We were told the new Chancellor had discovered a Ā£22 bn black hole in the inherited budget. The Treasury officials who had prepared and signed off budget 24-25 Ā decided a few months later it was Ā£22 bn short. Over half of that alleged shortfall was the new government decision to offer higher wage awards to a range of public sector workers without securing any compensating productivity improvements. The last government had for example been seeking material improvements in rail productivity before settling the drivers dispute.
Now we read in briefings to the press and BBC that the Chancellor thinks she has a black hole of Ā£40 bn. That is a very rapid rise in two months. It appears she wants to make a series of previously unfunded increases in spending . This has led her to scramble around to find offsetting tax rises to pay for them.
In other words Labour misled us badly with three tax rises stated before the election to pay for three specific items of spending, when they planned something much larger. Taking the extra Ā£18 bn is an increase in spending and taxing more than three times the one put forward for the election.
Labour says this is to stave off austerity. They have a very strange definition of austerity. Apparently austerity is having some areas of public spending that do not get a real terms increase. Most people think austerity is tax rises and real pay cuts for themselves. Itās finding the pay runs out before all the family bills are paid. The public sector has had a large increase in staff and money in recent years. The issue government should be wrestling with is how to boost productivity and improve service, so employees can get increases in real pay and taxpayers get a better deal.
October 17, 2024
Does anyone really believe the nonesense coming from this government. Ā£22 billion is a rounding error on a Ā£trillion economy.
Carrying on from the last government it’s spend, spend spend and waste, waste waste.
Every time the PM or Chancellor opens their mouths they damage the economy.
Despite the inflation busting rises, the public sector are still striking.
We have another 56 months of this nonesense by which time we will be well and truly screwed.
Let’s hope this is the final hurrah for the uniparty.
October 17, 2024
Ian, It’s OK. A lot of the extra money isn’t for spending, they will “invest” it. Sounds like they are off to the bookies.
October 17, 2024
“Well and truly screwed” accurately describes the UK tax payer’s predicament. But we do not have to wait 56 months. We will all be screwed, again, on 30 October.
October 17, 2024
IW :
Agreed.
October 17, 2024
Just ditching the total insanity of rip off intermittent energy and net zero will save well over Ā£100 billion a year in extra growth and by increasing the tax base. But 90% of MPs, Miliband, Starmer, May, Sunakā¦and all Tory leadership contenders are hooked on this absurd hugely harmful & anti-scientific religion.
October 17, 2024
An excellent spot on The Sceptic podcast on the destruction of the old Britain by Blair and Brown with David Starkey.
October 17, 2024
Good morning
So it is OK for this government to make unfunded increases in spending but not that of Liz Truss ?
A Two Tier Government.
The excuses, which will not be challenged by the Opposition, are just cover to do the things they want to do rather than need to do. ie Please their union overlords.
Back to the 70’s we go.
October 17, 2024
‘The excuses, which will not be challenged by the Opposition, are just cover to do the things they want to do rather than need to do’. You are right; the excuses are never challenged. I have lost count of the number of times the current Government has mentioned the Ā£22bn black hole (in interviews on TV and radio, and at PMQs). The Opposition has not once said ‘go on, prove it. Sbow us’. Why is the Government never challenged and why is it not reminded of the massive black hole left by the last Labour governent? Why is this Government never challenged on the amount of money it seems to have available for ‘net zero’, for foreign aid, for accommodation for illegal migrants, for over-the-top pay rises, and so on? Is it because both parties are on the same page and not on the side of Britain or its people?
October 17, 2024
Because they’re batting for the same WEF/Globalist Team.
October 17, 2024
An Opposition, oh goody, I didn’t think there was one!
October 17, 2024
There is only one thing that will decide whether Reeves is the new Truss and that is the bond market. It is already worried as UK 10 year gilts have risen to 4.1% which is a relative rise of about 10% since the election. This is higher than Germany (2.2%) and embarrassingly also higher than Greece (3.8%) so Reeves may find she simply can’t borrow the amount she was hoping for at the rates she wanted.
