Labour - is there any hope left?

[Selectivemute]

Life feels genuinely tough at the moment, and I am trying to remain optimistic.

But what has this Labour government actually achieved since July 2024?

Please tell me the positives, because I am struggling to see any, right now.

Well I'm sure that many Labour voters will think it's a great achievement that over 100 private schools have closed since they introduced VAT on education, to say nothing of the thousands of children who are no longer able to access education it the place of their choice.

None we are going to end in a extreme left or right wing nightmare.

I completely agree with the last paragraph. Thank you for articulating it far better than I did.

Anyone else watching Morgan McSweeney say he can't remember anything and doesn't know anything at the foreign affairs select committee?

This guy is extremely unimpressive - particularly compared to Olly Robbins last week - and he was Labour's number one adviser over the last few years

Yep it’s all pointing to Starmer still, Barton was good, committee probably realising the sacking of OR was off.

Surprised they need a vote to get KS there which Labour will avoid. They shouldn’t if there’s nothing to hide.

I’m listening and haven’t heard him say anything of the sort.

Ah yes, the get out jail free card of "can't remember".

If these high ranking people have such bad memories, they should never have been given such senior positions.

It's like the old Chief Fire Officer for London who, at the enquiry, "couldn't remember" anything about her attendance at the Grenfell Tower Fire. Funny how the highest ranking fire officer couldn't remember anything due to the trauma etc., yet most of the lowly fire(wo)men who actually fought the fire and rescued people had really good recollections of what they did, what they were told, etc.

He's literally said both more than once in the last 5 minutes.

Even Emily Thornberry almost lost her rag with him.

He did keep all the details on his phone but what bad luck - his phone got stolen and nothing was saved to the cloud

I wonder if he took inspiration from Johnson and Sunak?

Unfortunately the reality for Labour or for any other political party (as we saw with the Conservatives) is that economically there is not a lot they can do whilst still being in political control. If the Conservatives were in power I don't think that they would be doing that much different. If the Greens or Reform were in power things would be a lot worse. And if the LibDems were in power then no one has a clue because no one knows what their policies are.

Government spending is in excess of Government income yet voters still want more "free stuff ".

There are three ways a Government can finance its spending:

1. Increase taxation- but this is already at a post war high, and as we saw with the employer NI increase, raising taxes slows economic growth.
2. Increase debt - again this is at a record high and as Liz Truss found out the hard way it's not possible to increase it much more.
3. Cut spending on some areas to increase on others - as Rachel Reeves found out the hard way this is impossible due to Labour backbencher rebellions.

So that leaves us with tinkering around the edges and a managed slow economic decline.

The only solution economically is to slash Government spending, cut taxes which will grow the economy, but the reality is that politically this is impossible.

So if you vote Labour, you know what you'll be getting (more of the same). If you vote Conservative then you'll be getting a similar outcome with a bit less Government spending and a bit less tax but pretty much the same.
The Green's economic solution is to just print more money which didn't work out to well in Weimar Germany or in Zimbabwe.
Reform's policies are completely unfunded with no answer on where the money is coming from.

But I will leave with my favourite quote from Alexander Tytler from the late 1700's:

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy".

With the tax

Surely the whole point of having experts is that somebody will have an overview of the whole system and can simplify it

It shouldn't be hard

I didn't know there was an office in charge of that but it sounds like they just took the opportunity to make some money!

I don't know how it compares to other countries, but everything just feels hopeless maybe everything is hopeless in other countries too

What's in the UK-India trade deal? | Money News | Sky News

what are the specific benefits from the deals with EU and India?

I'll wait for better experts to comment, but my view is that India... had us?
Our trade deficit with India is over 10bn. They reduces duties on out whisky and gin, but we gave them near 0% duty on textile. In terms of volume and value these aren't quite comparable.
Indian workers aren't subject to NI, incl employer's NI. UK workers won't pay similar tax in India, but again, how many Brits go to work to India and how many Indians are on work visas here? This seems to be a significant undercutting of UK labour, especially in context of increased NICs.
So overall I'm struggling to see any benefits of this deal for UK, apart from a few spirit makers.

Things feel a bit hopeless because people can see the reality of a managed slow economic decline and things aren't that different in other European countries - some cases slightly better (Poland) some cases worse (France).

The problem is that the only way out of this doom loop is harsh economic medicine that no one will want to vote for.

For example preferring the Green Party solution of let's just print money or the Reform Party solution of sound bites but no explanation of where the money is coming from.

I think you're mistaking him for Liz Truss. She is most certainly the worst.

I have been politically homeless for over a decade. I spent years spoiling my ballot paper as it is the only way to register "none of the above", but it is too important now lest we get the likes of Farage in the big chair (although there chances he would just resign having disrupted are quite high, and if he didn't I would probably quite enjoy him having to be accountable rather than just shouting bullshit. He would probably be able to take the crown from Truss for worst PM ever!)

