To think even Labour know we can’t afford everything the public want?

[Coffeeandbourbons]

Off the back of another thread, Labour have dropped their pledge to make tuition fees free.

I read a lot on here (and hear a lot IRL) that this country is very wealthy and that we could afford everything the public want (excellent and efficient public services, lots of things subsidised or free such as prescriptions and childcare, a generous benefits system) if we just tax the rich enough. However our economy simply isn’t growing and we’re heavily in debt.

AIBU to think we’re actually up the shitter, can’t afford what we think we can and even Labour knows this, hence the broken pledges?

Interested to hear from economics-savvy Mumsnetters as I’m a bit rubbish with the numbers…

It wasn’t just Corbyn’s pipe dream though. It was one of the key pledges that Starmer promised to take forward when he was running for the leadership. He appears to have abandoned it already. How quickly will he abandon general election pledges if he wins, when he realises that the plans are not economically viable?

He has remained vague about tuition fees though and said he will make further announcements in due course. I suspect they might be considering means testing fees as he was talking about “fairness”, which usually means taxing middle/high earners more. If they do decide to go down that route, it won’t only be the super wealthy affected. He would have to catch a lot of students through means testing to make it work financially.

The answer appears to always be tax the net contributors on PAYE more. It doesn’t work. There need to be massive structural changes within our state services, however, no government wants to do it because the administration making the investment are unlikely to be in power by the time the benefits are realised. They don’t have the appetite for long term investments.

Also I don’t agree the money is there. We were growing pre-Brexit. Now we’re in managed decline. Until a leader can be honest with the British people, we will continue to sink. I recently returned from Australia, like any country they have their problems but it still felt like a country on the up. I came back here and boy the contrast was huge.

removing charitable status for private schools, non dom stamp duty on houses over £1 million raise very little compared to everyone paying 1p more income tax or raising VAT 1%
it is like say the CEO of a big company being paid £10million a year, if shared between the 50,000 employees it amounts to a rise of 0.1p per hour, if instead you taxed the CEO at 70 % instead of 50% you would have an extra 2 million
however if all 50,000 employees pay even 1% extra tax assuming they are on minimum wage for 35 hours a week with tax allowance of 12K to make maths easy ( at 20% tax they pay £1400 each tax or 70 million collectively: taxed at 21% £1470 each or 73.5million an increase of 3.5 million so you raise almost double tax revenue in just one large business by increasing tax by 1% on minimum wage earners than by upping it by 20% for the richest

I'm going to repeat some of Aishah's post, because it needs repeating:
"Spending on public services makes money because those employees pay tax, spend money in the country which generates more tax, that money gets spent again making more tax". That is how the alternative to austerity works.
A country's economy is not the same as a finite amount of savings owned by an individual, even though the Tories want us to believe that.
The "magic money tree" is constantly generated by us, the majority of people who work. Where does that money go? Either it gets invested back in us, or it does not, and we become poorer. If austerity for 11 or so years had worked, why are we not better off? Because the wealth we created has not been invested in health, education, infrastructure: all of those things that help us to generate more wealth.
So: I would prefer to live in a "cloud cuckoo land" benefitting from the "magic money tree" that is constantly helped to grow by my labour, in this the sixth richest country on the planet.

The UK hasn’t been growing well in economic terms well since before the Global Recession and certainly before Brexit/COVID, although of course those were major shocks.

The UK could be one of world leaders in green energy technology (and other sectors) but as per usual, the policies aren’t there which will be a shame.

We will never be an industrial nation again but we have an amazing science and tech sector (among others) and need to harness our capabilities as a knowledge based economy - that means an excellent education system. The over reliance on financial services is v bad in my view.

Politicians lie and are self serving. Red/blue, left/right, Labour/Tory is all just theatre to distract and divide us all and to convince us that we are in charge of our destiny.

Or do you think that companies and people with billions of pounds and who have meetings with civil servants and politicians don't get a massive say in things? Do you think they sit round debating what the people want and what will be best for us?

Maybe I'm a mad conspiracy theorist. Or maybe some people need to stop being so childishly naïve about how the world works.

How?

Where is this fantasy money? Do tell us?

Don’t be asking rational questions like this. It causes people to have to quantify nonsense statements.

