What Rachel Reeves does next? Surprised no thread on this yet. It's all over Twitter

[Sharingsomewisdom]

https://www.dailymail.co.uk/news/article-13764547/Rachel-Reeves-mulls-tax-hikes-spending-squeeze-raising-rents-social-housing-Chancellor-sees-Government-borrow-3bn-forecast-month.html

Or am I the only one interested what she is eying next? Any comment on the reasonableness or otherwise of Rachel's next focus?

Not strictly true. In the run up to the election Blair took the Tories (John Major government) to task, saying that they would inherit a national debt that had doubled under Majors’ watch.

Gordon Brown accused them of leaving a black hole in the economy when Labour came to power in 1997. As a result they brought forward work on the Welfare Reform and Pensions bill intended to save approximately £750 million per year from state benefits paid on housing, income support, council tax receipts, disability benefits and incapacity benefit. The bill was responsible for the introduction of private assessment companies to assess for disability and sickness benefits and replacing sickness and invalidity benefits with ESA, with considerably tightened restrictions for both. So as with successive governments recently, the most vulnerable were in the firing line. Maybe not to the same extent, but it was there.

There are lots of economists who will tell you the debt would be lower, because austerity contracted the economy whereas borrowing and spending on infrastructure etc would have boosted it.

Yes, but they are talking rubbish, because the money is never used to grow the economy efficiently. Poor allocation of government spending sees to that.

There are also lots of economists who claim there is a "mystery" why UK productivity seems to be constantly falling or staying static while GDP keeps increasing, amongst other things.

There are a lot of economists out there who are just politicians in thin disguises.

Keynes had it all wrong?

No he actually had it right in my opinion.

But no government in recent memory has followed Keynesian policies.

Because people always seem to conveniently forget about the flip side of Keynes. Which is that governments are supposed to follow the swing and expand and contract their economies accordingly, rather than just spend all the time.

If governments spending money and running up debt is so good then Rachael Reeves should be congratulating the Tories for leaving a 21 billion black hole. Not complaining about them.

Or is it that spending and running up debt is only good when we are doing it ?

She will do what is necessary because of what she inherited from the most corrupt, incompetent, self-serving government that this nation has ever had.

When are they going to realise that people just don’t have the money? Even DH and I are starting to feel the pinch and we take home approx £5550 per month between us (after tax)

Cut your costs then. We live very very well on 3k.
Reality checkpoint needed here. Try the IFS " where do I stand" site. Illuminating for the well off complainer.

But it is not this black and white.
The part of the country is relevant to whether you can live well or not with any income.
Plus people have debts, previous and current financial commitments that mean they cannot move or they need that extra income to pay. Plus, what about peoole with young children? The difference in income that you are refering too could very well be taken up by childcare costs.
I do think the whole country is feeling the estate we are in. Financially, healthwise and morally. And we will have to pull ourselves out of this hole by our own boot straps.

The main issue in considering Keynes's ideas on capital expenditures is whether spending on health and education actually provides a macroeconomic boost compared to infrastructure, etc.
Engineering and construction have been in recession since the beginning of this year. Material prices are over 40% higher than in January 2020. Where are these 1.5 million houses and who will provide the necessary impetus to start the election promises?
Blair came in and there was an air of optimism, this government is like a funeral dirge. The Tories are out, we need more positivity and action. What's done is done.
They need to get on with it rather than moaning about the right-wing or £20 billion in a £2 trillion-plus economy.

Not saying it's black and white. Indeed the very point is that it's relative, and "feeling the pinch" looks very very different on a high income.

I am sure you do. Hoarding your wealth in your property are you? Hypocritical at best. High horse to boot.

Part of the problem with the economy is indeed feeling the pinch.
People whi feels the poch stop spending, cut down on leisure and other desirable but unnecessary items.
Now, how does that help the UK's economy?
It does not. It suffocates the economy. The ones that suffer more are the ones worling in pubs, coffee shops, restaurants, theatres, cinemas and so on.
The solution to financial issues is not making the citizens spend less. I think many economists do agree with that.

Sorry, lol "people who feels the pinch" is meant to say there.

Plenty of countries didn't do 10 years plus of austerity and don't have higher debt levels than we do, yet have far better public services.

Austerity meant cutting mtce on buildings, cutting staff, pay and tax TH freezes - ALL of this is coming home to roost only instead of 2010 prices we will pay out far more, as we borrow money on higher interest rates, instead of the zero rates of the 2010's

However you cut it, no one can possibly say the Tories have managed the economy well, we have massive debt and nothing to show for it, the 100s of billions spent have ended up with banks and energy companies.

Such was the shortsightedness of Austerity, we now have Hospices cutting staff and beds, as the Tories even cut Hospice funding :(

meanwhile HSBC made $33billion in profit last year, just one bank.

There is a lot of talk about fair society and Scandi model.

I wanted to share this link - really good description
DI_The-Nordic-social-welfare-model.pdf (deloitte.com)

"Many public services and benefits in the Nordic countries are provided to the entire popu lation for free, or at a reduced price, independent of market mechanisms (see figure 4 on page 12). Free and equal access to these social services is the core universal principle of the Nordic model. Access is not based on the ability to pay, nor economic need."