On tax we must be close to the overall tax Laffer curve maximum where any further increases reduce the tax take – for example increasing employers NI only increases revenue if they continue to employ the same number of people rather than investing in automation and AI to increase productivity and reduce staff numbers at which point employee NI and income tax are lost too.
October 17, 2024
Roy,
On Laffer, I think we are already & have been for some time on the back side of the curve and well down the slippery slope…
October 17, 2024
Yes, this labour government is heading down a financial black hole of its own making. It is dishonest because they had sight of the treasury data before the election, as is normal practice. Generally this diary was not happy with the previous governments recovery plans. However figures on inflation and growth of the economy are currently showing that Hunt was heading in the right direction, even though he was slow on growth incentives via tax reduction. I am pesimistic as to it lasting.
Socialisn is still buried in class warfare and incompetence. Who in their right mind hits vulnerable pensioners when making heating allowance a taxable form of income for higher rate tax payers is an easy solution. All while you pay your union brothers OTT while demanding nothing re productivity in return. All done while still paying out a scandalous sum in overseas aid and the mad mullah’s largesse for the overseas pursuit of Nett Zero. This bunch of class chancers have no economic recovery plan and absolutely no ability to carry one out. They are heading for the buffers and lack the intelligence to realise it.
Just to ice the cake of socialism we now read that 20% of welsh children are leaving early educacion as illiterates. A damning indightment of a welsh labour government , wholely responsible for education in Wales. I wonder what Nye Bevan and Dylan Thomas would make of such an accolade. Every indication is that it
is socialism’s plan for english education too. A ride to the bottom.
There you have it fellow diarists, strap yoursekves in for a very bumpy ride and no cabin service.
October 17, 2024
Perhaps they should concentrate on teaching them to read and write English properly before trying to ram the relatively useless Welsh language down their throats? We used to take holidays in different parts of mainly North Wales back in the seventies. Rarely did we ever hear anyone speaking Welsh. Blairās appalling & botched anti-English devolution was a disaster for both Wales and Scotland with Welsh and Scottish Labour, Plaid and the SNP.
See David Starkeyās excellent latest video.
October 17, 2024
Good interview by Kemi on Talk Radio just now. A peerage for J K Rowling yes please.
She almost sounded like a climate realist who want to ditch net zero. Hard to come out as that when most of her deluded LibDim MPs are hooked on the deluded Net Zero religion.
The usually fairly sound Mogg (Jenrickās choice for Chairman) last might on GB News said that he thought Sunak was āa very decent, honourable & patriotic manā. No Mogg not at all, he as Chancellor (with the dire BoE) caused all the economic problems with lockdowns/QE and vast waste and then blamed them all on Truss. He plotted against Boris and Truss to become PM, in an insane act the threw in the towel six months early – thus predictable handing the appalling Starmer a disastrous & huge majority.
Worst of all he lied to the house that the Covid Vaccines (still being pushed) are/were certainly safe when (unless he is a completely ignorant idiot) he must know this is totally untrue. The stats from all around the world are very damning indeed.
Reply Kemi as Business Secretary turned down my proposals to get the excessive taxes and charges on U.K. industrial energy down to save more of our energy using industries like steel and petrochemical.
October 17, 2024
Sunak also, obviously must have approved of kicking Andrew Bridgen out of the party for the crime of merely telling the obvious truth.
October 17, 2024
Neither of the two would be leader are fully sound on the Net Zero Climate Alarmist scam. Is Jenrick genuine in his damascene conversion? Can JR assure us of this? After the vast dishonesty of Cameron, May, Boris, Sunak for 12 yearsā¦why trust Jenrick?
Reply Yes I think Robert is sincere in rethinking his views.
