‘22bn black hole’

[EverythingAllatOnceAllTheTime]

Labour refuses to disclose key details of alleged 22bn ‘black hole’.

What is it with Labour? They seem hell-bent on implementing some bonkers tax rises, premised on some very dubious data.

Their latest rental reform proposals are also utterly daft, and will deliver the opposite of what they are trying to achieve.

People are forgetting the £22 billion is EXTRA deficit, not the deficit. Spending had exceeded income by tens of billions virtually every year for the past 25 years. Forecasts already showed tens of billion deficit this year, the £22 bn is on top of that. Too many people seem oblivious to that and are making out them£22 by is the only shortfall. The reality is the country is £2.5 trillion in debt due to overspending over the past 25 years! The problem is a hell of a lot bigger than £22bn.

There is also the refusal to show or prepare an impact assessment for the WFA removal

They did in 2017 in opposition but not now they are actually bringing it in

And IoD and CBI warning that they are too much impacting investment and business

And the 'black hole' stuff

This is where some of its gone.

https://ifs.org.uk/articles/home-office-budgeting-and-asylum-overspends

If you look at the bar chart in your link (Figure 1. Change between planned and actual Home Office day-to-day net spending...)

• the IFS have calculated a £4.2 billion overspend for 2023-2024 ('In 2023–24, it spent £4.2 billion more than planned...'). The estimate for 2024-2025 is only slightly lower (the backlog of asylum seekers hasn't disappeared).

Labour can't say they didn't know about the overspend because they carried out similar analysis themselves back in February this year;

28 February 2024

Hotel costs for asylum seekers overspent by £4.3 billion last years figures show.

The total amount spent on hotels and support for asylum seekers ballooned to £5.4bn in 2023-24 – a huge overspend on the Home Office’s £1bn budget for asylum support, resettlement and accommodation, Labour analysis of Treasury figures suggests.

Shadow Home Secretary Yvette Cooper said: "This lays bare the complete chaos the Tories have created in the asylum system..."

"Labour has set out a clear plan to save billions of pounds for the taxpayer..."

Labour’s figures came from analysing supplementary estimates from the Treasury.

https://inews.co.uk/news/politics/asylum-seekers-hotel-overspend-treasury-2931907?srsltid=AfmBOor0MdYFIWRZNgK66fJmlUdjI12XladHj2xsh7oK-IbrGUXyhcGv

Oh yes, @Clavinova . When your people were in charge.

"Labour has set out a clear plan to save billions of pounds for the taxpayer..."

Expectations are high.

Labour can't say they didn't know about the overspend because they carried out similar analysis themselves back in February this year;

I think you’ll find they can, given that neither the IFS or the OBR were privy to it until after the election.

That's odd - it was reported on GB News in February as well;

https://www.gbnews.com/politics/labour-slams-sunak-asylum-system-chaos-overspend

The problem for the new government is that it inherited a position where asylum costs this year appear to be on a similar scale to those seen in previous years, but the Reserve has already been spent elsewhere.

How could anyone know in February that this year’s Reserve had already been spent elsewhere? That money wasn’t even available until April.

Final salary pension schemes are pretty much gone in the public sector now anyway, aren’t they? It’s career average now.

You missed out the next sentence;

This was to some degree predictable but is no less of a fiscal headache for that.

Also;
A key plank of the new Chancellor's argument was that these costs were genuinely unexpected and could not be met from within the departmental budgets she inherited from her predecessor.

Labour knew about the Home Office overspend.

The government didn’t know the entire year’s reserve had been spent in three months. Nor did the IFS. Or the OBR. The Home Office spent its budget and the reserve before the election.

The 2024-2025 figures are estimates - the Home Office doesn't appear to have requested the extra funds yet;

When Rachel Reeves pointed to a £6.4 billion in-year spending pressure on the asylum system, she was in effect pre-recognising the top-up that the Home Office was banking on receiving later in the year.

Why can't the government delay or cut some of this funding if they are so cash-strapped?

Ed Miliband: Labour will honour pledge of £11.6bn in overseas climate aid.

The Tories were preparing to ditch the pledge, according to the former minister Zac Goldsmith.

https://newsrounds.econaiplus.com/ed-miliband-labour-will-honour-pledge-of-11-6bn-in-overseas-climate-aid/

Over half of this money hasn't been spent - the pledge was made before we started sending billions to Ukraine and before the energy crisis.

The 2024-2025 figures are estimates - the Home Office doesn't appear to have requested the extra funds yet;

Then why does the IFS say it’s already spent?

Unspecified 'spending pressures elsewhere' -

The problem is that this time around, with major spending pressures elsewhere, there does not seem to be enough left in the Reserve for such a top-up.

Former senior economist Andy Haldane told Sky News that Rachel Reeves's comments earlier this summer had spooked consumers, businesses and investors.

He said: "The black hole event was unnecessary and probably unhelpful economically.

"It's one thing to reveal a black hole, if that indeed is what it is. But just leaving that to sit for three months I think was a bad idea."

Asked what the government should have done, he said it was "much better to say nothing until you provide solutions".

https://news.sky.com/story/chancellors-black-hole-claim-unnecessary-and-unhelpful-says-ex-bank-of-england-economist-13213523

I would like to know exactly how much the treasury spend on public sector defined benefit scheme...that can go for a start

The black hole is probably the doctors pension scheme with the huge increase in pay and therefore employer pension contributions and payments. Thats down to us of course. Or a new black hole.

“The UK’s whole of government accounts for 2021-22 – which consolidate the audited accounts of over 10,000 organisations across the UK public sector – show the public sector pensions liability stood at £2,639.1bn, or 42% of the UK’s total liabilities.”

But you also need to incentivise people to take up public sector roles like nursing, midwifery, police, armed forces etc etc. The pension is a big part of that incentive.

I think they are on track to crash the economy come oct. Terrifying.

If you were writing a drama about how to destroy a progressive party that was close to taking power, you'd probably write the last 7 years of what's happened.

The anti-Corbyn mobilisation of the establishment, including a section of the Labour Party had "A Very British Coup" vibes. The capture of the party by "Labour Together" & the rise of the unremarkable Sir Kier Starmer (member of the trilateral Commission) to leader, starts to make sense.

Between 1990 and 2022 billionaires in the UK increased their wealth by 1000%, an extra £600 billion. Last year the richest 1% held more wealth than 70% of Brits. That's where most of the "black hole" is.

I have not forgotten that Labour completely failed to speak a word of opposition to the money-swallowing lockdowns; did they even point out that lockdowns were burning vast amounts of money each day? As far as I remember, Labour cheered lockdowns on, complained that they did not go far enough, and grumbled extremely loudly at any talk of easing them at all.

So they have a certain complicity in the massive black hole, as far as I am concerned.

That's not what has left us buggered, it was the underlying weaknesses in our economy. If you compare what other G7 countries spent, you could argue we didn't use enough fiscal stimulus.

https://ifs.org.uk/articles/how-does-size-uks-fiscal-response-coronavirus-compare-other-countries

Of course it’s been years. The issue is with spending, not tax. UK already has high tax level.

Incentivise with pay by all means but not pay and gilt edged guarantee tax payer backed pensions and sickness policies that are totally out of whack with private sector. These are the not inconsequential hidden costs whilst public sector workers complain about their pay...so make it a level playing field and when people leave the public sector there would be no duty for the treasury/tax payer to have to continue paying out in some way.