" the size of public pensions in Norway, Sweden and Finland depends directly on how much the individual has earned and contributed to the pension system. "

"The Nordic countries all have employment rates above 70 per cent, and most land near the top of the list of OECD nations (figure 6 on page 13). Iceland and Sweden, in particular, stand out with employment at approximately 85 per cent and close to 80 per cent, respectively. "

"How do the Nordic countries achieve these high employment rates when they offer such generous social benefits, which are not limited to the poor? Why don’t more individuals simply take advantage of the broad social security net? The answer seems to lie in the gradually ‘tougher’ policies the Nordic countries have adopted, which increase incentives to work in various ways and balance the provision of social security. For instance, the unemployment benefit period has been progressively reduced, as has the amount of compensation"

There is no IHT in Norway and Sweden, I didn't check the rest.

The entire debate in Britain is about redistribution. In Nordic model EVERYONE pays in and EVERYONE get services, not means tested. Of course this leads to much more equal and fair society. But to try to move this way here we'd need to make all benefits (WFA, childcare, child support etc etc) non-means tested, increase taxes at the bottom and make UC time limited. Anyone up for it?

I don’t think people forget. But we’ve been through the GFC, technical recession and general poor economic situation and there hasn’t been any investment spending. Modern rhetoric from the government is very much along the lines of the economy as household budget, a Thatcherite view.

This. It makes me laugh when people bang on about all these other countries and the Scandi model. They hold it up as some utopia to say fuck you to the higher earners. The hilarity is - they don’t understand it.

In simple terms - everyone pays in and everyone has access to services and subsidies. No removing childcare/benefits/care from higher earners. They pay in - they can take out. Pensions are linked to your societal contribution.

I absolutely think that’s how it should be. However many on here who proclaim so don’t actually understand it. It wouldn’t be higher earners paying more - it would be everyone else. People get angry and bitter about those same higher earners potentially having access to anything universal. Many here don’t work and would sink under the Nordic model.

It can’t be a fair society as far too many people are envious and always expect someone else to pay. There is a huge productivity issue and not enough people paying in. The result? Too few funding the pot and too many people expecting someone else to sort/fund it. Hence why we have the societal issues we have. Different mindset.

What about Roosevelt’s New Deal in the 1930’s.

@nearlylovemyusername Here we agree, the removal of contributory benefits, has been disastrous.

I ve been a higher rate tax payer, yet had i needed JSA/UC, the rate i would have got would have been exactly the same as someone who has never worked.

European systems are far fairer in this regard but still have a floor, no one gets nothing at all.

I can't see costs going down with 'elite border security', deportation flights, increasing numbers, any payment to take back people. and 'smash the gangs'

You can spend to reduce costs but not by becoming more attractive. You just get a merry go round of 500 to 700 arriving a day and processing and dealing with everyone in some way

Do you think it should have been completely free from the beginning or do you think there could have been charges for some part so that families could have budgeted and saved from the start?

Since 1948 charges have been imposed for some items. The State pension is lower than other countries to take into account the free NHS, yet older patients do not benefit from the NHS except in emergency situations.

When you look back over the years, the NHS was never prepared for the number of patients it has now. In the early 1950s the hospitals in London could not cope with the London smog; there were so few beds that thousands of people died at home from respiratory failure. The amount of monetary loss from people being off work is incalculable. A few years later they could not cope with the polio epidemic, and since then they have not coped with other events.

Successive governments have never met the needs.

The NHS is trying to be all things to all people

no government will stop immigration without a real desire to , it’s all tinkering around the edges

i am sure the new government have high hopes but when you get there and try and run it all , they will quickly find there is not enough to go around

people I know that run small companies quite often have employees that purport to be able to run things better , but never are they prepared to start up them selves

Do you think it should have been completely free from the beginning or do you think there could have been charges for some part so that families could have budgeted and saved from the start?

It has to charge, GP and AE visits would be a start.

Since 1948 charges have been imposed for some items. The State pension is lower than other countries to take into account the free NHS, yet older patients do not benefit from the NHS except in emergency situations

Really? the NHS is full of the elderly & not having emg treatment either.

When you look back over the years, the NHS was never prepared for the number of patients it has now. In the early 1950s the hospitals in London could not cope with the London smog; there were so few beds that thousands of people died at home from respiratory failure. The amount of monetary loss from people being off work is incalculable. A few years later they could not cope with the polio epidemic, and since then they have not coped with other events

Smog was man made, Govt failed not the NHS, The NHS coped with Polio and it coped with extremely well with at least 2 Flu outbreaks.

The Tories ran down PPE stocks and public health funding from 2010 but no health service can cope fully with something like Covid, but decades of underfunding compared to European healthservices doesn't help, neither is idiotic policies like charging AHP students 50k to train, coupled with super hi interest and loan repayments.

A better comparison would be how well did the UK and the world cope WITHOUT national Health Services in 1918 and that Flu pandemic?

Labour could do so much to improve the UK but will they?

Why would anyone want to stop immigration?