October 17, 2024
Looks to me like it will be Kemi she is firm favourite. I will watch their GBNews Debate this PM.
October 17, 2024
Come on, pull the other one. He was omnipresent in being in charge of letting in more small boats than ever before. Oh and that planning issue.
October 17, 2024
Sir John,
That’s a shame, if she does end up as leader of the Conservatives hopefully she will be more open to advice from yourself et al – fingers crossed…
Reply I doubt that
October 17, 2024
Patriotic? to which country?
October 17, 2024
As a 16 year old in Snowdonia climbing with a school friend we had to visit a local store/post office. The local customers spoke English until they realised we were not welsh , quickly then reverting to
Welsh. We countered by chatting in French. If they were slow in getting the message we reverted to our own unique version of Mandarin. All very childish, but our way of returning their hospitality. Ultimately our choice was to climb in the Lakes, Skye , and Glencoe.
October 18, 2024
I rather preferred the Lakes or Yorkshire Dales trips too.
October 17, 2024
A small anecdote with regards Welsh Education from a recent visit to North Wales. Standing in a cafe queue with my wife and myself was a small boy and his Grandfather. The lad was about four or five years old and had a new ‘Hotwheels’ car (still in the box) that he was holding tightly. Seeing me look at the car, the boy grinned, clearly very pleased with it. Remembering buying my own grandson the something thing, I smiled back and asked him if Grandad had brought it for him. He looked at me a bit blankly and turned to his Grandfather. The man explained that the boy didn’t speak much English, just Welsh.
I understand why the Welsh want to keep their national identity alive within a United Kingdom (I’d like to see the English demand the same) but I do wonder at the practical impact of the Welsh language sometimes
October 18, 2024
Indeed, do they really want to life in an I speak Welsh only bubble?
October 17, 2024
and no ‘comfort breaks’!
October 17, 2024
The media go along with the “black hole” sound bite. It helps Labour. As you imply, “unfunded spending” is more accurate.
It’s like me saying I’ve unexpectedly found a “black hole” in my finances, ever since I decided to forgo work and take a luxury cruise around the world.
October 17, 2024
My advice to the Chancellor is “when you are in a black hole stop digging”… Does anyone still belive this trotted out rhetoric any more?
October 17, 2024
All the while, using a euphemism which by definition, suggests its a place from which it is impossible to escape.
October 17, 2024
They’ve hosed money at their client state in the Public Sector and Trade Unions.
They’ve imported, in 3 months, more criminal migrants than the Not-a-Conservative-Party did in the previous 6 and are now re-commissioning hotel accommodation that had lapsed.
They’re on a mission to break up England with yet another expensive tier of governance …. regional devolution which the English have not voted for …. providing more taxpayer-funded jobs for the political guys n gals and their legions of bureaucrats.
And they’re destroying our security, energy supply and jobs with the Net Zero lunacy.
The bit in the WEF’s plan about “you owning nothing” is coming along very nicely indeed.
October 17, 2024
England needs a modern day Oliver Cromwell, urgently.
England must be re-established and those who in the many ways are subverting us removed. This includes all figures who operate in and defend the present administrative British establishment which holds us imprisoned.
October 17, 2024
Still the quaint belief from our host that elected politicians can be expected to decide on policy directions. Despite all the evidence against, especially the Liz Truss episode. The way it seems to me, improving productivity would mean less demand for cheap labour, and therefore less migration. That’s not the policy direction set for this country by the outside interests who are ruling it.
October 17, 2024
Chancellor Reeves’s budget speech will very likely present Mr. Sunak with the opportunity of a devasting reply, perhaps setting the framework to critque her efforts for her entire time in office. Is he working on that, do we know?
October 17, 2024
How fortunate for Ali Baba and her forty redistributive thieves that she doesn’t have to pay Ā£600 for gas and electricity bills to each household and giveaway a further Ā£1,000 to protected benefit claimants as part of her budget. The Bank of England should not cause a run on her government’s lending ability by their post budget actions.
