We were told the new Chancellor had discovered a £22 bn black hole in the inherited budget. The Treasury officials who had prepared and signed off budget 24-25 decided a few months later it was £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 £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 £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. It’s 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. £22 billion is a rounding error on a £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
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
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.