The Labour Government

[metalblue]

From the Guardian. Difficult to see any other outcome than raised taxes.

Rachel Reeves needs to put up taxes to cover £40bn deficit, thinktank says

NIESR suggests a rise of 5p in the pound on basic and higher rate of income tax would fill the budget gap

www.theguardian.com

She’s pissed through £40bn from last budget if they come back this autumn asking for more they’re going to look incompetent and be booted out next election with typical Labour tax rises anti growth etc (assuming we have a vaguely credible alternative).

I don’t see what other options she has though as she can’t get her cuts through parliament and a boss who doesn’t have a backbone.

 

[threespires]

Great post! How could ANYONE who's vaguely sensible, argue with that???

There's a good read here on public sector productivity if you have the time

Public service productivity | Institute for Government

What is public service productivity and how is it measured?

www.instituteforgovernment.org.uk

 

[metalblue]

So no defence spending then?

Have you seen the state of most unadopted roads?

But taxes on the poor certainly mean money not being spent locally, whereas taxing the rich means less going unspent, or more being spent on foreign holidays or foreign-made luxury goods.

Foreign made luxury goods are usually purchased in UK, foreign holidays booked through UK companies. All employing people and incur VAT.

Unadopted roads are few and far between in this country and aren’t fixed by the state but rather the property owners.

The crux of your post being the money isn’t spent is the main problem for the government (any government) - I’ve said before we need to encourage the wealthy to invest money in the economy to stop it sitting dormant. There is no other viable solution to wanting better public services than growth.

 

[hcblue95]

It’s not factored in to the price cap mate. The real slight of hand is that our price cap is based on the most expensive source, even if only 10% of all our leccy comes from this most expensive source we are all paying as if 100% did. That can dramatically increase profits for these energy companies that the government now taxes at 78% with the recently introduced windfall tax, so now it’s really just a tax on us, the consumer.

On top of that the price cap also includes a bunch of government policy such as renewables which we pay for but don’t see the benefit in our bills. Broadly we’re getting our pants pulled down, Ed Miliband is squirming not because he doesn’t know how it works but rather knows full well how it works but doesn’t want us to.

It's based on the most expensive price because of privatisation. The cheaper generators aren't going to sell electricity at a lower price than the more expensive generators on the free market.

 

[bluenova]

From the Guardian. Difficult to see any other outcome than raised taxes.

Rachel Reeves needs to put up taxes to cover £40bn deficit, thinktank says

NIESR suggests a rise of 5p in the pound on basic and higher rate of income tax would fill the budget gap

www.theguardian.com

Someone at the financial times has pointed out that their last forecast (in May), showed a £60b deficit. So, apparently we're already £20b better off ;)

 

[Hgblue2]

Must admit election night was somewhat bitter sweet for me, the Tories got a much deserved kicking, Reform got a foothold in Parliament, but the British people in their infinite wisdom elected a lefty government at a time when our debt to gdp ratio is 100%.

So now we get to watch them govern the country with no money to spend and a bunch of people with political training but no apparent expertise or experience in charge. If you can remove yourself from the tragedy of it, it's strangely humorous in a dark kind of way.

Summed up quite nicely by the sight of the Chancellor blubbing away in the commons, regardless of whether you believe the story of the personal issues being the main cause, it's hard not to assume that the fact she's making a total pigs ear of the country's finances isn't giving her sleepless nights.

It's a constant puzzle to me that the progressive type can't get their heads round the fact that raising taxes reduces the tax take, due to the second order effects of higher taxes, but here we go again as a Labour chancellor responds to a growing deficit (est £51 billion shortfall) caused by a flagging economy, out of control government spending and inefficient public services, with drumroll, wait for it, higher taxes. Wonder how that will play out? Spoiler alert, badly.

How did we get here? Politicians refusing to address the underlying problems in the economy, because that's quite difficult and unpopular, and instead continuing to increase public spending beyond the levels that can be sustained and sticking the excess on the country's credit card.

Oh but the government can't go bankrupt said the experts, we can just print the money. Well yes, kind of, but what happens when that debt accumulates to the point when servicing the debt becomes an additional drag on government finances and the debt is the same size as your national income? Good question that eh? I'm no expert, but I reckon the answer is that we're screwed.