Why do you think the majority of billionaires in this country were Tory donors? Do you think it’s out of the kindness of their heart? No it’s because the Tories give them huge benefits, don’t criminalise tax loopholes (one his billionaire wife took massive advantage of). The richest 1% have over 80% of the countries wealth for a reason.

Yes - this is a good explanation of things and why I believe in public services and investment in those services. People providing those services should have a decent income and standard of living and money to spend in the economy - rather than being employed by private companies to provide the service, paid a pittance and the profit going into shareholders pockets - who then hoard the wealth and often provide a substandard service.

In answer to the question, where does the money come from? Imagine we are bees in a bee hive. We work away, getting nectar from plants and pollinating them in the process. Using the nectar to make honey. Eating the honey to give us strength to get more nectar and make more honey, and there is a lot of nectar around because all of our work has helped the flowers to grow.

Then one day the big fat bumble bees in charge get worried that they are not getting enough honey for themselves. They worry that if the bees have too much honey,, they will get lazy. They tell us that we are running out of honey, so they are going to ration it out, because after all there is no "magic honey tree". They convince us that, once they have saved up enough honey, some of it will trickle down to us.
As a result, us bees get hungry and can't work as much, the flowers don't get pollinated and grow (the economy shrinks) the walls of the hive start falling into disrepair. All because some bumble bees conned us into thinking there wasn't enough honey to go round, and got fat on it themselves.

I read an article recently in which someone said that the British want EU-style welfare with US-style low taxes. I think there's some truth in that. People are always clamouring for more but only as long as someone else pays for it. At some point, when people perceive them to be unfair or punitive, raising taxes is counter productive because tax revenue falls as people previously happy to pay start avoiding.

This! I was at Uni when Labour brought in tuition fees - couldn't believe they did it!

Bumble bees and honey bees do not live in a hive together.

Source: I keep bees. Honey bees. No one puts bumble bees into the hive, let alone appoints them the "leader".

Ok, we are not bees. Bumble bees are not capitalists either. And they don't believe in trickle down economics. I apologize. I got it wrong. I was unfair to the bumble bees.

Let's forget I ever mentioned bumble bees. It was the spiders! Massive, fat capitalist spiders in charge of a beehive.

A much lower percentage of people went to University in those days and the maintenance grant was means-tested on parents and your local council paid your tuition fees which were low anyway.

Yes and similarly if you want 'open door immigration'/to be a melting pot like the USA, you cannot really afford to have Scandinavian comprehensive welfare provision, the tax levels would be counter-productive.

Someone once said 'You can vote for who ever you like but the Government always wins', the real power is with the senior civil servants.

How many University courses are really worth the price, to anyone? Every year I look through the clearing lists and can't believe some of the nonsensical courses available, many of which would be better delivered as a well structured apprenticeship, a bit like the old Sandwich Courses, study part time and have a part time paying job.

Sorry I was a bit rude. But analogies don't work in my opinion. Because thing X is never going to be exactly like thing Y. If you want to talk about a thing, just talk about it. You don't need to do all this "Imagine it's a beehive or a spider". Just say what you want to say.

Fair enough if you don't like analogies and yes, they are never quite right. But i I think that analogies help things to stick in people's minds and I get frustrated that the simplistic line about the magic money tree is so easy to remember, while the other side of the argument is difficult to put in a soundbite.

I will be shocked if a) Labour lose the next election and b) KS doesn't step down soon after winning, probably citing some random 'health issue'.

Nothing he does / says makes me think he really wants to be anywhere near Number 10 with the big boy suit on. I really hope Labour do get in though, this gov have been a bloody disaster.

There are so many threads to unpick in this topic. In my head the main questions are:-

1. Is sufficient money raised in taxes?
2. Is the money that is raised deployed efficiently?

Personally, I don't think that enough is raised but what is raised isn't managed properly. There is so much waste everywhere. I would happily pay more tax if I trusted that it would go where it should. I don't.

Contentious, but the true impact of Brexit has yet to unfold. Even the ONS believe that its impact will be several times higher than the impact of covid and that's the government's own data. Thus, I don't think it's true to just believe the money is there somewhere.

I don't really trust Labour either, so we are left with a weak government, a weak opposition and an economy on the raggedy edge of recession. Put in picked his moment to invade the Ukraine as the USA were arguing about Trump and the UK (and a lot of Europe) were focused on Brexit. And then Covid too.

I don't have an answer I'm afraid as there aren't really any sensible alternatives. 🤦‍♂️