‘22bn black hole’

Labour knew and they spent 10bn of it with pay rises. So they in affect helped create the problem. We also aren’t taking into account how much did covid cost us with the increase on benefits, cost of living payments and paying out to save business’ who had to close during covid. We were always going to suffer from the after effects of Covid, too. Our nhs is drowning so it’s okay giving pay rises but we have potentially put the nhs at risk with the pension fuel allowance being cut. A lot of people are paying privately for dentists and we seem to now be seeing rises of council tax and other taxes to come despite the huge poverty line the lower class are facing with the cost of living. Labour did try and change the 3rd child rule in remarks to the tax credits payments. However this was always something good to implement in the system to stop people having more children then they can afford and relying on the tax payer to foot the bill. They did push harder with child maintenance to have absent parents pay for these children

Well according to the Times deputy political editor the Conservatives if reelected were expecting to pay several billion (unbudgeted) -

"There's a row over whether the £22bn blackhole figure used by Reeves is fair, given £9.4bn is from Lab gov's decision to implement public sector pay recommendations

Useful context: Under Hunt, HMT thought it would have to spend up to £7bn on pay rises..

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x.com/harryyorke1/status/1818280623368519864?s=46&t=Uw4lJNwxFZFnX0Xs3doHYg

Of the £22 billion "black hole" £9 billion is down to the Labour government decision to give above inflation pay rises to junior doctors and transport workers.

I am not saying I disagree with the decision to pay junior doctors but stating the previous Conservative Govt is to blame for the entire £22 billion budget "black hole " is completely false.

Conservative Bashing seems to be the norm ... sad performance by Kier so far.

The way I understood it is that a significant proportion of the 22bn has come from the pay rises and subsequent increases in the pension contributions for doctors and transport workers. I personally found it astounding that the new government did put any conditions on the pay rises and did them (for the doctors) over just 2 years. I do however, believe that a pretty significant pay rise was in order.

Incentivise with pay by all means but not pay and gilt edged guarantee tax payer backed pensions and sickness policies that are totally out of whack with private sector. These are the not inconsequential hidden costs whilst public sector workers complain about their pay...so make it a level playing field and when people leave the public sector there would be no duty for the treasury/tax payer to have to continue paying out in some way.

Of course it’s been years. The issue is with spending, not tax. UK already has high tax level.

That's not what has left us buggered, it was the underlying weaknesses in our economy. If you compare what other G7 countries spent, you could argue we didn't use enough fiscal stimulus.

https://ifs.org.uk/articles/how-does-size-uks-fiscal-response-coronavirus-compare-other-countries

I have not forgotten that Labour completely failed to speak a word of opposition to the money-swallowing lockdowns; did they even point out that lockdowns were burning vast amounts of money each day? As far as I remember, Labour cheered lockdowns on, complained that they did not go far enough, and grumbled extremely loudly at any talk of easing them at all.

So they have a certain complicity in the massive black hole, as far as I am concerned.

If you were writing a drama about how to destroy a progressive party that was close to taking power, you'd probably write the last 7 years of what's happened.

The anti-Corbyn mobilisation of the establishment, including a section of the Labour Party had "A Very British Coup" vibes. The capture of the party by "Labour Together" & the rise of the unremarkable Sir Kier Starmer (member of the trilateral Commission) to leader, starts to make sense.

Between 1990 and 2022 billionaires in the UK increased their wealth by 1000%, an extra £600 billion. Last year the richest 1% held more wealth than 70% of Brits. That's where most of the "black hole" is.

I think they are on track to crash the economy come oct. Terrifying.

“The UK’s whole of government accounts for 2021-22 – which consolidate the audited accounts of over 10,000 organisations across the UK public sector – show the public sector pensions liability stood at £2,639.1bn, or 42% of the UK’s total liabilities.”

But you also need to incentivise people to take up public sector roles like nursing, midwifery, police, armed forces etc etc. The pension is a big part of that incentive.

The black hole is probably the doctors pension scheme with the huge increase in pay and therefore employer pension contributions and payments. Thats down to us of course. Or a new black hole.

I would like to know exactly how much the treasury spend on public sector defined benefit scheme...that can go for a start

Former senior economist Andy Haldane told Sky News that Rachel Reeves's comments earlier this summer had spooked consumers, businesses and investors.

He said: "The black hole event was unnecessary and probably unhelpful economically.

"It's one thing to reveal a black hole, if that indeed is what it is. But just leaving that to sit for three months I think was a bad idea."

Asked what the government should have done, he said it was "much better to say nothing until you provide solutions".

https://news.sky.com/story/chancellors-black-hole-claim-unnecessary-and-unhelpful-says-ex-bank-of-england-economist-13213523

Unspecified 'spending pressures elsewhere' -

The problem is that this time around, with major spending pressures elsewhere, there does not seem to be enough left in the Reserve for such a top-up.

The 2024-2025 figures are estimates - the Home Office doesn't appear to have requested the extra funds yet;

Then why does the IFS say it’s already spent?

The 2024-2025 figures are estimates - the Home Office doesn't appear to have requested the extra funds yet;

When Rachel Reeves pointed to a £6.4 billion in-year spending pressure on the asylum system, she was in effect pre-recognising the top-up that the Home Office was banking on receiving later in the year.

Why can't the government delay or cut some of this funding if they are so cash-strapped?

Ed Miliband: Labour will honour pledge of £11.6bn in overseas climate aid.

The Tories were preparing to ditch the pledge, according to the former minister Zac Goldsmith.

https://newsrounds.econaiplus.com/ed-miliband-labour-will-honour-pledge-of-11-6bn-in-overseas-climate-aid/

Over half of this money hasn't been spent - the pledge was made before we started sending billions to Ukraine and before the energy crisis.

The government didn’t know the entire year’s reserve had been spent in three months. Nor did the IFS. Or the OBR. The Home Office spent its budget and the reserve before the election.

You missed out the next sentence;

This was to some degree predictable but is no less of a fiscal headache for that.

Also;
A key plank of the new Chancellor's argument was that these costs were genuinely unexpected and could not be met from within the departmental budgets she inherited from her predecessor.

Labour knew about the Home Office overspend.

Final salary pension schemes are pretty much gone in the public sector now anyway, aren’t they? It’s career average now.

The problem for the new government is that it inherited a position where asylum costs this year appear to be on a similar scale to those seen in previous years, but the Reserve has already been spent elsewhere.

How could anyone know in February that this year’s Reserve had already been spent elsewhere? That money wasn’t even available until April.

That's odd - it was reported on GB News in February as well;

https://www.gbnews.com/politics/labour-slams-sunak-asylum-system-chaos-overspend

Labour can't say they didn't know about the overspend because they carried out similar analysis themselves back in February this year;

I think you’ll find they can, given that neither the IFS or the OBR were privy to it until after the election.

"Labour has set out a clear plan to save billions of pounds for the taxpayer..."

Expectations are high.