The new government solemnly promised that it would not make any important budget or fiscal announcement without a OBR report and forecast showing how it would be paid for. It condemned the Truss unfunded tax cuts though not her much larger unfunded spending rises made without a forecast. The tax Truss cuts were of course immediately cancelled and the Bank of England continued its erratic monetary squeeze disrupting bond markets.
We are living through announcements of large increases in public spending to pay a series of inflationary wage awards. There is no OBR forecast, no statement of how these will be paid for. The rail settlement brought a hopeless Transport Secretary onto the media to tell us she had no idea whether fares will be hiked or taxpayer subsidies increased to meet the bills. The government dropped the idea of offsetting some of the costs with productivity improvements from smarter and more flexible working.
Meanwhile we can always rely on the Bank of England to make things worse. They cut interest rates just as the government switched to an inflationary pay policy and just before the inflation index started to rise again. There has been no warning from the Bank about the dangers of large wage rises unmatched by improved productivity. I thought they were independent with the sole task of keeping inflation down. When might they do that?
August 17, 2024
Good morning.
Taxes, especially wealth taxes, will soon be rising. Look out for way above inflation council tax rises, especially from Mayor Khan as he looks to plug a massive hole in his finances.
How long before we have food riots, with the government, both past and present, bribing farmers to not grow food, we are going to have to import more at an ever greater cost.
But things will only get better once the people of this country are reduced to eating rats ! And I am serious on this. None of the LibLabCON Globalists have this nation and its peoples interests at heart. None of them !
August 17, 2024
What did you expect from an extreme left wing government. The pound will become the Rouble as we are forced to dramatically reduce our standard of living.
Reeves probably has the IMF on speed dial ready for when she needs bailing out.
Milipede is being allowed to ride roughshod over local councils offering massive guarantees for non windmill generation further impoverishing us the bill payer and making industry uncompetitive, just carrying on where the tories left off.
I see a massive growth in prison population as this is likely when the penny drops and people freeze or starve to death.
The only people warm and fed will be the dinghy dwellers and prisoners.
August 17, 2024
The current sentencing is politically motivated not judicially motivated based on offence and character of offender. We have even had a district judge surprised over charging a juvenile!
If only we had the same zeal to bring to justice MPs in 2009! 302 overpaid or fiddled expenses very few got investigated properly, let alone charged and sent to court!
Reply The minority that fiddled were prosecuted. Most were criticised for legal claims accepted by the authorities against accurate invoices
August 17, 2024
Reply to reply,
This would be MPs policing themselves! Rules written and approved by whom…MPs! How about the Star Chamber, the transparency disinfectant that Cameron promised? All those promises of right to recall etc. We still have the MP kangeroo court, you know, the one who presided over Johnson with a report written by Labour’s chief of staff. It simply does not wash JR.
August 17, 2024
If I may add we must also recognise that we have a Socialist/Marxist government. It will permanently, through its supporters in the civil service and almost all the nation’s other administration, punish any objection.
It will accuse and punish those who know how vital it is to try to preserve our ways, and support and defend those who object. The successful party and newcomers to our country have mutual aims.
August 17, 2024
And of course Mark, wealth and council tax rises have no impact on the working class – after all Starmer and Reeves stated time and time again “we will not increase taxes for the working classes”. Perhaps the ONS could report on the progress growing a magic money tree?
August 17, 2024
Council Tax will increase significantly because Labour are going to accommodate the criminal migrants in social housing spread around the country …. switching the cost from the Home Office (general taxation) onto Local Authorities.
You, me and every other householder will be paying to house these parasites.
August 17, 2024
@Mark B – mayor Khan has already said his bailout will come from central government, he knew he couldn’t afford the promises made to get elected
August 17, 2024
The trouble is these higher tax rates will not raise much or any money. If they do raise some in the short term they just kill growth and tax receipts for the years after that and you enter a doom loop. This especially as nearly all their other policies like Net Zero, open door low skilled immgration, more employment red tape are all suicidal.
