Can someone explain to me why/how the Labour government has directly made them worse off in the last 15 months?

[MotherofAdults]

Can someone explain to me why/how the Labour government has directly made them worse off in the last 15 months? I see this claim a lot on these pages, but I don't understand why. Sorry if I sound stupid, I am just trying to get clear.

I totally understand that the cost of living keeps going up - that inflation keeps rising (3.5-3.8%?) and that mortgage interest remains relatively high, but I don't understand why or how this is the fault of the current government? What have/haven't they done? Are people angry that they haven't curbed inflation? What should they be doing?

If we could avoid mentioning the things that didn't actually happen (eg the Winter Fuel Allowence cuts) and speculation about what the next budget will do (doubling of council tax, rise in minimum wage etc), that would be really helpful. I am looking for actual changes made by this that have directly affected your financial situation since Labour got it.

The spend on asylum seekers has been going on for years, so is that a cost that has increased with this government that will make us individually feel worse off? The last point isn't an economic thing, though I do agree not everything is about money. It is worth noting that there are plenty of areas completely unaffected by marches or the clash of people supporting/opposing Israel.

The withdrawal of the Winter Fuel Payment.

As a consquence one had to turn the heating down to 10° degrees in the servants quarters.

I think they coped, one was not notified of any problems, like pipes freezing or anything serious.

Agree about the voters, nowhere is this more true than my town.

Democracy has many levels. I don't mean "hand the councils back". I mean have effective oversight, checks and balances. At the moment there are none on my council. It literally does what it likes, fucks things up, awards itself huge salaries and then wastes more money on "consultations" which are then ignored.

100% agree

Currently Made it most expensive to hire staff due to changes to employer ni threshold

Future
Inheritance tax about to hit employers and farmers hard from 6 April 2026 which will likely result in a fire sale of certain businesses and loss of jobs.
Pensions about to drag estates not presently subject to inheritance tax right into the inheritance tax frame

They’ve got the option to move to state schools. I would like to see all private schools closed down they just perpetuate the elitism of this country.

I lost one of my jobs because the additional of VAT into school fees and loss of business rates relief and NIC increase, meant redundancies had to be made.

Schools that make millions are not a charity the predicted closing of private schools never happens these people had the money.

Rise in NI meant my employer could only give me a tiny below inflation payrise, yet my bills have risen. A team leader left but I can't apply for his job as it has been scrapped to save money, so I'm unable to progress. I'm 4 weeks from payday, the bills I have gone out and I have hardly anything left from my wages.

The main problem has been that the NI increases have led to job losses. I do think that was ill judged - however all the major retailers/corporations are still posting massive profits so they haven't been hit that hard. Smaller businesses are worse affected, also by the rise in minimum wage, which is having the knock-on effect of making it hard for younger people to find work.

But in terms of the Labour government making life more expensive for everyone - they're not. Inflation isn't really something governments can hugely control. The knock-on effect of printing loads of money during Covid is still an issue there. (That was the Tories, just stating the obvious). The last government made everything fucking shit - years and years of zero growth and decimating public services and economic stagnation followed by a Covid crash and the Ukraine war hitting the economy - and they've got a huge job in trying to stop the economy from collapsing completely as a result.

My work has to find around 800 hundred thousand in NI payments so we got a 1 % raise

By giving above inflation pay rises to government workers including nhs etc, they have just perpetuated the inflation for everyone.

The organisation I worked for made significant redundancies, based on staffing costs.

Are you being deliberately obtuse. Of course I wouldn't take someone's passport off them if they wanted to move abroad.

You said “And as for the ones who want to move, theu can fill their boots - but they would have to give up their British Citizenship if they dont want to pay tax.”.

The US do it. If you want to remain a US citizen you have to continue to pay tax even if you live outside the US

A quick Google tells you this is nonsense. The US tax system is much more complicated than that.

You wouldn't lose 30% of tax revenue because not everyone would leave

I didn’t say they would. I said “Even a relatively small amount leaving would have a huge impact on the tax take.”

Things like the benefits bill and health services bill would also reduce as improved services meant people were healthier, again, making up some of the shortfall from any loss in tax benefits.

How would services improve if the tax take falls? Where would the funding for improved services come from? Your reasoning doesn’t make sense. You’d lose VAT from people leaving (wealthier people have more disposable income so tend to spend more on items subject to VAT). No one with any basic understanding of simple economics and maths can think that bringing in policies encouraging those that contribute the most to the tax system to leave will improve the economic situation in the UK.

It’s VAT in school fees for me too. SEND kid, EHCP. DC can’t attend any other school for various reasons. Local authority won’t accept financial responsibility or provide a state school alternative that’s suitable. Year long wait for tribunal.

I’d sadly add (as a lifelong Labour voter) that the current Labour Party appear to have no vision for education, SEND or otherwise. No big budget increases and a lot of lies about how taxing education is good for the country and will recruit extra teachers. In reality: it’s not raising that much money and it’s causing school closures particularly of small, rural and primary age private schools, which loses precious jobs in a small local economy. Private schools covers alternative schools like Steiner, religious faith schools and single sex schools, and special skills schools like dance or music. It’s not better for us as a country to tax those out of existence.

