When I listen to the PM and Chancellor I want to remind them they are trying to steer or improve a £2600 million economy. All we hear from them as they seek to find an alleged £22 bn is items involving £1 bn or £2 bn. These are scarcely rounding errors in the national accounts. If they want to make a difference they need to be moving and finding tens of billions as £26 bn is just 1% of the total.
The big idea to get faster growth bears a resemblance to the previous governments policy, with the injection of a faster pace and less realism. It is to generate green jobs through decarbonising energy in a hurry. This entails writing off much of our fossil fuel driven economy before it is worn out, making net growth difficult to achieve. The £3 bn a year of state investment through the National Wealth Fund and Great British Energy is tiny in relation to the total investment of well over £200 bn it would take to decarbonise electricity generation and to replace the nuclear power stations about to close through old age. It is not a lot more than the previous government was spending through U.K. Infrastructure Bank and the British Business Bank. It is an expensive new pair of letterheads and brass plates and more management overheads.
They invented a £22 bn black hole as a political slogan to seek to bury a Conservative Party that had been badly wounded by a disastrous election defeat. They do not deny that £11 bn of it is their very own inflation busting no productivity gains awards to public sector employees. They do not set out how many underspends or over provisions they also inherited. Without the detail why should we believe them?
There is a rule emerging. Every spending cut or tax rise they want to make can disappear as it hits reality. Taking fuel payments away from most pensioners is meant to save a modest £1.3 bn. Now they are energetically trying to get more pensioners signed up for Pensioner Credit. If 400,000 do so there is not net saving from the change.
They told us they could get £1 bn more from taxing Non Dom’s more. As the rich head for the exit it is quite likely there will be no net Non Dom gains. Meanwhile a lot of money that would otherwise fund businesses, employ people and lead to shop and VAT revenues will have gone elsewhere. There could be an overall loss.
They look to VAT on school fees to bring in another £1.4 bn. They now face a court case claiming VAT on school fees violates the very Hunan Rights laws Labour normally reveres. They could lose the case. Meanwhile they need to offset against the extra tax the costs of more pupils taking state school places when their parents can’t afford the fees. Those parents who do dig deeper to pay may then not be paying so much VAT on other things they would have bought if the school fees cost them less. The schools will of course be able to reclaim the VAT they pay on inputs which also reduces the gains by a Treasury estimated one quarter.
The extra oil and gas windfall tax helps kill off extra investment and production from the North Sea. Aiming to raise maybe an extra £500 million it is along with the end of new licences likely to mean a fall in revenue. At a combined tax rate of 78% who is going to want to take the risks of anything new?
September 28, 2024
Everything is going to plan. Net zero is intended to bankrupt us and 2TK is gleefully continuing the devastation started by the tories.
On Monday our last perfectly good coal fired power station will close with nothing to replace it. That is 1.5gw of dependable, despatchable energy never to be seen again.
We are heading full speed towards power cuts and rationing whilst the government is trying to force EVs and heat pumps on us.
New cars are being rationed which reduces the tax take for the treasury. In fact everything Thieves does will potentially reduce the tax take.
It’s almost as if it’s deliberate.
September 28, 2024
IW,
It is a script meeting for 1984.
September 28, 2024
You should also consider an alternative explanation: another lot of even bigger chumps than the last lot are now in charge of the UK. Either explanation will still result in the descent of the UK to third world status. I suspect the Labour government contains a mix of both the doctrinaire and the dumb.
September 28, 2024
When younger people see their national government is incapable of running the country, what do they do and who do they look to? Perhaps put their faith in a global body that looks to be more citizen-friendly, such as the World Citizen Club or the Global Citizen Community, or if they’re in business join the WEF and become a Young Global Leader. It isn’t hard to see the direction of travel intended by those who are wrecking this country. As many others have pointed out, to ‘build back better’, you first need to pull down what was there to start with. That’s the nation-state. Its enemies are working within it to destroy it.
September 28, 2024
Indeed net zero is lunacy, we have electricity and gas bill that are up to four times those in the USA yet we are expected to compete?
Taking fuel payments away from most pensioners is meant to save a modest £1.3 bn. Well a bit more as Labour suggests it will kill 4000 of the. early (each year I assume) so more then saved on state pensions I suppose.
VAT on school fees is the complete reverse of what is needed for better education and to save money you want more to pay for their education and more private schools not fewer. Save for education. We need tax breaks for those who elect to go privately.
Every policy pushed by Labour, with the sole exception of relaxing planning, is anti-growth. Net zero, more employment and other red tape, VAT on school fees, Non Dom abolition, the mad energy policy, car market rigging, boiler market, transport market rigging, education rigging, healthcare rigging, every more state, the war on Landlords and the self employed, every higher taxes, the war on free speech…
September 28, 2024
LL,
What you highlight is the detail, the result of totally negatve government thinking, indicating that they have never worked at the coalface and do not understand human nature. Under such stewardship the UK has no future.
September 28, 2024
Getting the deficit down is undermining the Chancellor because the methods chosen are puny, political, and ill conceived. The product of socialist thinking, unrelated to reality.
As I understand it, the deficit is the difference between what the country earns and what it spends. Government must therefore assist the boosting of earnings by the reduction of taxation and the removal of regulatory restriction. Initially this might reduce government income, but ultimately considerably increase it via vastly increased commercial activity. Our old friend the Laffer Curve. The second thing they must do is markedly reduce government spending, while at the same time subject what they are left doing to very much higher productivity demands.
The problem and its solution is very much in government hands. I doubt it will happen becauss for many years political philosophy has take precedence over practicality. To practicality has been added complete zealotry, like Nett Zero, so ensuring its early demise. It has become the assylum run by the inmates. The whole business of government requires rehab and a reset. I do not see the present lot or for that matter their clone like predecessors ever achieving it, as they are the inmates. I await Reform, the only party to have suggested that they understand the problem and to have viable solutions.
September 28, 2024
Articulated what we already know that it is incoherent , lacking in strategy and mostly counterproductive
September 28, 2024
As I have told a few friends Reeves is like a person who goes to her bank manager and asks ”may I borrow £90?”
”What for?”, asks her bank manager. ”I want to create my own my own personal ‘wealth fund”’, says Reeves.
Put that way , it is of course ridiculous, but scaled down from the national economy to somebody’s personal income, that is what it amounts to! – and she claims to be an economist and Labour’s economic expert! No wonder she and Labour are economically incompetent and hopeless!
September 28, 2024
How many MPs or government Minsters have actually had any business experience where their own money has been at risk.
Very, very few, hence the reason we are getting stupid ideas, thoughts, proposals, and policies, and few in Parliament seem to question any of it with some even basic questions.
September 28, 2024
She’s falling down a Black Hole.
September 28, 2024
They’re not working in the interests of the UK, any more than the other branch of the Westminster Uni-Party was. It is all going to the UN/WEF’s plan.
The UN intends to “level down” the west by destroying its historical manufacturing advantage and the WEF intends to appropriate any wealth “the peasants” may have accrued through command and control social engineering policies, which will keep them obedient while they impoverish them.
If you believe their objective is to improve the lives of British people, none of it makes any sense. If, however, you believe their intention is to systematically weaken the UK, in order to deliver a global, corporatist “utopia,” it does.
Two-Tier and his regime are just puppeticians. The people calling the shots are completely immune from any kind of democratic control.