I blame Cameron, May, Boris and Rishi (unequivocally safe Covid vaccines) Sunak and the Con Socialists. Excess deaths still running at 20% in many countries. This for failing to deliver anything of value in their 4 manifestos or of even trying to deliver it. Other than the green crap agenda which is totally mad, endless government waste, red tape, taxes highest for 70+ years, a botched Brexit and not the appalling two tier Kier and Stasi (let us kill free speech, call everyone far right, and have open door immigration) Starmer.
August 17, 2024
One thing is certain, any hope of the railways becoming a viable operation is out the window.
Those employed on the minimum wage in small businesses can calculate whether they will be better off unemployed – or will Reeves increase the unemployment/various-other-means-of-paying-people-who-don’t-work to match the minimum wage? Rationally she should! After all, it’s the minimum.
The faster the Labour government gets to the rational end of it’s irrational policy process, the more quickly we will be rid of it. They are worse than Truss – and that’s saying something.
There is still no voice from the opposition benches pointing out the lunacy of these policies – spending announcements by the Unions and nothing to do with the OBR – unless they are approving.
The BOE is consistent and always will be. Wrong wrong wrong.
August 17, 2024
There was nothing wrong with Truss as history will tell.
August 17, 2024
Naive narrative was her downfall.
Watch Kwarteng’s budget speech and hear how well it was received by Conservatives in the house with all the measures var one having been extensively trailed. Then recall how the post speech narrative was disastrously broadcast with further tax cuts highlighted rather than the short term nature of the support. And there was a huge amount of one off support.
August 17, 2024
You are absolutely correct.
She just did not believe the established orthodoxy created by left wing academics to counter the successful free market economics proposed by the right.
August 17, 2024
She picked the wrong man for chancellor. KK was clearly and is an intelligent man and close friend of Liz Truss. Unfortunately he was unknown outside of the Westminster village. Truss should have gone with Sir John as her Chancellor with KK given Home Secretary. That would have given the markets some confidence and rewarded KK for his support. It would also have helped bring a balance to the ethnic tensions we now suffer across the country.
August 17, 2024
There is no opposition from Tory party because they are one on policy. Just as we blogged before the election.
August 17, 2024
She was a bit clumsy and tripped on the economic bonfire set by Sunak who pissed billions down the drain and the dire BoE QE currency debaser.
August 17, 2024
Indeed. If they had kept Truss there is fair chance the Tories could have been re-elected. But the socialists didn’t see it that way. Lynn Atkinson should not believe the establishment”controlled media.
August 17, 2024
estabishment-controlled
August 18, 2024
Massively unfunded tax cuts, she herself stated at the Despatch box that she REFUSED to cut spending.
That is what was wrong with Truss. The economic panic set in as she sat down.
August 17, 2024
The “opposition” couldn’t even be bothered to fight for electoral victory ( of a sort)
It would not have been difficult.
August 17, 2024
I agree with your point about the lack of opposition voices in all this. The only conclusion anyone can come to is that the “Conservatives” are in complete agreement and comfortable with all the Labour policies and actions revealed so far, some of which are downright ugly.
August 18, 2024
Yep. The Tories would have been as bad as Starmer. Actually they were.
August 17, 2024
Sir John you are becoming almost as cynical as some of us! Perhaps despair is a more appropriate word.
August 17, 2024
Not surprising really; look at the direction of travel with this socialist government shown us in just a few weeks. How long before the nation is paralysed by strikes and riots. Will we still have power and groceries by Christmas?
August 17, 2024
@Peter Wood – Which socialist government? The one with power or the two shadows?
August 17, 2024
Plus the attacks on free speech. David Starkey has some excellent, but depressingly true, recent videos on Stasi two tier Starmer!
August 17, 2024
The Bank of England’s independance only runs to condeming and conspiring against any measures designed to boost growth in the economy. They are a component of the blob, working and conspiring against any government that goes for growth, witness that of Liz Truss.
Labour still carry the malign gene that en sures their guarantee of economic failure. Survey their history in government for confirmation. I might add that the consocialists in power were not much better last time around.
