Labour spending plans

It was always going to happen. They've spent years criticising the Tories for austerity and now they're doing it themselves. The Tories blamed it on the previous Labour overspending and now Labour are blaming it on the last Tory administration overspending. Its no wonder a lot of people see the two big parties as just two cheeks of the same backside!

As far as public sector payrises go, giving the Doctors 22% is a dangerous game when the poorest in society are not having the 2 child benefit cap lifted and a number of children who's parents can only just manage to pay their school fees are going to be going back into our overcrowded and underfunded state education sector once VAT is added to them.

It also looks bad to other public sector workers. How long before the teachers, firefighters and police officers start asking for much the same? They also pay a really important role for society after all so why are they not worth an extra 22%?

I thought all of this was entirely obvious and predictable, which is why under no circumstances was I prepared to vote for them.

The whole attack on private schools - not just the VAT, but the specific legislation to ensure no one can avoid by prepaying (which would be a temporary thing anyway so why care so much?) and the removal of charitable rates relief - reeks of a very straightforward case of class warfare.

Very old Labour.

And don't start me on the tax rises malarkey. Just because something was predictable doesn't make it less infuriating.

Envy is one of the most despicable human traits but it has no place in Politics.
You have to remember that this was a motion carried at the Labour conference where by definition you only get the extreme end of the party. Now who is the nasty party?

+1. The whole "oh woe, woe, thrice woe, it's far worse than we thought" claptrap really should not wash with anybody. It's like an obvious, bad joke that was visible in the script way ahead. Frankie Howard made good comedy out of that (Up Pompeii anybody?), but Reeves is no comedian. 

This current Labour government has policies that are attempting to repair problems that ceased to exist at least 2 decades ago, and in some cases 40 years ago. Since then it’s not poverty that has expanded but expectation.

Then there are their “socially correct” policies, such as green energy. Hilariously in the week after the UK stop new N Sea drilling licences Norway reportedly issued 19 new ones. The UK will help keep the vast Norwegian sovereign wealth fund afloat for three or four more generations.

House building is another problem they have. Unless the state fund it house builders are not going to destroy their own businesses by over supplying. And if the planned new housing is created the associated infrastructure elements should be mandated. But you’re not allowed a garage for a car; reopening rail lines has been kiboshed and the existing schools and hospitals need to be made fit for purpose before new ones are even considered.

That said make no mistake. Decades of government mismanagement by all sides are responsible for these issues but previously the vast majority were comfortable and safe. The point approaches where the latter is not the case and the current government has to address those issues because the environment will carry on changing despite government policy whereas only government policy can affect society.

I can't agree with that. VAT is value added tax. In other words, you buy something for £10 and sell it for £25, the Government get tax (VAT) on that uplift in value.

Neither education nor healthcare can be viewed as having monetary value added. Across the EU, where VAT originated, healthcare and education have always been exempt. You might argue that only the wealthy can afford them but they are basic human rights and the State cannot provide sufficient of either to meet the demand. Those who choose to pay for either are making it easier for the State to provide for everyone else. The reason that dental care is now predominantly private to some extent is because the State doesn't even reimburse the dentists the full purchase cost for things like dentures and they won't pay for better quality materials which would last longer and provide much better protection.

The addition of VAT to these items is just a jealous stab in the back with no consideration of how the State can afford to provide these services if people stop paying for them. Why does the State need to drag everything down to the lowest common denominator instead of pushing for everyone to achieve the best possible?

I still remember when the standard rate of VAT was "just" 8%. Why is the government unable to balance the books when it is now two and a half times what it was, and NI has increased significantly and we've had a whole load more taxes introduced?
(OK, bit of a rhetorical question).

Rishi's idea of paying millions of people 80% of their salary to sit around and do nothing for much of 2020 (and for some, a lot longer than that) was going to have to be funded from somewhere, so the current big hole that has been uncovered does not surprise me in the least

No government is ever going to tackle our problems until we confront the statistics that show us where we are. And the statistics explain our issues. Then maybe we can see how we solve them.

(1) Between 1970 and 2022, welfare, health and pensions have gone from 9.5% (1970) through 17.5% (2007 just before the financial crisis started) to now 22% (2023) of GCP. The "peace dividend" in reducing defence from 5% to 2% in that period does not cover that. www.icaew.com/insights/insights-specials/the-future-of-tax-and-public-spending/graphic-70-years-of-public-spending

(2) Since 2007 GDP per capita has been pretty flat (inflatin adjusted). GDP / capital is really the key measure of how "rich" a country is, not the pure GDP that politicians love to brag about. If you increase day to day government spending (social and welfare) rather than investing in infrastructure say, (as we have done) in a flat economy, well you arrive at where we are.

