The Labour Government

[The Light Was Yellow Sir]

I do find it amusing to see the people who regarded austerity as being completely unnecessary when the budget deficit was over 10% of GDP now spending their days defending it when the deficit is at 4% of GDP.

Which surely goes to prove it didn’t work, ffs.

 

[BlueAnorak]

I thought Hunt was a moron, but Rachel Reeves is shaping up to be a disaster.
Removing the Winter fuel allowance from folks not on pension credits will save 1.4bn and cost between 2bn and 4.2bn for new Pension Credit claims. Genius.
Simply tapering the allowance based on the amount of tax a pensioner pays would save half that but result in no extra pension credit claims.
Then there is VAT on school fees. The Tusami of pupils wanting state places will undoubtably cost more than it raises.
Then we hear today that there will be higher Employer NI contributions - that's going to encourage job growth and investment isn't it...
Entering the doom loop...

 

[Scottyboi]

I thought Hunt was a moron, but Rachel Reeves is shaping up to be a disaster.
Removing the Winter fuel allowance from folks not on pension credits will save 1.4bn and cost between 2bn and 4.2bn for new Pension Credit claims. Genius.
Simply tapering the allowance based on the amount of þax a pensioner pays would save half that but result in no extra pension credit claims.
Then there is VAT on school fees. The Tusami of pupils wanting state places will undoubtably cost more than it raises.
Then we hear today that there will be higher Employer NI contributions - that's going to encourage job growth and investment isn't it...
Entering the doom loop...

Surely the money for people eligible but not claiming for pension credit is already set aside? That has to be taken into account every year so they don't get caught out by a sudden rush of claims from shows like Martin Lewis or the government running a campaign to raise awareness.

I don't buy the tsunami of pupils either just an exaggerated excuse to try and keep the swindle going longer.

Should have reversed the stupid NI cuts the tories brought it that we couldn't afford.

 

[BlueAnorak]

Surely the money for people eligible but not claiming for pension credit is already set aside? That has to be taken into account every year so they don't get caught out by a sudden rush of claims from shows like Martin Lewis or the government running a campaign to raise awareness.

You'd like to think so - but no she hasn't.

 

[KS55]

I thought Hunt was a moron, but Rachel Reeves is shaping up to be a disaster.
Removing the Winter fuel allowance from folks not on pension credits will save 1.4bn and cost between 2bn and 4.2bn for new Pension Credit claims. Genius.
Simply tapering the allowance based on the amount of tĵax a pensioner pays would save half that but result in no extra pension credit claims.
Then there is VAT on school fees. The Tusami of pupils wanting state places will undoubtably cost more than it raises.
Then we hear today that there will be higher Employer NI contributions - that's going to encourage job growth and investment isn't it...
Entering the doom loop...

For ‘disaster’ read ‘highly orthodox former Bank of England employee’ What did you expect? In principle her policies will be no different from the Tories. Detailed differences only.

 

[hilts]

It's what I expected, some told all and sundry that the socialist saints will save us while it looks like they just got a bigger spade and started digging a lot faster.

I think plenty said vote lib dem get Tories
It seems it was vote Labour get Tory ideology.:-)

 

[Metal Biker]

I think plenty said vote lib dem get Tories
It seems it was vote Labour get Tory ideology.:-)

I voted Lib Dem and got Labour.

I'm so confused!

 

[bluenova]

No austerity for me, these pay rises for people are superb.

There are some bizarre takes around. One of the key planks of Osborne's austerity was the public sector pay freeze, and his commitment to cut public sector jobs. Yet now we're being told that not only are the pay rises austerity, but it's ALSO unaffordable and inflationary.

We're now being told that tax rises are likely for CGT and IHT - two taxes on "unearned" income that were in Corbyn's manifestos, which are usually considered wealth taxes, are also actually austerity. If they do manage to raise those taxes and can blame the Tories for it, then it's a win win for the left.

So far the main action on benefits, has been to remove the Winter Fuel Allowance from everyone not on a low income, and a campaign to encourage more people on low incomes to claim Pension Credit. I'm not sure it was great politics to cut the WFA, or particularly fair for those just above the limits, but if more people claim PC and we end up spending the same amount, but targeted towards the poorer pensioners, then that's a progressive move.