I don't read any of the comments here as trying to make Labour look successful, certainly my comments were not meant as such. It's just that if one is to be taken seriously, the upsides have to be recognised as well as the downsides. Otherwise the point of view becomes less credible.

Someone with a wage of £20k pays the same tax as a pensioner with total income from pensions and savings interest of £20k.

They already do. Tax on interest is already the same as on income and is now subject to 2% increase, so equivalent of NI.

Tax on dividends is marginally lower, 35.75% vs 40%.

The main difference is CGT, but before you start crying "let's make it equal to Income Tax" pause. Investment in capital always incurs risk. You invest your money understanding that you may lose everything. Be it buying shares or building your own business. Why would you do this instead of putting everything in bank savings account? Can you see the consequences for economy?

Some of Labours achievements to date - I could go on.

• A significant increase in unemployment -
• youth unemployment higher than in the Eurozone for the first time in recorded history
• highest tax burden in decades
• increase in budget deficit for 25/26 from £77bn projected by OBR at the time of the last election to £132bn
• highest government borrowing costs in the G7
• significant increase in our public debt
• highest industrial energy prices in the developed world, causing rapid deindustrialisation
• massive expansion of the public sector
• pay increases in the public sector roughly double those in the private sector - welfare budget out of control
• providing incentives for personal irresponsibility and welfare dependence
• reintroduction of blasphemy laws to protect only one ideology
• attempts to cancel elections
• encouraging a significant and very damaging exodus of economically productive people
• damaging, possibly fundamentally, our most important defence, strategic and economic relationship
• damaging the education of thousands of privately educated children for no reason other than politically motivated spite, which is likely to be a net cost to the state
• failing to do anything to counter the most disgusting outburst of violent and shamelessly overt anti-semitism in decades

Nope, the pensioner will get the first £18,570 completely tax free due to the respective £5k and £1k savings allowances. The extra 2% income tax doesn't apply to pensions nor interest. The worker pays 20% on everything over £12,570 and pays employees NIC of 8% on wages over £12,570 too. There's actually quite a substantial difference between the two hypothetic people.

Re investments, the investor will be hoping to make a lot more profit than they'd make if they left the money in the bank savings account. They're not doing it just for tax reasons, they're doing it for higher rates of return.

So in your example the person who earns a million pounds from wages pays the same level of tax as the person who earns a million pound's from investments.

The person with the salary will always get an income and will be taxed on this (for maths let's assume 50% tax).
But what happens when the person with the investment actually loses a million pounds one year - do they a) get a 50% tax refund on their losses - in which case you will encourage the highest risk / highest returns investments or b) no tax refund on losses - so what's the point of investing when you get taxed on the upside but no tax relief on the downside?

The problem I find is that no one looks at or cares about the secondary impacts of such fiscal policies.

No problem with offsetting losses against income. It's exactly what happens with business losses and property letting losses. Business losses of a sole trader can be set against their other income or carried forward (or back a year). Losses from property letting can be set against future profits from property letting.

Limited company losses can be set against any other income or can be carried forward and again carried back a year.

Capital losses on investments can already be carried forward against future capital gains or carried sideways to set against gains of the same year.

No problem.

You're seriously talking about tax changes on this level of income? ok, pensioner has a few hundred tax benefits. Vs working age person who doesn't even work FT because 20k is about 75% of NMW FT. Got it.

The extra 2% income tax doesn't apply to pensions nor interest.
It does - from 6 April 2027, UK tax rates on interest (savings income) will increase by 2 percentage points, setting rates at 22% (basic), 42% (higher), and 47% (additional).

Re investment income - @1dayatatime has just answered this beautifully.

People will vote at the local elections and show their views on all this, you’re probably not far off.

If people want fairness/equality and a simplified tax system (as to the posts I was replying to) then, yes, we'd need the tax system to be simple and fair and equal. The moment we start putting in place different rates, different allowances, etc for different ages/types of people and different types of income/gains, we're immediately back to an overly complex tax system ripe for abuse/loopholes, etc. This is exactly how we got to a stupidly complex tax/benefits systems in the first place - because different groups of people lobbied for "special" rules for themselves.

Agreed, and Labour will then tie themselves in knots, trying to decide how they are going to deal with a problem like Starmer. Instead of governing.

On a brighter note, hopefully ‘less government’ will mean fewer damaging policies.

As for "a few hundred tax benefit", it's actually closer to £1800 for the current tax year, between a pensioner with income of pension/interest compared with a worker's wages, on a total income of £20k for both. That's huge! And completely unfair/unjustified. Same income should mean same tax. Regardless of circumstances.