It will be your income and wealth that will be sacrificed to the point where current tax levels look desireable. Meanwhile a grossly inefficient none productive public sector will drive us into the arms of the IMF. Not to mention your freedom as members of a dying state. It is the gross incompetence of the faux conservative governments of Cameron, May, Johnson, and Sunak that have conspired to put us in this position, working directly against the will of the people as expressed in the referendum of 2016. The only positive glimmer is the growing swing towards Reform. May that realisation grow ever stronger.
August 17, 2024
+1. What the Tories did is unforgivable. They deserved a far greater battering than they got. They are never to be trusted again.
August 17, 2024
+1
August 17, 2024
Labour are rewarding their base, who voted for them at the election. The Tories reward their base after election wins with tax cuts for the rich – as Sunak and Hunt promised during their campaign.
The phrase “swings and roundabouts” comes to mind. Who cares, so long as you can get an appendectomy when you need one and the trains run on time
Reply The rich are not the Tory base. Conservatives started the move to tax the rich out of the country which Labour is now intensifying.
August 17, 2024
Another fact-free comment from SG. The Tories promised to lower NI contributions, reducing the tax burden on ordinary people, not the rich.
The Tory manifesto wasn’t bad, just a shame the man promising it had lost credibility. The voters didn’t care too much about policy promises, it seems, but more about the sort of people they were voting for. That’s where the Conservatives failed.
August 17, 2024
Same old Labour. Increase taxes on the productive part of the economy to pay unionised public sector workers ever more money. It is in a depressing way amusing that no sooner have rail and NHS workers been stuffed with large pay increases for no improvements in productivity they immediately announce more strikes. Why wouldn’t they, it’s worked after all? Obviously this is inflationary – as Sir John points out the groupthink blob at the BoE ought to be picking this up.
August 17, 2024
Tax cuts benefit all but benefit recipients.
August 17, 2024
The Tories have increase taxes on the rich, attacked landlords massively, kept IHT at just £325K for 15+ years, froze all the allowances, increase CT tax by 25%… increase stamp duty from 1% to 15%…
August 17, 2024
SG
I guess the Question is, who do you call the rich ?
Train drivers on £70,000per year.
Headmasters on over £100,000 per year.
Hospital consultants and GP’s on over £100,000 per year.
Those who have managed their standard tax rate income, but have managed to purchase, and paid for a house.
Who do you call the poor, those on the minimum wage rate.
All State pensioners who are on half the minimum wage.
Those on Benefits which are above the median wage income.
August 17, 2024
Sounds like our new government are just as incompetent as our last government. Who’d a thought it ………
August 17, 2024
So Reeves takes money off pensioners with an average income of £18,500 and gives it to the greedy train drivers who earn up to £65K for a job anybody could do. Is this levelling up?
August 17, 2024
Our family is a dual income family that contributes significantly with my taxes. Now that my youngest has left school I am even more of a net contributor.
I quite fancy being economically inactive but my savings, because I have been prudent and planned for the lean times having not been on a family holiday since 2020 nor had a new car in that time, mean I will not get any universal credit.
I am therefore calculating if early retirement and emmigrating to Malaysia or Thailand is financially feasible if my taxes rise further or my wages become worth less due to inflation and the spending power of the public sector.
One fewer whitey in the country and a reduction in the contributory tax base.
Seems to me that this is the “progressive’s” ultimate aim and they are succeeding.
August 17, 2024
I see the justification for the massive pay award to ASLEF was that it was cheaper than the cost of their strikes. Which is remarkable as that pay award has to be paid this year, next year, and every following year till doomsday. And of course it didn’t stop the strikes at all which are continuing till November in the dispute with the state-owned LNER.
I did wonder if after their interest rate cut whether the next move by the BoE would be to increase rates again. There’s a chance of that now.
August 17, 2024
Bank of England – Independent?
Thay are part of the Unelected Left of Centre University Educated Establishment who have been created by New Labour under Blair to run this country in the way they think is right without democratic involvement.
Our own microcosm of the European Project.
OBR – TICK
BoE – TICK
Civil Service – TICK
Judiciary – TICK
Climate Committee – TICK
August 17, 2024
At least the train drivers’ wage increase will assure us of smooth running, strike free train travel for the next few years…
August 17, 2024
“Meanwhile we can always rely on the Bank of England to make things worse…….I thought they were independent with the sole task of keeping inflation down. When might they do that?”
