Reeves so surprised that the OBR may revise down their productivity assumptions again?

Seems AI agrees with me. Thanks for posting.

 

[SkyBlueFlux]

I have previously put forward some ideas. Pension buy-out, increased VAT in some areas and a reduction in others, a more progressive tax system (20-40-60-45%) makes no sense. Growth ulitmately comes from confidence, both consumer and business and this is where Reeves has to try harder ands you're right about the slow ability to react by government. But at least Rayner was trying to change that with regards to house building but even that was hitting obstacles by locals.

Whilst growth is lower than we would all like, it is at least upwards and we haven't seen a negative figure since 2023. This does at least indicate some resilience in the economy and hopefully some of that much needed stability and confidence.

There is an enormous number of high earners who are currently ensuring they earn <£100k per year by stacking their pensions so that they don’t lose child tax credits and get caught in the 60% marginal bracket. Even worse there are people out there literally avoiding getting promoted, or going down to 3-4 days per week.

This takes money out of the economy and locks it up somewhere with tax relief that won’t be accessed for decades.

Some might think this is a small issue but this is the most economically productive 10% of our workforce and they contribute over a third of our income tax revenue.

It’s actually insane to me this hasn’t been fixed way sooner - instead we sit and wonder why our productivity is so bad! Most jobs are underpaid, and the ones that aren’t are incentivised to make people want to be paid less. It’s fucking bonkers. And more and more people every year are crossing into that threshold because of inflation and fiscal drag.

It was negligent that the Tories didn’t fix it. If Labour also don’t fix it either then we might as well just give up because this is one of the most obvious tax policy problems a government has ever been faced with. If they don’t fix this, then they’re not going to be fixing anything else.

 

[hampshireblue]

Hmm. AI suggests they’ve been persistently wrong on productivity growth, and their error has been in a single direction.

So why are you putting so much weight on a simplistic assumption from the OBR of how Brexit may impact productivity growth, and why is Rachel Reeves so surprised that the OBR may revise down their productivity assumptions again?

Seems AI agrees with me. Thanks for posting.

You really are narrow minded sometimes. I posted the AI bit, not to prove you right( although we know you always think you are, or BKB wouldn't have caught on), but to show how you cherry pick. If I wanted to show the OBR to be good. I wouldn't have bothered with the "not so good" bits. You, however pick one item and try to run with that as proof they are crap across the board, which appears to be not the case.

If you had said the OBR is generally OK with forecasting but poor on productivity forecasting, then you get some credibiity and context into the discussion, but no.

But if it makes you feel good about yourself coming from a totally non-balanced starting point, crack on, I'm glad you're glad.

I'm just looking for your scathing posts about forecasters getting inflation wrong by 0.2% over the period of a single month.

Anything constructive to say on putting things right?