Had the Kwasi Kwarteng budget and radical personal responsibility and growth measures advocated by Liz Truss been given a chance we would most likely be in a much stronger position today.
As it is we have a government that believes that our cash is their cash and belongs to public sector unions, foreigners, net zero zealots and benefit claimants. What could possibly go wrong.
October 17, 2024
Should say borrowing ability rather than lending ability
October 17, 2024
Who will lend money to this bunch of incompetents?
October 18, 2024
They will just print it and lend it to themselves,pretending they will pay it back at some time in the long distance future.
October 17, 2024
So what you’re saying is a political party seeking election to government. Told us one load of nonsense. Then when in power tells us another load of nonsense.
Who’d a’thought it ……………..
October 17, 2024
Sir John
This week we have also read that Rachel Reeves faces an extra Ā£100m state pension bill following revised official figures and that according to Government is Big a problem.
It is also noted that with the UKās public sector pensions bill Chancellor Rachel Reeves will have to find more than Ā£900m to pay existing retirees next year, with the long-term cost reaching almost Ā£20bn – that is not seen as a problem.
We mustn’t loose sight of the fact Labour is mimicking Sunak and Hunt, they forced up costs, inflation etc to create a problem so that at a later date when they would naturally fall they could say(and they did say) what a good job they had done. As despicable these ideological zealots are they had been handed the tools by fools that lost the plot.
We no longer get the politicians we deserve, to much vested interest overriding democracy.
October 17, 2024
Deceit and misinformation from labour – Oh what a surprise.
Labour assumed power by default, not because we voted for them, and now they are in a position to do and tell us anything they like. Their election manifesto was subdued because they didn’t want to worry us with what they really intended – Poverty through even higher taxation and deaths through too expensive energy!
This is on top of ruinously expensive and insane netzero projects, but what else were they hiding from us?
We simply do not believe that the Chancellor has suddenly found these so called black holes in the budget. Labour have never been economically competent. The lies are an effort to justify ruining the average family financially with excessive taxation when a clown could balance the books.
What other plans were not in the manifesto?
Devolution is under way and we will soon see a parliament that has little power because all important decisions will be taken by regional authorities, while the political structure will be changed to mirror the EU.
What other actions is Starmer planning to make it easier for us to slip under EU control once again?
If we thought the Tories were bad for us, it seems there will be no comparison with them and what labour and their treachery will sink.
October 17, 2024
Is it incompetence, financial and management Ignorance, political Dogma, or simply a combination of all three ?
October 17, 2024
The Labour Party is now unashamedly the Party of the Public Sector.
When they say they are preventing austerity they are referring specifically to the people employed in the Public Sector, their people and the only people they care about, ‘their people’.
They have no idea what damage they are about to introduce to the Nation. In fact it could be argued they do not care about the Nation. They would be happy to remove the idea of Nation from public consciousness.
They are so attached to the concept of Global institutions and international obligations, they think the old fashioned idea of individual Nations should be consigned to history.
More uncontrolled migration anyone?
October 17, 2024
RE : āMore uncontrolled migration anyone?ā
Itās not simply the uncontrolled numbers of both legal and illegal immigrants itās also the low qualifications and the alien cultures of these immigrants that the Uniparty are determined to bring into the country. Now why would they want to do that?
October 18, 2024
Why? Because that’s what they’re being told to do.
October 17, 2024
There are never explanations given as to the breakdown of the Ā£22bn black hole apparently left by the Conservatives and now the Ā£40+ billion under Labour.This money has been spent but on what? Certainly not on repairing roads or improving the quality of the NHS, etc.
Rather than give the Chagos Islands away could we not have asked for some money to fill our black holes.
Why are we continuing to fund a white elephant in the form of HS2.
We should be looking at saving money by properly managing the NHS ,police forces, Councils and other public bodies.