The actions of the BoE, and indeed of all government departments and quangos such as the OBR, Ofgem and all the other “Ofs” are better understood when it is realised the goals are Net Zero and DEI.
Net Zero is to destroy the economy and DEI to bring about an authoritarian communist state:
Diversity is to remove meritocracy and place only card-carrying members in positions of power. You will not find any engineers in decision making roles in the departments and organisations making decisions on Net Zero.
Equity is to remove private ownership.
Inclusivity is to remove free speech.
August 17, 2024
Labour’s putting us back on the 1970s the path to Stagflation.
I wonder when Two-Tier and Reeves will decide a Prices and Incomes Policy is a good idea?
And then call in the IMF?
Still, in order to Build Back Better, you first of all have to suffer the destructive phase ….. and that’s what Two-Tier is implementing, now Sunak’s disappeared off to California.
August 17, 2024
With £100bn a year spent on debt interest, take off the £50bn deficit and then the £20bn black hole they talked about, that would leave a £30bn surplus for those wage awards if they didn’t have to pay the interest on the debt they inherited from the Tories.
Is Labour going to get real on economics, or will they just continue the trend of borrow and waste?
I think I know the answer.
August 17, 2024
“The rail settlement brought a hopeless Transport Secretary onto the media to tell us she had no idea whether fares will be hiked or taxpayer subsidies increased to meet the bills.”
We’ve reached the stage with railways where the only solution is privatisation and competition and this can only be brought about by a complete change of technology.
We’ve seen this in the past with the dockers replaced by containerisation and the newspaper print workers replaced by computer printing technology.
Hence my belief that in the long-term most of the railways should be replaced by a tarmac road along which only licenced private vehicles can operate. In the short term we should install driverless trains.
August 17, 2024
Starmer is protecting muslims put British people in prison foreigners are making the country’s policies it won’t be long now before we sink into the sea, get your hand on one of those digies and fill it with food
Truss would have made a great job
she just tried to do too many good things to fast BUT the MP’S with their in fighting wanted sunak to be prime minister totally
unelected
August 17, 2024
When Count Dracula AKA Two Tier Kier the kneeler gained power with just 20.4% of the registered electorates support, did anyone imagine the Starmies would do anything other than give their paymasters the Unions, what ever was asked for?
The slight shock we are suffering, is we did not think they would rob OAPs of their winter warmth then use that money to gift idle train drivers a 15% pay increase. All done within the first six weeks of taking office. Now that requires a complete agreement among the civil service mandarins to make that happen.
Hey ho, you get what you vote for. Well if you are one of the 20.4% who voted Labour you do.
August 17, 2024
In aggregate, UK productivity has essentially stalled since the pandemic and it is unjustified that should be met with even more inflation-busting pay rises. For example, real-terms average weekly earnings are up 3.2% since December 2019. However, over the same period output per hour worked is up only 1.37%. By comparison, between Q2 1997 and Q4 2001 output per worker was up 12.25%. Incidentally, output per hour worked has essentially flatlined since the GFC. This lack of productivity is what needs to be addressed not rewarding it with even more unearned pay increases.
Reply Public sector productivity is still down by a massive 6.5% on pre Covid level, an extra cost of £30 bn to taxpayers. Even the Treasury admitted £20 bn.
August 17, 2024
Sir John
It was to be expected. The OBR was stacked with Labour acylates, so OBR forecasts were never to be applied to them despite the Chancellors new ruling.
We have the last Conservative Government to thank for this situation, they left the centre ground of conservative thinking and moved to the extreme left, tried to out do Labour. Lets not forget it was Sunak/Hunt that caused the massive inflationary increases in the first place by removing vast amounts of money from the economy. Which is why all the continuity leadership candidates for the leadership of the Party will be the next big Conservative Party mistake. More of the same is more UniParty, more Labour thinking, more failure
August 17, 2024
This is a case of labour rewarding their supporters, nothing more.
