Has Labour crashed the economy ?

@marmaladeandpeanutbutter

"It's outrageous that people are talking about The Labour Party
"Crashing the economy " (what ridiculous nonsense), when the only person who actually did this was a recent Tory prime minister. It took her all of 6 weeks."

I agree that it is certainly both exaggerated and too early to state that Labour are "crashing the economy ". However it is accurate to state that the economy is currently slowly shrinking under Labour.

How much of this is due to global slowdown and how much directly because of Labour policies is impossible to accurately differentiate. But it is accurate to state that the rise in employer NI will mean that employment levels will be lower than if this rise didn't take place. Also the increased Government borrowing will mean that interest rates will be higher (or fall more slowly) than if this additional borrowing didn't happen.

As a working class person i think theyre doing brilliantly.

I can see why you might hate them if you're middle to upper class and you don't want to pay tax.

If that is the case, then the NI increase on businesses will hasten the slide. The early 90’s recession showed that once businesses close, there are mass redundancies, it takes years - 5-10 to see any recovery and for business confidence to improve.

The stats show I think that it is now going to be comparatively more expensive to employ part time workers than full time. AS small business owners decide it’s not worth it any more or go bust, larger businesses decide to only offer full time posts, who will be the first to be affected? What type of people/workers like/need part time roles?

Figures were looking pretty promising before the election actually.

Keir must be getting really nervous now. He's staked Labour's entire reputation on the decisions of Rachel from customer services who seems not to be doing that great a job...

Looking at today's figures compared to the first half of the year I think the answer to your question OP is unfortunately yes.

I think recession was a done deal before the election....it's inevitable. Labour didn't cause it it's been on the cards for 3 years...

Of course. They always do.

What worries me is that Kemi
Badenoch is talking about a flat rate of tax for rich and poor, with poor people paying much more and rich paying much less than currently. Why an I not surprised?

It's outrageous that people are talking about The Labour Party
"Crashing the economy " (what ridiculous nonsense), when the only person who actually did this was a recent Tory prime minister. It took her all of 6 weeks.

I worry about anything that negatively affects employment. Those of us who are old enough will remember the huge levels of redundancies and the recession of the early 90’s. Millions were in negative equity and due to job losses people just couldn’t afford their mortgages and just handed the keys back to building societies/banks.
I think I owned a house for 10 years before the house was worth more than the mortgage due to that slump. Also worked for a bank and I’d just about qualified for annual profit share and then that was suspended for all staff, again for 5-10 years.

i think making it more expensive to employ part time workers particularly is a bad decision in today’s world where due to student loans etc many young people need to be casual part time workers. For older people, this is going to mean more people are going to be fully dependent on state benefits.

UK economy flatlines in run-up to Christmas with 'worse to come' as firms cull jobs after Budget mol.im/a/14197081 via dailym.ai/android

The economy has been running on empty for years. Labour's policies have barely begun to be felt, with the exception of a handful of private school parents who desperately post on here every week determined to make us think that the apocalypse is coming.

Try harder.

@tappitytaptap

"You do understand that 'businesses' fund public services right? The public sector does not pay for itself...."

Unfortunately too many voters especially those on the left cannot accept the basic concept that there is no such thing as "Government money " only money that the Government has taken in the form of taxation from individuals and businesses.

You do understand that 'businesses' fund public services right? The public sector does not pay for itself....

That letter was manipulated by Tories effectively. Government usually spends more than it raises. Now, government debt is at £2.65 trillion, the highest it’s been since the 1960s.

@Tryingtokeepgoing

"A far more logical thing to have done would have been to raise employers NI on those earning over the 40% income tax rate (£50k) ) and then again at 45% (125k)"

I agree that your proposed approach would have been better. I would go further and and say that if the Government really wants to increase NI taxation (personally I would always prefer cuts to existing spending over tax rises) then it would have been better to scrap NI contributions entirely for business and place it entirely on the employees.

This would encourage increased hiring which in turn would create increased income tax revenue.

Of course it would never happen because electorally it would be massively unpopular.

Well it’s fairly obvious that the market will only bear a certain level of price rises before demand drops, and price rises themselves are inflationary. On the NI front, the approach taken is fairly stupid for a number of reasons, not least that it impacts the low paid and low margin sectors (care, retail, hospitality) the most.

A far more logical thing to have done would have been to raise employers NI on those earning over the 40% income tax rate (£50k) ) and then again at 45% (125k)

The claim is that the NI rise will bring in £24 billion. There are 6 million higher rate and 600k additional rate tax payers. So they’d have been looking at around £4K from each of them. I’m not privy to the data, but I’d guess increasing employers NI to 20% on salaries over £50k and 30% on salaries over £125k would have raised a similar amount.

This would have meant the low paid were unaffected, and businesses employing more higher paid staff (generally services, generally higher margin, includes more international firms) would have paid more.

Agreed. Again. On all counts.
Human nature, of course, defaults to the ‘easy’ option. However, those with a bit more understanding/nous/skin in the game/insert your preferred appropriate term here ‘get it’ but are of insufficient quantity to delay gratification and therefore motivate governments to plan and enact for the longer term benefit of the country and its people, rather than their ability to be voted in for a five year term.

@BeretInParis

What is particularly worrying is the continued obsession with outdated and quite frankly dangerous Keynesian economics that the Government can borrow it's way to economic growth. This simply crowds out private investment, leads to politically popular but economically sub standard investments and the resulting higher debt means interest rates are higher thereby stifling private sector investment leading to lower economic growth leading to calls for more government spending and borrowing and so on.

@BeretInParis

I don't think it's necessarily the electorate but human nature of wanting the upside but refusing to acknowledge the downside.

Everyone likes the Christmas over indulge but no one likes the January diet and gym.

You're right @1dayatatime. I've been naive. How depressing. :(
Just goes to show the quality of the electorate though - or lack of - doesn't it?!

@BeretInParis

"How can we get the right people into politics to better represent our interests and get us out of this terminal decline?"

We can't because the public will never vote for politicians that have the unpopular policies needed to get us out of this decline.

It reminds me of the quote by Alexander Tytler in the early 1800s:

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy"

@OllyBJolly

"I'm also of the opinion that the public sector needs large scale reform, not more money thrown at it. "

I totally agree but such an approach won't win votes. Plus it's easier to say let's fund it with more taxation on the rich (with rich being defined as someone earning more than me) or cutting wasteful spending (which is spending on anything that doesn't benefit me) or increasing debt (because that burden lands on the next generation and not me).

Shell is considering fleeing the UK to be listed on Dow Jones instead of FTSE. It's the big businesses we need to worry about.

@ThereIsALifeOutThere

"Very few ‘British firms’ can ‘flee’ the U.K. Theyre small and medium businesses whose customer base is local. They have nor the means nor the will to ‘flee’."

True but they can fail to grow or even go bust.

The problem is a failure to recognise that UK businesses are not simply made up of small scale businesses such as hairdressers, builders or clothing retailers but large export driven businesses such as telecoms or car manufacturers or glass producers that are totally reliant on overseas sales.