After 14 years of the Tories blaming Labour for everything that went wrong in the economy, and the language used by Labour going into the election, I'm not sure who is surprised that they didn't just throw all that in the bin on day one, and say, "you're right, we are going spend, spend, spend!". If anything they made it abundantly clear that they would hammer the Tories, and play this game.

 

[The Future’s Blue!]

There are some bizarre takes around. One of the key planks of Osborne's austerity was the public sector pay freeze, and his commitment to cut public sector jobs. Yet now we're being told that not only are the pay rises austerity, but it's ALSO unaffordable and inflationary.

We're now being told that tax rises are likely for CGT and IHT - two taxes on "unearned" income that were in Corbyn's manifestos, which are usually considered wealth taxes, are also actually austerity. If they do manage to raise those taxes and can blame the Tories for it, then it's a win win for the left.

So far the main action on benefits, has been to remove the Winter Fuel Allowance from everyone not on a low income, and a campaign to encourage more people on low incomes to claim Pension Credit. I'm not sure it was great politics to cut the WFA, or particularly fair for those just above the limits, but if more people claim PC and we end up spending the same amount, but targeted towards the poorer pensioners, then that's a progressive move.

After 14 years of the Tories blaming Labour for everything that went wrong in the economy, and the language used by Labour going into the election, I'm not sure who is surprised that they didn't just throw all that in the bin on day one, and say, "you're right, we are going spend, spend, spend!". If anything they made it abundantly clear that they would hammer the Tories, and play this game.

Easily understandable to most but, then again, it all depends on what side of the fence you are sitting.

Snipers in the stands.

 

[Brewster's millions]

There are some bizarre takes around. One of the key planks of Osborne's austerity was the public sector pay freeze, and his commitment to cut public sector jobs. Yet now we're being told that not only are the pay rises austerity, but it's ALSO unaffordable and inflationary.

We're now being told that tax rises are likely for CGT and IHT - two taxes on "unearned" income that were in Corbyn's manifestos, which are usually considered wealth taxes, are also actually austerity. If they do manage to raise those taxes and can blame the Tories for it, then it's a win win for the left.

So far the main action on benefits, has been to remove the Winter Fuel Allowance from everyone not on a low income, and a campaign to encourage more people on low incomes to claim Pension Credit. I'm not sure it was great politics to cut the WFA, or particularly fair for those just above the limits, but if more people claim PC and we end up spending the same amount, but targeted towards the poorer pensioners, then that's a progressive move.

After 14 years of the Tories blaming Labour for everything that went wrong in the economy, and the language used by Labour going into the election, I'm not sure who is surprised that they didn't just throw all that in the bin on day one, and say, "you're right, we are going spend, spend, spend!". If anything they made it abundantly clear that they would hammer the Tories, and play this game.

I don’t think anyone has made a claim as bizarre as yours regarding scrapping the WFA. A ‘progressive move’? That’s really quite something.

You appear to be overthinking things regarding the definition of austerity. The bottom line, as I posted before the election, is that Labour has maintained the same primary fiscal rule as the previous government, and if Reeves is committed to balancing the current budget - as she has stated - then the new fiscal architecture is actually more conservative and restrictive for the public finances than the framework operated by Hunt.

The profile of public sector borrowing that Reeves will outline in the October Budget will look very, very similar to those projected in the past few fiscal statements; a steady decline in borrowing, constrained spending, a rising tax burden and the fiscal target being hit five years ahead. If people were happy to describe that as austerity while Hunt was Chancellor, then I’m afraid it’s going to be the same under Reeves.

So far Reeves has constructed a largely false narrative around the state of the economy and public finances in order to clear the path politically for a small number of tax rises and spending cuts in some areas, so that larger public sector pay deals can be delivered. These are essentially political moves and leave the fiscal outlook little changed in the context of a trillion pound annual tax take.

If you and others are happy with these measures then that’s fair enough - they are politically-motivated after all - but let’s not pretend that scrapping the WFA allowance is a progressive move because that’s just nonsense I’m afraid.