If Labour raises taxes what will you think?

[functioningagain]

Typing on my phone so not sure I can do a poll? But, if the government raises income tax or NI at the budget, will you think:

A - let’s get real, they had no other choice
B - those duplicitous / inept bastards

Thing is that austerity didn’t repair the black hole in the state’s finances. The majority of economists are clear that it was the wrong approach.

You said Labour handed over a stable economy. You were wrong. Both parties recognised the need for austerity and as you saw in my post, Darling specifically referenced upcoming deep cuts to public services. The public obviously didn't trust Labour to implement that so they lost.
Are you saying that the "two parliaments of pain" and Darlings's promised cuts "deeper than Thatcher's" would have been better under Labour? That just doesn't wash.

I didn’t mention the economy. I said a stable country. 🤷‍♀️

@Blossomtoes

Take a look at:

https://www.theguardian.com/commentisfree/2015/may/09/liam-byrne-apology-letter-there-is-no-money-labour-general-election

Austerity started under Labour in 2008.

We would have had austerity whichever party had won the election. That's what the campaigns were all about. That is not stable.
Its wrong to say we only had austerity because of the conservatives.

Surely there needs to be an update to that debt chart on every thread.

We’re paying huge amounts in debt servicing rn.

It really didn't. National debt was high. Even the potential Labour leadership promised "austerity". Leading economists were all saying the 2008 crash would lead to take a decade to get us back to where we were before it financially. The country was in dire straits.

But we didn’t take a decade to get us back to where we were before it financially. The country was in dire straits. The debt just kept growing. If austerity had killed the debt it might have been worthwhile. Try and find an economist who thinks austerity is the right approach to national debt.

@Blossomtoes

Try and find an economist who thinks austerity is the right approach to national debt.

Labour’s policy to spend money the country doesn’t have it not working out. The October 2024 budget was meant to plug the black hole that was inherited. So, what’s the excuse for the upcoming budget on 26 November?

Unemployment hits 5% for the first time in a decade.

As for economists, take a look at:

https://www.theguardian.com/business/2017/jan/05/chief-economist-of-bank-of-england-admits-errors

I’m not talking about some random economist post Brexit. I’m talking about the effectiveness of austerity in reducing the national debt 15 years ago.

I fully agree with you that the Tories were largely ineffective in reducing national debt, for several reasons:

Firstly the Tories started to row back from austerity measures after the first couple of years as they saw how electorally unpopular it was and they wanted to get re elected.

Secondly the economy was negatively affected by both the Brexit vote (creating uncertainty) and the actual Brexit.

Thirdly national debt truly ballooned after £500 billion was spaffed away on COVID measures.

The situation we are now in is:
Labour can't make any meaningful cuts in spending as their back benchers will rebel against the government (as happened on WFA and PIP).
Labour can't significantly borrow any more money and increase national debt (as Liz the lettuce found out) plus Labour are already running a deficit.

Which only leaves increasing taxation. The problem with this is that increased taxation negatively affects economic growth and productivity. This in turn means lower tax revenues which necessitates further tax increases and so on in an "economic doom loop" which we are already seeing with the recent increase in unemployment.

Keir Starmer explained it as " you can't tax your way to economic growth ". I prefer Churchill's quote which was

"a nation trying to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle"

The Tories have a nasty habit of flogging off our national assets to their wealthy donors and also to overseas investors. That does little to help our economy in the long-term.

Also, most of the "millions at the bottom" economy-wise are in employment! Only a small minority of the economically inactive are long-term unemployed. Some are retired (including those who were able to retire early), others are too unwell to work and others are students, stay-at-home parents, or carers for relatives.

If I felt for a second that is was being spent appropriately, I would say A. But unfortunately I don’t think it is so B

The Tories have a nasty habit of flogging off our national assets

Three words. Labour. Gold. Reserves.

They REALLY really need to look at welfare reform. I want more cut backs where unnecessary spending is going! I would prefer that they looked at inefficiency rather than simply taxing us more. We are all quite stretched as it is.

@HeadDeskHeadDesk

Three words. Labour. Gold. Reserves.

I will add another two:

Gordon Brown.

@PeonyPatch

I would prefer that they looked at inefficiency rather than simply taxing us more.

That would be the logical approach, but it requires effort. Raising taxes requires zero effort and not felt by MPs on a £94K salary plus expenses.

After they become tired of being an MP they may move into a rest home (house of lords ) where there are no fees to pay, but receive attendance bonuses of £371 per day.

Exactly!!!!!

The problem with that is that what you deem as unnecessary Government spending someone else deem as absolutely essential, plus as we saw with austerity under the Con /Lib coalition the losers are always a lot more vocal than the winners.

Secondly saving £2 billion here or there is really not going to make much difference when the annual deficit is £150 billion. What is needed to genuinely make a difference is radical measures that the majority of voters would never agree to.

But that could be one of the radical measures that would cut the deficit, e.g:

• Cutting benefits to those who do not need it and abuse the system
• Making Child Maintenance Payments mandatory
• Cutting cash in hand work
• Reducing wastage within the public sector I.e. NHS (I get that that is a whole other ball game though)

There are likely many, many other areas of government spending that could be reviewed.

I think increasing taxes is lazy, and unfair to many of us given it’s a cost of living crisis.

If they are going to raise taxes, I’d like to see better services.

• Cutting benefits to those who do not need it and abuse the system

How do you decide who those people are?

• Making Child Maintenance Payments mandatory

How do you stop those people from hiding their income or moving on to benefits?

• Cutting cash in hand work

How do you do that when customers prefer it because it costs them less?

• Reducing wastage within the public sector I.e. NHS (I get that that is a whole other ball game though)

How do you determine what’s waste?

It’s all much harder than posting on MN.

It’s all much harder than posting on MN.

I understand that, but it’s a discussion board. I’m not a politician or an economist…

Clearly.

Are you going to add anything valuable to the discussion or do you plan on continuing to be goady?

You’ve added nothing of any value, it’s hardly “goady” to point it out.

The economy is an absolute shit show and any government would be in big trouble now. Sunak knew it would be like this which is why he essentially threw last year’s election. Why we really need now is a coalition government with all the best talents working together to get out of this mess with minimal damage to public services.