Can we release more space in our gaols, not by releasing hardened criminals early but asking ourselves why we are housing foreign war criminals at Parkhurst like Radavan Karadich for the next 30 years.
Saving never seems to be in the vocabulary of politicians;it’s all about taxing and spending.
Where has the Ā£9 billion gone that used to be paid to the EU annually as the UK’s contribution.Is that part of the Ā£40 billion or is the black hole really Ā£49 billion from which we deduct our Ā£9 billion a year EU saving.
Why are people of the UK better off to the tune of Ā£1200/year by not working;
Something is very wrong with our society and it will take a lot more than Keir Starmer and a Labour Government to put it right.
Reply
The government did issue a document setting out the Ā£22 bn. Half of it is pay awards above inflation in excess of the budget allowance. Ā£6.4 bn is additional asylum seeker and illegal migrants costs .
October 17, 2024
Surely a number of senior appointments and Civil Servants ought to be sacked for not openly saying what a fine mess Sunak got us into if that ‘black hole ‘ is true?
Methinks a rather late excuse for the dreadful policies spewing out.
October 17, 2024
Every one sees it,
Allister Heath – Reevesās web of lies can no longer conceal her dystopian plan for Britain. The game is up. Labourās tax increases could be the largest on record, shattering their manifesto pledges
The very idea of a āblack holeā has become tautological: it is now defined as whatever Reeves wants to spend extra and that she cannot borrow.
From the Telegraph https://www.telegraph.co.uk/news/2024/10/16/reeves-lies-can-no-longer-conceal-dystopian-plan/
October 17, 2024
Perhaps – as the black hole is FAR deeper than expected – the train driver pay rise could be postponed. I’m sure those patriotic chaps would understand.
October 17, 2024
” Perhaps ā as the black hole is FAR deeper than expected ā the train driver pay rise could be postponed. Iām sure those patriotic chaps would understand”
So you think you can convince them its just a tunnel…
October 17, 2024
Red faces forecast for this Labour motley crew as they lead us into the Red Sector on all fronts by their headstrong (know it all) wrong socialist attempts to pull the levers of power whilst trying to pull the wool over our eyes, (redefining Debt, redefining GDP, redefining Illegal immigration etc).
October 17, 2024
Sir John, it is rather important in the context of this argument about the 22bn ‘hole’ to learn what made the Treasury identify it and revise its figures for the 2024-25 government spending budget (on 30 July, was it not?)
According to info I find on the web, it seems the reasons the Treasury gave were ‘unfunded spending commitments by the previous government, including for the asylum system, health, rail services, and aid to Ukraine.’ Is this the reason Sunak hastened to call an election, before this info (if its is indeed an honest claim by the Treasury) was published?
Having been newly informed of this spending gap, it seems suicidal of the Chancellor to have then rushed (in August and September) to make massive awards to the public sector, with (as you say) no productivity agreements. The whole thing gives the unavoidable impression that Labour has the direct *purpose* of massively raising taxes. on everyone except unionised, :abour-voting employees
And why do the Tories (who contain many recent Treasury ministers) not counter this in Parliament?
Reply No, public spending was not the reason for the early election. The Conservatives would not have conceded the large pay awards and did have plans to get productivity back up so had no reason to identify tge Ā£11 bn of extra pay Labour put in their black hole figures. There was an overrun on migrants but that was covered by the Contingency provision. Labour have increased migrant spend with end of Rwanda deterrent.
October 18, 2024
The 9600 millionaires who have left the UK last year is going to look like a drible by comparison with what we can expect over the next couple of years.
October 19, 2024
I already see signs of people not spending and waiting to see what Reeves comes up with at end of the month. You can bet it will be nothing to help working people or pensioners who she sees as ‘cash cows’. Go back to the 1970s and see how they ruled then and you will see what awaits us. Haven’t got a clue and I wonder how we have these sproggs born from the last lot who impoverished us.