(3) The UK has a population density 270 people / km2. England is 420, Scotland is basically empty. I dread to think what the South East density is. Apart from the Netherlands (also 420) England is one of the most densely populated countries in Europe. In 1970 UK population density was 250.

Therefore in 50 years, we have chosen to spend vastly more on health, welfare and pensions, little on investment, while being no richer as a country, and getting way more over-crowded in the same period. So we have massive government debt, lack of sufficient housing, shit infrastructure, we're no better off.

I've been watching what Javier Milei has been doing in Argentina and whilst he might be mad, he might be a genius.

A couple of years ago I got an 8% pay increase with no change in working practices, followed by another 5% last year. What's your point?

The country will be completely broken if that happens.

I don't think anyone expects to see productivity in the public sector increase to the same effect that it would do in the private sector, and that private sector model is historically VERY Anglo-Saxon-US*. There should be no change in productivity in the public sector but by the same token there should be no reduction in the level and availability of service - particularly if (as that chart suggests) the non-public sector is improving productivity and therefore (one assumes) tax revenues.

*The historical model in Central Europe was of stability - for the present and the future. Stability meant maintaining the lives and standards of the workforce to maintain taxation levels for the state / society to improve the lot of the population. The requirement for rampant individual wealth was reserved for a very few and middle-earners were content with decent lifestyles and making sure their society thrived. The requirement now is that you must increase output year on year - even if there is no demand; even at the cost of quality and in most cases at the cost of your local workforce and their families. This can only be attained by reduced overheads and workforce costs so the manufacturing market is moved away from the consumer market or the manufacturing workforce is imported to work at a lower cost. That working at a lower cost means a lower social model which leads to ghettoisation in the countries of the consumer market.

The Germans had gastarbeiten because Germans were too well educated and then too "posh" to clean the streets, the drains, collect the bins etc. Then the model above kicked in and suddenly there weren't all these higher skilled jobs for Germans but suddenly the gastarbeiten were no longer just guests - they were allowed to stay and their children born in Germany were suddenly German (which they were not before). The UK, Holland, France, Belgium had all the same issues. The UK is likely the worst as it has limited industrial output and advantage compared to the others due to not having such a strong "industry is a fabric of society" mentality. So we have arrived at the point we are at where there are historically high taxation levels and historically low service provision and availability models because there is a significantly larger portion of society that are not net contributors.

To address the issue of service provision and availability is one that no political party could attempt without a raging majority and a particular social mentality. In the the first 2/3 of the Thatcher years we effectively got this and the demographic make up of the country was such that it was possible. The things holding the country's finances to ransom were ruthlessly dealt with and whereas non-British people you might meet will tell you of the strength of Thatcher (and don't forget other European countries were doing the same thing but it wasn't UK news in the 70s and 80s) the vast majority of the chattering classes have convinced society that a return to such ruthlessness is a very unpleasant thing that should never be endured again. Forgetting that the UK has never had any kind of ruthless regime in charge for a couple of centuries whereas Europe has. The UK now has a party with a large parliamentary majority but alas a different type of particular social mentality so they will never address the problem in a manner that will resolve it. The problem will get worse until there comes a regime that is very unpleasant and addresses it one way or another. We're currently half way to that unpleasantness.

Public poll commissioned by The Times apparently shows that a majority of those surveyed think that Labour is lying when they say they had no idea how bad things were.

And the Times' political sketchwriter, Tom Peck, nailed it for me earlier this week:

"That Starmer, Reeves and co have turned out to be shocked and appalled by the state of the public finances and now have no choice but to raise taxes in ways they honestly hadn't considered is about as convincing as the last guy's self-administered eye test along the A66.

Anyone who has an even passing admiration for Starmer can't possibly think badly enough of him to believe that this wasn't always the plan. He's just not that incompetent."

Yes, I have to avoid having this discussion with my wife, who is quite the lefty and got cross with me for refusing to vote Labour. She is all in favour of Starmer and of Labour taxing the rich more, so I get a complete flaming when I try to point out that she has a very different concept of what the word "rich" means to Labour.

For Labour, you are definitely rich if you earn enough to fall into the 45% income tax bracket (as both she and I do). Whereas she defines "rich" by reference to asset wealth, not income earned from work. I'm pretty sure she would tell you that if you need to have a mortgage on your house, you aren't rich.

I suspect she's in for a bit of a shock.

Both my brother's kids went to a very expensive private school in York but he's gone completely left wing over the last few years. I wonder if he'd be so in favour of VAT on the fees if he was still paying them? He even voted Jeremy Corbyn in 2019. It's ironic as I've always been completely against any form of educational apartheid. I'd ban all private or religious schools - no catholic, C of E, Jewish, Islamic either. Every kid would go to the their local school, none of this transporting them through the rush hour, contributing to pollution and congestion. Put them all in the one big melting pot within walking distance. Society would improve within a generation.