Rachel from accounts has crashed the economy

[Almn0etd]

So borrowing costs are now even higher than when Liz Truss was around.

The economy is well and truly cooked and in a far worse shape now that Rachel accounts is in charge.

Why isn’t this dominating the news cycle? Because it’s Labour.

The Tories were atrocious. Labour are an indescribable disaster for this country, surpassing the lowest of the low bars. Cue Labour apologists who don’t mind being made poorer and having the country destroyed, as long it’s Labour doing it to them.

As the pp said but your last line answers your first too.

Regulation and reliance on FS made us risk exposed and they are Gov decisions. Also PFI. It was one long period of putting growth on risk or credit

My mistake. I always assumed under New Labour that they rose taxes to pay for public investment? I read stuff that the NHS was actually good under new Labour and wait times were fine. Guess that probably was due to PFI which bankrupted us.

The U.K. was bouncing back but then it voted in a Tory government who decided to slam the brakes on the economy with austerity and it hasn’t recovered from that. Especially since they subsequently decided to commit the largest deliberate act of economic self harm of any government.

No that was due to labour pouring money into the service to help it recover from the cuts of the previous Tory government. Fairly certain there’s an OECD report on this somewhere. But

Labour also promised austerity in that general election!

Speaking of slamming on the brakes Reeves hasn’t gained on the early growth in the first half of 2024 but stalled it so far to 0

When they say ‘go faster and further’ I wonder what they mean. Maybe those cuts being talked about.

We weren't in a good place to withstand the global financial crisis. Some other countries weren't affected as badly and bounced back quicker. Arguably, the UK has never bounced back at all.

I'm pretty sure I've read that our recovery was poor due to the state of our economy, even if Labour didn't cause the GFC. I don't often see it referred to on here though.

Yes, in the first few years of the Blair / Brown govement public investment (as distinct to spending) was actually less than under the Conservatives in % of GDP terms, but that changed massively with the sleight of hand that is PFI, which kept the borrowing off the government's balance sheet. We are all still paying for that though... Taxes did rise, to eliminate the deficit and to fund revenue expenditure.

That bust was worldwide

And? Where is the post that says otherwise

Just read that Curry's are planning to offshore more jobs due to the NI increase.

So when was the economy ever good?

If labour had been more strict with bank regulation we wouldn't have had the 1997-2007 boom?

There is no reason to blame Labour for it.

As I said the gov were responsible for high risk exposure, you can read the post.

So don't buy stuff from Curry's.

Don't bank with a bank that has offshored all of the back-office functions. Don't get your drugs from Boots, who have their HQ in Switzerland in order to reduce their tax bill (i.e. deprived the UK tax coffers of billions over the years). Don't buy cheap stuff made in sweatshops in countries far away. Don't buy a vacuum cleaner made by a company whose owner thought Brexit was such a great idea that he moved production and the company HQ to Singapore.

Consumers can also play in the big game of Capitalism. If one person decides not to drink in a pub owned by a certain Brexit-supporting foghorn, he probably won't bat an eyelid, but if the 16 million people who voted "Remain," and those millions who now think that Brexit has been a mistake, boycott his pubs he'll perhaps have a different reaction.

Capitalists forget that ultimately the consumers are key to the system. No customers means no business. A (probably apocryphal) story from the car industry illustrates the point very well:

When robots were first introduced in a UK car factory, the manager took the union officials on a tour of the facility.

"How are you going to get these to go on strike?" the boss crowed.
"How are you gong to get them to buy your cars?" the union officer responded.

Ok so the reason the Labour government is stuffed now is because they cannot borrow any more money. The bond markets are sending a signal that they have borrowed too much and bond yields will spike if they try going down that route.

Now wind the clock back to 2010. If the Tories hadn't done austerity then, where would the debt to GDP actually be now ? Probably a lot worse. If Corbyn had got in instead of Johnson, with his ridiculous budget prior to COVID it would be even worse.

The irony is again that Labour are now going to have to do austerity now, in the same way the Tories had to in 2010 after the GFC. Starmer is already signalling this.

My guess is that it is going to be a case of Tory austerity bad, Labour austerity good though from Labour supporters.

Yes, but Labour spent over a decade toxifying austerity so I await the new glossy spin on it coming in the autumn. Perhaps it'll identify as something else?

Sorry, not autumn...March now, isn't it?

Yes you're right. I wonder what new name they will come up with for austerity #2??

So in summary, you are happy with thousands of (probably low paid) staff losing their jobs because it suits your ideology. Gotcha 👍

I think the main issue is that austerity, whether you agree with it or not, is a core part of Tory ideology.

Whereas it is not a core part of Labour ideology, in fact they are against it.

There is an argument that borrowing to invest will grow the economy. But somewhat ironically the Tories who believe more in the ideology of austerity are better at this than Labour.

One of the reasons the markets hold a cosh over Labour on borrowing is due to the perception that they will borrow large amounts and funnel it to day to day spending, basically boosting things like public sector wages rather than investing in infrastructure to boost growth and productivity.

I think part of the reason why the markets are so unsettled at the moment is the fact that Labour went in for big public sector wage rises pretty much from time zero. Basically sending a message that they are going to do exactly what the markets feared they would - and reinforcing the idea that Labour will borrow to funnel money towards the less productive parts of the economy.

So they have that dual problem in convincing their supporters that there is going to be a hold on spending and that that is a necessary and good thing, while convincing the markets that any borrowing they do do is going to be used to increase productivity.

So far they have not got off to a great start.

Had Labour won in 2010, they themselves would have done austerity.

Which makes me wonder why didn't we just do Keynesian deficit spending to get us out of a slump and then cut after the economy recovered

@TheNuthatch So in summary, you are happy with thousands of (probably low paid) staff losing their jobs because it suits your ideology.

You've totally misunderstood. If you want to protect these jobs, then take your custom to companies that don't offshore their jobs, or that pay into the UK tax kitty rather than moving their profits and tax payments elsewhere.

People are already losing their jobs as these are being offshored - the vacuum cleaner company reduced their UK workforce by another 1,000 in the summer. Thousands of low-paid call centre and back-office jobs have been offshored over the last 15 years. Manufacturing jobs have long since gone to lower-cost countries - and the last government (actually Badenoch) signed a hugely damaging trade deal with the CPTPP countries which will allow tariff-free imports from countries with far lower cost-bases, far lower environmental, safety and employment standards. What could possibly be the impact on the remaining British jobs?

Other people are losing their jobs (or not being employed in the first place) because companies are organising themselves in such a way as to pay as little tax as possible in the UK. One of the major issues facing Reeves is that everyone wants to see better healthcare services, schools that are not falling down, fewer potholes, better public services etc. but nobody is willing to pay the tax required to pay for the people and materials to make these improvements - and while ordinary people can moan about their individual tax burden those who can afford to, whether companies or rich individuals, move their tax liabilities offshore. There isn't the tax revenue to employ the public sector employees - in fact people are being laid off - so public services continue to deteriorate to the point where they are in danger of collapse.

Blair was a different context and if there’s a mention of a global bust then there’s the precursor the global boom, plus risk and credit during that time.

Also I don’t think he went for the private sector in the same way as Starmer / Reeves.

And it’s this failing which is contracting the private sector together with a hit from markets that might drive public sector cuts in March.

@Havanananana

If you want to protect these jobs, then take your custom to companies that don't offshore their jobs, or that pay into the UK tax kitty rather than moving their profits and tax payments elsewhere.

Where can I buy laptops, mobile phones, fridges and washing machines that have been manufactured in the UK?

Quite. Or for that matter, manufactured by a company that doesn’t do any tax planning.