It’s also causing flight of pupils to state schools, putting pressure on places for those, especially for bright kids who can’t afford private. It’s really pressurizing state SEND provision (lots of kids at private school are/were there because they have SEND). The effects aren’t evenly spread across the country. The big old very establishment private schools (for boys) that were established centuries ago are completely unruffled by this - more of the parents are very wealthy to absorb it and if they have big building projects the schools can actually reclaim the VAT back on them and recoup money from the taxpayer.
NI increases are also affecting schools whose highest outgoing costs are staff costs.

But some posters will carry on being mean about other people’s kids having to leave their private schools. or other people’s kids state schools having an accommodate more and more kids shrinking the catchment and displacing their own kids, and stretching the SEND budget even further. They’re all right Jack.

Well yes. Experience has shown that increasing tax merely encourages the wealthiest to find new ways of avoiding it altogether. It’s like CGT. Prior to the introduction of taper relief in 1998, entrepreneurs would often arrange their affairs so that gains were realised when they were subject to tax in another country (eg by moving). They simply were not happy with paying high rates of CGT. They often avoided UK tax altogether. When UK rates were lowered, they were often happy to stay here and pay some UK tax. The UK is better off getting a lower rate of tax than none at all.

On jobs in my area feed there's a position in a hospice, head of retail, that brings with it a salary of £45,521 - £52,092 per year. Yet hospices have moaned about the NI rise for it's workers, who earn minimum wage.

@RoostingHens I have no idea of the mechanics of it but it is actually correct info - it’s fully offsetable against corp tax - I’m sure an accountant on here might have a better idea in which instances the gvt actually make more revenue from it - it’s the same with a lot of taxes, employer pension contributions etc

Schools that make millions pay corporation tax, the only tax advantage they had was business rate relief. The closing of private schools did happen and will continue to happen until Labour are out in a few years.Who are ‘these’ people with the money? Do you mean parents?

You’ve confused lots of different things, Labour have introduced VAT on education and vocational training of children. I do think it’s worth understanding policies before commenting

As I mentioned before Employers NI is offsetable against corp tax due as a deductible expense - minimum wage though I think can make more difference as although again ‘wages paid’ are offsetable , it’s only really offsetable if you are making enough profit to pay significant corporation tax and unless you have good cash reserves can impact quickly on cash flow as you ‘have to pay wages when due’ and hence you either have to factor it into profit reduction or charge customers/clients more. technically you do pay employers NI too when it’s due , but a lot of companies do fudge it and pay in chunks and not always bang on time - which is why when you see companies books go under they often owe significant amounts in both employee deducted taxes ( that they haven’t yet paid over) as well as employer NI, corporation tax, VAT etc - there are an awful lot of private companies run on a knife edge ( and employees are oblivious too )

This is the problem. We are led to believe that a new government will mean better things for us when in fact it's just more of the same. Constant arguing, blame and one-upmanship between the two main parties which is hugely tedious and just sends us around in circles.
I think a coalition government with the best people from all of the parties in key roles (still considering who they might be!) is the only way I can see us getting out of the mess we are in - by pulling together. It's absolutely crazy.

I’m a business owner. The national insurance increase hasn’t been helpful and my business is struggling generally due to the economic landscape. I have taken a pay cut and I am, measurably and considerably, poorer.

I don’t blame the Labour government though. My business would have gone under without the furlough payments during the pandemic and I don’t consider business to be exempt from helping dig the country out of the hole we are in. People have very short memories. The pandemic cost a lot of money. The war in Ukraine is continuing to hurt us all financially. Anyone blaming the Labour government is blinded by ideology. I don’t love this government. But they’re doing an ok job of the economy, all things considered. That none of us is materially feeling rich yet is just impatience and naivety.

Main gripe from me is I am seeing nothing from my money, and promises are being broken.

Last year Reeves & Co clawed in billions for the exchequer on the promise it was "once in a generation", now, 13 months on she's back for more, having pissed that up against the wall.

And next year it will be the same, and repeat - until she or her successors actually run out of OUR money.

The ONLY way the economy can grow is to sell goods / services / crops to other economies as well as "in house" - we are not doing that, more is rushing out than coming in - its an impossible leak to fix, even for a competent crowd, and I see no competence on either side of the house.

It only ends when we are all skint, and even then there is no way out of the financial vortex.

You are joking. Don't you remember the last one?

For me, it's this. We work with businesses who are all looking to cut costs because their wage bill has increased, so that means our income is reducing. In addition, our own NI bill went up by 20% also. Plus corporation tax was put up by the Tories.

As a result, we, and many of our clients, are reducing headcount, either by redundancy or by not replacing staff that have left.

We're very much going into a contraction phase and sitting it out. Not exactly boosting the economy!