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.

They are making it very hard for small business owners. Increase in NI, Changes to workers rights coming in which basically mean I can hire someone and the next day they can call in sick and get paid for it.
About to increase MW again by a big chunk which just means more people will lose their jobs because there is no profit left to squeeze.
I own a hospitality business where 10 young people will lose their job in April because of this government.

I absolutely agree with you and I’m sorry that you feel no better off.

You’re correct that raising the bar for NMW isn’t working and it also squeezes the middle earners so that essentially, we all have less disposable income.

It’s keeping those at the bottom in poverty and eradicating the middle class. (Adding VAT to school fees also contributes towards this). While the wealthy continue growing their assets. It’s deeply immoral and something needs to change but sadly, I can only see that happening in extreme/tragic circumstances and probably not in our lifetimes!

I’m not a conspiracy theorist, btw, just really fed up! 😅

I haven't been directly impacted yet but that will change after this coming budget.

So far though - They have increased our debt as a country which means we are in a bigger mess.

The number of people claiming benefits seems to be going up and up and they failed to address this (although I know RR did try but didn't get the support)

Job market is very tough just now so some have lost their jobs (employer NI increase) and those who have hung onto theirs are cutting back on spending which impacts economy

They made some good decisions and then reversed them when they got some flack for it (WFA etc). Having a goverment with no backbone is bad for us and tells the rest of the world they can push us about.

Pensions will be included for IHT from (I think next year) so that will impact some of us going forward.

Upsetting our farmers I thought was disloyal and also worrying given we already don't grow enough of our own food

Making people pay vat on private school was daft. These people are already not using public paid education. Why penalise them for saving the goverment money.

Our interest on bonds went up as the markets can see they are making bad decisions.

Inflation still too high which impacts us all in our food prices.

COMING IN THIS BUDGET NOV 25
Cash Isa is getting cut to 10K so more tax on savings

She is doing alot of changes to pensions and that will impact us all - lump sum might be taken away, tax relief is getting changed etc. People will save less for their own private pensions which in turn means they will claim more in later life. Short term gain for longer term pain

Tax bands are frozen (ok they didn't start this) but they are admitting now they are going to put up income tax. This is going to encourage people not to work and also someone should give them a copy of the laffer tax curve.

It seems like their is going to be a exit tax on people leaving the UK so they pay tax on their wealth on leaving. This pretty much tells the world we are an undesirable place to be because the goverment is trying to stop them leaving rather than giving them reasons to stay.

They seem to not understand that the way out of this is
GROWTH - incentivise people to start their own businesses by giving them tax breaks. Encourage companies to invest in UK by giving them favourable conditions thus creating jobs. Support companies to create wealth and hire people not hike up their NI which has opposite effect. Make it way less 'profitable' to be on benefits so nobody wants to not have a job.

CUT COSTS - some costs are needing cut no doubt. We are a nation of people who expect the goverment to pay for their housing, their benefits, their healthcare, etc. This has lead to increasing resentment amongst those who work hard and even they are developing an attitude of fuck that.

@NewspaperTaxis "Labour try to cater for these, but risk tax rises, which gives the general public a collective moan" so this is what I lean towards really and it's about social responsibility for me. I actually feel that Labour are not doing the social responisbility things well either though.

A lot of my professional friends are facing the double whammy of threatened redundancies (several have lost their jobs) and school fees VAT and huge mortgages/increases in bills. We are in the demographic of Londoners who pay a lot of tax, live in small houses on big mortgages etc. So have definitely experienced a loss of quality of living, and it is quite substantial. I guess it may just be time to move out of London, put our feet up more and live more comfortable and be less driven/workaholic/24 hour schedule of work kids activities all weekend. It is a hectic lifestyle and not worth it anymore. I think people are realising this more and more.

Can you please clarify how you 'lost it' last year ?

As far as I'm aware there wasn't any change in the rules last year.

Labour only suggested that they would scrap it for those not on Pension Credit this summer, whcih they have now back-tracked on, so you 'losing it' last year wouldn't have anything to do with Labour policy .

Plus the attack on Farmers. It is like Labour don’t know where our food comes from and seems determined to make us even more reliant on precarious imports. There is absolutely no way most farmers can ever service the sort of debt that would arise from inheritance tax simply by farming the land for food production. Many already effectively earn below minimum wage for their hours of work. There are plenty of ways to have ensured such a tax was only applied to those who just sold up after inheritance but protect those who farm. Plus they are now introducing a law to allow farmland to be compulsory purchases at agricultural value then sold on at full development value.

And as for turning good agricultural land over to solar farms…

Lovely. You’re a sweetheart aren’t you? Be kind from Labour supporters, always.

PS. No chance do you send your children to PS. I know you wish you could, but you can’t. Don’t worry about it.

Those on NMW obviously benefit from having higher wages, but they may not feel the benefit because this is cancelled out by the cost of living. But they would definitely feel the impact of that more if they hadn't had the pay increase.

Individuals won't feel the benefit of the increase in employer NI, though I suppose the argument would be that we all benefit from an increase in the overall tax take. But again, we won't really feel the benefits of this because the government is also dealing with higher costs. Also, the increase in tax take needs to be offset against the impact of the NI increases and NMW increases on employment. If employers decide that hiring more staff is unaffordable, then they will create fewer jobs and the government will have to pay out more in unemployment benefits. On balance, I think the Employer NI increase was a mistake - particularly when paired with the increase in NMW, which I do believe was necessary.

They only went for Employer NI because they had boxed themselves into a corner during the election campaign by making promises that they couldn't keep about not raising taxes on "working people". They should have been braver and bolder, and fronted up with the country about what needed to be done.

