The Blame Game

 

There's a huge amount in the media about Rachel Reeves and her upcoming Budget or more accurately how she can frame any Budget in the current economic, fiscal, and political environment. 

How can a party with a massive Parliamentary majority be so hemmed in. "Events dear boy" to quote MacMillian. Much of this is Labour's own disastrous policy decisions. A lot is due to Labour's initial message to the British people which was things are not good, and it'll take time to sort things out. 

Did they sort things out? With a significant fiscal deficit - they scrapped the Winter Bonus for pension - not huge savings - but massive political damage. Benefit reform - rationalise, cut the ballooning benefits bill - introduced and withdrawn because of Labour Party MP's worries.

By promising the Earth - no tax increases on working people - they weighed tax increases on working people, by increasing employer NI contribution. The effect has been not good. People aren't stupid - except when they vote. They see that jobs are fewer, prices increase, and this is just a cynical way to finesse Labour promise.

Increase spending on the health service. People see what is the state of the NHS - because they use it. Voters wonder why throw money at it without any increase in quality, efficiency, reach. If anything under Labour and their largesse, service has got worse.

Don't talk about local authority finance and how it's under water because of huge inefficiency, huge increase in "woke" services, both.

GDP in this country has increased. Harrah. Except that's not because we're more efficient in producing stuff, but because of population growth. Due to immigration.

We can't fund our expenditure. The Gov't aim is to increase productivity - except our level of productivity is less than it was say 20 years ago. As we've become a service-based economy productivity is harder to measure, but by any measure we are less productive.

Rachel wants us to wash our collective faces - bring in more money than the Government spends. Increased GDP through productivity growth, an enliven share owning population, a Stock Market with increased depth and reach, innovation, zero emissions technology, third runway at Heathrow, increased capacity at Gatwick...little about the abandoned periphery (everywhere except London). See a theme here. No plan, no vision, no idea what we're about. Just a smorgasbord. 

Let's take the last objective. We have one of the most expensive energy markets. An immediate cause is the green tax we all pay, but a major factor is we import most of our energy. Fine, lots of counties do that. But the most expensive providers determine our energy market pricing. We’ve known that for years, but the OFGEM hasn't done anything about it. "Regulator Capture"?

Enough of the minutiae:

Rachel has started blaming Brexit for our poor economic performance. Now you wander why Labour have only just cottoned onto this. Firstly, it's the obvious scapegoat and secondly, Labour believes that their supporters now think Brexit was a bad idea. And this gives cover for Labour to break its election pledges. 

Except increasing people’s taxes against a background of worsening services won't wash. 

So, what will she do? If she's any sense she won't further tax business. She could cut benefits and "woke" la services. I personally think she'll cut the benefits that the well-off currently enjoy. Tax relief on pensions, investments, in fact anything most of us can't benefit from. She has to be careful. The triple lock? Tax free 25% pension pot after 55. Any change needs to generate enough income for the Gov't to outweigh the hue and cry and clever accounting. 

 

I think she should say up front "We're Fucked". 

 

r  believes most of its supporters blame Brexit - well for almost everything.