In any case socialists heartily believe in robbing the middle classes to increase the size of the state for no good reason, and for no good that it will do in running the country.
Since when have politicians told us the truth about their motivations or even kept promises made in the heat of elections?
We all know we are economically up a gum tree, just like America and Europe is, and labour are making sure we do not recover from this.
What worries me more is the biased justice being dished out to those protesting oppression by HMG. The country is not just broken economically, State morals have been shot to hell.
August 17, 2024
When the pensioners have been destroyed, all on benefits or dead. When those with money have left the country where does this Labour Party get its money from? Must be all those Labour supporters that thought that government had money and it didn’t come from them.
August 17, 2024
I rather fookishly thought that Labour had learned lessons during 14 years in opposition.
How foolish a thought that was !
Brown’s ridiculously over-generous early settlement of the NHS pay round when he was Chancellor established the high benchmark just used so effectively by the junior doctors.
Now we have the train drivers being offered a £9,000 increase on their existing £60,000 4 day week, with no productivity requirements to do away with their expenive and extensive Spanish practices.
With ASLEF now embarking on a fresh round of strikes, it beggars the question, why was there not a demand for a no strike arrangement for the duration of the pay deal?
Starmer and Reeves will now be widely recognised as a soft touch and the public finances will suffer badly. Who will be next ? My bet is on the Fire Brigades Union followed quickly by all the unions representing staff at Transport For London. A long line of other public sector workers will also be jostling for their position at the troff. Ridiculous.
August 17, 2024
So the party of the public sector parasite, the welfare scrouger and the bogus asylum seeker is true to form then, saving only now we can add convict’s friend.
Where are the official Opposition spokespeople in all this?
August 17, 2024
As always, with a Labour Government, it will end in disaster. The only surprise is that I thought it would take a year or two to mess things up, and they have done it in six weeks.
Where there is no vision, the people perish. It seems Labour’s lack of vision has had consequences in weeks, where it took the Conservatives lack of vision 2 to 3 years to show how hopeless they were. They blew an 80-seat majority without achieving anything significant, except a botched Brexit. I think Labour will blow their current majority in months rather than years. The choice of a new Conservative Leader becomes more important by the week. A new, proper Conservative leader has to be prepared to undo the damage Labour has and will do to the UK, and take really tough decisions to stave off imminent bankruptcy. Because Labour will bankrupt us, that is guaranteed!
August 17, 2024
If they don’t get civil servants and the rest of the public sector workers back into the office doing a proper week’s work we will see inflation kick in very shortly and that will result in the 1970s again. I suggest the younger element who read your blog look up history lessons on the 1970s right through to the 1990s when some of us suffered high mortgage rates (17% for me at one state) and high inflation of over 20%. Then they can regret at leisure if they have voted Labour this time around. You can be sure they won’t next time if they have any sense. I remember people round me doing a moonlight flit in the night when they could not pay their mortgages and they were professional people so be warned. Get saving now and forget the holidays and extra kids you want to breed. You won’t have any money for leisure time pursuits.
August 17, 2024
It’s ironic that this Labour lot and their friends in the BoE and the OBR condemned Liz Truss’ budget for providing unfunded tax cuts for the workers, only for the new Labour Chancellor to do very similar with the public sector pay rises, which are also unfunded. So that’s OK then?
Such is the hypocritical status quo with this Government and after just 40 days in office, ‘Do as we say, never as we do’ – The standard MO for socialism everywhere.
They successfully had true blue Tory, Liz Truss, removed after just 45 days but I suppose we won’t be seeing this disastrous new PM and his new equally bad Chancellor resigning anytime soon, because they are socialists who will obviously always be immune and excused for such despicable and underhand tactics? Such is the favouritism proffered to the Left these days. This has to stop before we rot.
August 17, 2024
As I said last week, you need inflation for a GDP debt economy so you can borrow more and have choosen public pay rises to start with and cut all the tax tit bits to pay for it like heating allowance but the main point is that GDP is up and you can borrow more, say that were not paying back the treasury then your GDP would be down and your debt per-centage would over 100% of GDP to debt.