So sit back, watch our useless politicians attempt to keep the ponzi scheme going for as long as possible, and argue with strangers on the internet to pass the time, you never know Starmer, Reeves and Raynor might just prove me wrong. Lol

 

[mancityvstoke]

What happened to building zillions of houses then?

Just asking

 

[TinFoilHat]

Amazing how we have a big hole in our finances after 40 years of selling state assets to hedge funds and capital groups who are more interested in creaming off massive profits than providing at least a bare minimum service they a contracted to provide.

No doubt Robot Reeves will go for the destroy the poor and start on the middle class rather than put huge wealth taxes on BlackRock,Mitie,Serco etc.

 

[blueinsa]

What happened to building zillions of houses then?

Just asking

Won’t happen, mention black holes and blame the Tories

 

[mancityvstoke]

Won’t happen, mention black holes and blame the Tories

More black holes than in our galaxy.

smash the black holes, further and faster

 

[Vic]

Foreign made luxury goods are usually purchased in UK, foreign holidays booked through UK companies. All employing people and incur VAT.

Unless the UK agents / vendors are working on very tight margins (yeah sure) then the money is mostly going overseas.

Unadopted roads are few and far between in this country and aren’t fixed by the state but rather the property owners.

That was the point. An ideologue would expect the frontagers to agree to maintain the road. That means many aren't fixed.

The crux of your post being the money isn’t spent is the main problem for the government (any government) - I’ve said before we need to encourage the wealthy to invest money in the economy to stop it sitting dormant. There is no other viable solution to wanting better public services than growth.

Well, yes. The poor spend 100% of their wealth, the wealthy let it lie "dormant". Giving more money to the poor is therefore better for growth (especially if it comes from the wealthy). Growing disparity of wealth is what's killing the economy.

 

[hilts]

What happened to building zillions of houses then?

Just asking

Fuck that shit :-)

 

[Chippy_boy]

There's a good read here on public sector productivity if you have the time

Public service productivity | Institute for Government

What is public service productivity and how is it measured?

www.instituteforgovernment.org.uk

Interesting yes. This stood out for me, "Relative to 2019, the government has put a lot more money into public services, increasing inputs. However, in some services – healthcare in particular – there has not been a commensurate increase in activity. Between 2019 and 2023, staffing levels in the NHS increased by almost 20%, but key measures of activity remained broadly flat."

So 20% more staff (and presumably cost) resulting in no more output. Shocking.

 

[maxwellblue]

What happened to building zillions of houses then?

Just asking

Ange said that there was no shortage and there were loads of empty houses

 

[blueinsa]

Ange said that there was no shortage and there were loads of empty houses

Brilliant interview which started with her telling us how Labour would build all these desperately needed social homes and when asked if Immigrants would fill them, she suddenly decided they wouldn’t because there are “lots” of houses available lol

 

[Metal Biker]

Complains about a £20bn black hole left by the Tories.

Creates a £40bn black hole in one year.

Don't know whether to laugh or cry.

 

[metalblue]

Complains about a £20bn black hole left by the Tories.

Creates a £40bn black hole in one year.

Don't know whether to laugh or cry.

Inherited a £12bn black hole, immediately added £10bn to it (give or take). Raised taxes by £40bn to pay for it and now has a £40bn black hole on top and now we’re back to guessing what she’s going to do next budget just like last year. It’s a bit of a worry really.

 

[Metal Biker]

Inherited a £12bn black hole, immediately added £10bn to it (give or take). Raised taxes by £40bn to pay for it and now has a £40bn black hole on top and now we’re back to guessing what she’s going to do next budget just like last year. It’s a bit of a worry really.

It just renders hollow all their verbiage about the Tories when they first came in.

 

[bluethrunthru]

Complains about a £20bn black hole left by the Tories.

Creates a £40bn black hole in one year.

Don't know whether to laugh or cry.

You literally only had to scroll up a few posts ......

 

[blueinsa]

You literally only had to scroll up a few posts ......

Captain Deflection has arrived!