Is Rachel Reeves becoming the new Liz Truss?

[jazzer]

42 minutes ago, OutOfFocus said:

And shut down TfL while you are about it 🙂

No, no need to shut down tfl, just cut out the unnecessary and expensive beauracracy, simples. 

Sep, you don't even live here.

Edited July 24 by jazzer

[Sephiroth]

"Sep, you don't even live here."

 

???

[Spartacus]

Is it just me or does it feel like the governments romours, hints and leaks about what Reeves may do in the budget is spooking the horses? 

Reports in the media have hinted at  proposals to change council tax and stamp duty are causing the housing market to stall, the idea of changing the vat threshold is causing concern for small businesses and bank shares took.a hit as a tax hike is floated.

Whilst nothing is concrete till budget day, surly the fall out from rumours is doing a lot of harm to the economy and anxiety for a lot of people. 

It feels almost like we are being shown the worst case scenarios so when a bad one hits us we will all go, oh its not as bad as xyz would have been. 

Whilst there are always pre budget rumours, it does feel a lot like its out if control this time.

[alice]

National insurance for landlords? I’d  say over half of them are past retirement age

[malumbu]

They are putting out a few ideas to see what the general consensus is.  Whatever happens some will have issues.  We had decades of reduced tax burden but the world has changed.  I don't know the answer.

[Spartacus]

@malumbu I don't know the answer either but I do know that floating multiple ideas leads to uncertainty and spooks the economy. 

If they want to grow it, they should be more cautious about what they say as they are currently in danger of digging the financial black hole deeper as markets and investors will be wary. 

[vladi]

53 minutes ago, malumbu said:

They are putting out a few ideas to see what the general consensus is.  Whatever happens some will have issues.  We had decades of reduced tax burden but the world has changed.  I don't know the answer.

Floating a few ideas to gauge consensus indicates that there is no strategic plan.  It's just political dithering.

It represents a fundamental inability to recognise the fundamental structural  issues concerning the nations economy. In keeping with France, Germany and many other European countries, the UK's economic health is in decline. In the last two decades, much of government spending has been funded by debt. 

The cost of servicing that debt is currently running at around £95 billion and that is increasing steadily. It means we are living beyond our means. We are in a debt spiral. the government is funding a welfare state that has gone out of control.

We cannot continue to have a situation where millions here prefer to live off Universal Credit  plus other benefits. Some of them also earn additional untaxed income from the grey economy.

We have to reduce govt spending. It is the elephant in the room. There has to be cutbacks - no tinkering but real cutbacks  and austerity. Committing to austerity and  major cutbacks will reestablish credibility in the financial markets. This alone will reduce the cost of servicing the national debt. It's a virtual circle but it does need political courage not indecisiveness.

Stop rearranging the deck chairs on the Titanic.!

 

[malumbu]

Look at the national debt of the US.  It's ginormous.  The US spent their way out of the 1930s depression. Which is what the UK should have done rather than the Coalition's austerity.

Look at the harm and division austerity led to in the UK.

If only it was simple.

[vladi]

2 hours ago, malumbu said:

Look at the national debt of the US.  It's ginormous.  The US spent their way out of the 1930s depression. Which is what the UK should have done rather than the Coalition's austerity.

Look at the harm and division austerity led to in the UK.

If only it was simple.

First, the US Dollar is a reserve currency. Secondly, the 1930's depression was a 100 years ago and was caused by several factors including excess borrowing to fund stock market speculation.
When Harold Wilson had to go begging to the IMF to bail out the economy, the IMF lent the money but imposed various austerity measures.
If the UK has to go cap in hand to the IMF again, then rest assured the IMF will stipulate  changes which equate to austerity.   this is the IMF's standard terms. Just look at Argentina.

Take the pain to get the gain!

[jazzer]

We are already in a depression, not a recession. 

[vladi]

5 minutes ago, jazzer said:

We are already in a depression, not a recession. 

And that depression will get deeper if the cost of debt servicing increases.

Lack of clear fiscal strategy means uncertainty in the financial market. This results in markets demanding greater interest rates for new gilt sales. This in turn leads to increasing costs of debt servicing. Unless drastic austerity measures are taken , it becomes a doom loop.

Recovery cant be done with more taxes. Major spending cuts have to be made now. That means cuts of around £100 bn per year. Painful? Yes, most certainly, but absolutely necessary.

[malumbu]

You haven't addressed the impact of earlier austerity which led to a more divided nation.  

It's not the great depression, winter of discontent etc.

[Spartacus]

I sometimes wonder how deeper the financial £20 billion black hole would be if austerity didn't happen following big financial issues, including the banking crisis, covid and energy crisis (inflation)? 

 

 

[malumbu]

The Tories failed to invest when interest rates were very low.  Irrespective of the current management of the economy, the party that is supposed to know most about the economy, growth and improved standard of living, failed. 

[vladi]

49 minutes ago, Spartacus said:

I sometimes wonder how deeper the financial £20 billion black hole would be if austerity didn't happen following big financial issues, including the banking crisis, covid and energy crisis (inflation)? 

 

 

Covid certainly was a big factor in creating the debt burden however the Govt continues to expand the hole by giving crazy subsidies to suppliers of so-called "low carbon" electricity eg wind turbine farms, solar panels and worst of all - Drax power station.

According to the Renewable Energy Foundation, the UK currently spends around £25.8 billion per year on renewable electricity subsidies, covering both direct and indirect schemes.

Drax gets just shy of £1 billion a year to use import & burn wood pellets which are produced in a highly energy consumptive process. 

Wood pellets used by Drax  are produced through a multi-stage process that converts wood material into dense, energy-rich fuel. The raw material typically comes from, offcuts, and sawmill by-products rather than high-value timber. Logs are first collected from forests across the U.S. South and West Coast, ‘ At pellet plants, the wood is debarked and chipped into small pieces before being dried to reduce moisture content.

The drying process often uses waste wood as a heat source to improve efficiency and lower emissions. Once dried, the wood chips are milled into a fine powder, then compressed at high pressure through a die to form small cylindrical pellets, each around 6–8 mm in diameter. The natural lignin in the wood binds the pellets together, eliminating the need for chemical additives.

After production, pellets are cooled, screened to remove dust and fines, and stored in large silos. They are then loaded into trucks or railcars and transported across the United States from west to east to dedicated export terminals.. At these terminals, pellets are conveyed into covered storage domes or silos to protect them from moisture, since wet pellets can disintegrate and pose safety risks.

From there, bulk carriers transport the pellets across the Atlantic to the United Kingdom. Drax even had to develop specialized port and rail infrastructure to handle pellet imports , including large storage domes at  Immingham and direct rail links to its  power station.

It's no wonder wed have the highest energy costs in all of Europe!

[malumbu]

@vladi it would be good to hear your views on my comments (a) the damage to society of austerity and (b) how poorly the Tories handled our economy prior (and post if you like) Covid

Do you believe in climate change and if so what should we be doing?  I'd disgusted by Badenock aping Reform.

 

[vladi]

@malumbu as your questions would take us off topic on so many tangents, I will defer my response to a more appropriate thread.

[malumbu]

That's a cop out.  You are talking about managing the economy.  Previous regimes are relevant.  You are calling for austerity.  I have questioned this.  This is a forum not a soap box.  Although it feels more like the latter on some other threads 😕