To be fair, while I am anti Brexit and it was always going to be a shit show it has benefited those that did want it quite a lot. Wages at the bottom went up significantly when the immigrants left - for a while lots of businesses, including retailers, had to pay above minimum wage for entry level jobs just to get staff.

Yes, some of the middle classes have suffered, and everyone will all be worse off in the medium terms, but the fact is that the poorest and those with skills like electricians, mechanics, builders, plumbers etc are all a lot better off. As anyone who has tried to get work done on their home will attest!

Which just highlights the problem with our membership of the EU - the middle classes benefitted, but their lifestyles were subsidised by cheap imported labour that directly affected the lower paid, depressing their incomes.

Now Labour are threatening even higher taxes and council taxes for Londoners, I really think that is is the end for most people who are still self sustaining with no benefits and no parental help. It is not necessarily a bad thing long term because professionals moving to other cities may bring more growth there.

Everybody not on pension credit lost it last year. It was only reinstated this summer ready for this winter. Where have you been?

hmmm. let's see.

VAT on school fees means my costs have risen £800 a month. A month. That direct enough? Our main source of income (alot more than 50%) is vanishing from December 1 because the company has decided to move lock stock and barrel to another country due to the rise in NI and employer taxes and the sense that the UK is no longer a place to invest, and this government is anti business.

Our local beloved kennels is closing because after the rise of COL, utilities, NI and other employer taxes etc it's no longer viable for them to operate. 2 other kennels/catteries I have contacted to try and find an alternative have said they are closing just after Christmas for the same reason.

That's just off the top of my head, without even having to think too hard about it.

The OP is very quick to reply to posts that aren't directly related to her question, but assiduous in avoiding the many posts with actual facts about how the Government has made us worse off ;)

There are some areas that they do need to increase spending. Police (frontline police is scarce and the police need to be far better equipped given what they are dealing with nowadays. They all need tasers and quite frankly I think they need guns).

Armed forces - yip I agree with having a well paid, well motivated armed force. I don't want to be around if we are attacked and nobody to defend us.

Yeah I totally agree. And people who work so hard towards a large wage are then seeing the reward for that sacrifice pulled from under them. I don't agree with it.

I just save, save, save while on benefits so that I can free up monthly income via paying off bills yearly.

My children don't know we're poor <3

VAT on school fees the big one for us. I know we're supposed to be whipping ourselves with broken glass and apologising for being such awful and terrible people but it's a lot and hard when your kids are settled and happy.

The inflation on food has started up again after coming down.

Employer's NI for my business is hurting profit.

Housing market is dead due to all the shite around taxes.

Pound is dying on the forex markets also hurting business.

My company has just announced that they have chosen to contract out a lot of our processing work to an overseas company. My job involves data processing too. At the moment I’m not being made redundant but some colleagues are being redistributed to different roles. They will not be replaced when they leave.

We have a lot of part time workers that will have been impacted by the reduction in the employer NI threshold. This is unfortunately a consequence of that change. Over time I predict that more and more of our work will move overseas. So fewer UK jobs.

Wow that’s quite a graph

Same. VAT on school fees has had the biggest financial impact on us as a family. It's become a real struggle but with a SEN child and no suitable local alternatives we will just have to suck it up. The fact that we can still manage it by cutting back all sorts is I think still a first world problem in a country with 4 million children living in poverty. That's shameful.

I still voted for Labour in the election though as the best way to get our local solid Tory seat overturned. More naturally a Lib Dem voter I suppose but I think I am in a minority in that I think Labour are doing the best they can with a horrific fiscal legacy. I suspect things will start to even out just in time for the next GE and they will be up against bullshit promises from others.

Otherwise not personally affected. I've seen a huge round of redundancies in the local private school sector and my own employer has made 25% of staff redundant and we have a hiring freeze so I have for now been fortunate.

The rise in NI has directly impacted my workplace. It has resulted in redundancies and will probably mean more in the near future.
Their proposals related to international students are making us less desirable as a place to study and that's before they've even been implemented meaning even more cut backs ( I work at a university). The only positive is that the US is even less friendly to international students.

All of this has resulted in wage stagnation (but decline in real terms), no promotion prospects, ridiculously high workload and burnout for me and my staff.
Everything is more expensive so we have significantly less disposable income so we've cut back on everything.

We will be hit hard by any of the proposed tax increases and if they implement them all we're absolutely screwed. Literally to the point where we wouldn't be able to afford our bills. We both work in professional jobs and it feels like it's a ridiculous situation to be in.

Well I've had to lock down my Twitter/X is case I get a knock on the door from the thought police for some perceived non-crime, hate crime such as deadnaming or misgendering. I definitely think free speech and women's rights have had a negative impact under Labour.

And when this Autumn budget rolls around we'll all be paying more tax because the economy has been so poorly mismanaged by Labour that we have no growth and bigger bills to pay.

As a result, we have been deemed fiscally reckless by our creditors and now we are paying a premium to service our borrowing costs.

So we'll be paying because there has been no growth, we are paying because there has been no welfare reform, we are paying because inflation is high and we are paying because borrowing is too high, and we are paying because the economy is demoralised and productivity is on its arse. An what you have there is a self sustaining feedback loop of misery. No wonder Reeves is crying.

The rise in NI for employers has resulted in redundancies at the company I work for. There have been no pay rises for 2 years to compensate for this loss in profit.

@Tryingtokeepgoing am I? Sorry. What I am seeing is that the Mumsnet demographic (as represented by responses here) has quite specific concerns.

I really don't want to get into the VAT on private school fees, because for me it's more of a choice/luxury, whereas tax and NMW is not, but I totally understand it affects people's financial situations.

So yes it's a repeated and direct answer to my question, thank you.

I am, as I write, trying to think about the needs of businesses v. government fiscal plans - I don't understand enough.