The Labour Party under Andy Burnham

[GRALISTAIR]

He's been in office for just under two months. I think the way in which the WFP cuts were made was ill-advised, yes, but I think judging what is clearly a longer-term plan when he has only been in office for two months is unwise.

As Yes, Minister said, there is one year of getting to grips with the state of the country, the prevailing economic situation (which is always either appalling or catastrophic, and the full extent of which has been hidden from the nation and therefore the Opposition) and any impending crises that have also been kept secret. Then there are two years of serious government, and two years of swotting for an exam.

Hence, unless they've done something catastrophically awful, making such sweeping criticisms of a very new government is like calling a horse race after a furlong. At the very least, I'd wait for the Budget.

I am not a Labour voter but this seems very fair. They deserve a chance and less than 2 months is not long enough.

 

[Busaholic]

Smith made the remark about Blair as a constituency MP.

He's been in office for just under two months. I think the way in which the WFP cuts were made was ill-advised, yes, but I think judging what is clearly a longer-term plan when he has only been in office for two months is unwise.

As Yes, Minister said, there is one year of getting to grips with the state of the country, the prevailing economic situation (which is always either appalling or catastrophic, and the full extent of which has been hidden from the nation and therefore the Opposition) and any impending crises that have also been kept secret. Then there are two years of serious government, and two years of swotting for an exam.

Hence, unless they've done something catastrophically awful, making such sweeping criticisms of a very new government is like calling a horse race after a furlong. At the very least, I'd wait for the Budget.

I'd cite two measures that were set to be introduced, but now won't be. One has had very little publicity that I know of, but was on page 2 of the Times over a month ago now. This was that when prisoners who were wrongly convicted and released after years of incarceration, their miserly 'compensation' would no longer have had a deduction for'board and lodging. This is outrageous and will save a pittance, yet it was virtually the first thing the Starmer government did. Has Starmer now welcomed Braverman into the Labour Party?

The second one is the Higher Education Freedom of Speech Act, passed last year, and due to take effect within a few days. Bridget Phillipson, Eduxation Secretary, has indicated the bill 'would be' repealed (rather than the more democratically accurate 'should be' repealed) which resulted in a round robin letter to the Times by many academics, writers, freethinkers, etc. mostly women.

All in all, the fears of many, including a lot who voted for them recently, that this Labour government with its huge majority would become a threat to our liberties is beginning to take effect less than two months since its election.

Anyone who suggests either of these two things are caused by financial pressures would be a liar and a charlatan.

 

[takno]

I'd cite two measures that were set to be introduced, but now won't be. One has had very little publicity that I know of, but was on page 2 of the Times over a month ago now. This was that when prisoners who were wrongly convicted and released after years of incarceration, their miserly 'compensation' would no longer have had a deduction for'board and lodging. This is outrageous and will save a pittance, yet it was virtually the first thing the Starmer government did. Has Starmer now welcomed Braverman into the Labour Party?

The charges for board and lodging were scrapped by the Tories for new compensation claims going forward. That policy remains in place, and no new charges will be levied.

In making the announcement, the Tories avoided mentioning whether it would apply to historic compensation claims, but they didn't make any financial provision for it to do so. All that has happened since the election is that people who requested the deduction back retrospectively have been told that it wouldn't be paid. Labour haven't changed any policy, and it's entirely possible that no politicians were even consulted before the letters were sent.

The Freedom of Speech Act isn't a bad thing in principle, but aspects of it were deliberately designed to provoke culture wars rather than achieve any actual freedom of speech. Labour said throughout the campaign that they'd be killing off this act. As passed it required statutory instrument to actually enact it, and you can hardly expect Labour to actively pass a statutory instrument to enact an act they disagree with.

Moreover, the Tories could have passed the statutory instrument at any time between August last year and the election. The fact that they failed to do so strongly suggests that the act wasn't even workable as passed.

 

[YorkRailFan]

Having watched Starmer's speech this morning, he came across as a boring, continuation politician. No new, exciting policies, and he lacked any charisma to make up for it. His policy announcements were very similar to Cameron/Osbourne in 2010, but without any charisma.

I also thought he didn't receive questions well, with his replies not always actually answering the question, and he waffled quite a bit.

 

[Yew]

How long before we hear the words "Long Term Economic Plan"?

 

[Andyh82]

I can’t understand why you’d preview bad news but then not announce it for another two months

Surely that could damage the economy in the meantime?

 

[Donny Dave]

Shall we start a sweepstake? Which taxes will be raised, or altered in the budget to raise money?

I'm going to predict pension tax relief will be capped at 20% or altered so only so much relief can be claimed.

 

[brad465]

I can’t understand why you’d preview bad news but then not announce it for another two months

Surely that could damage the economy in the meantime?

Budgets take time and work to actually produce. The Chancellor might have an easy-looking job writing a speech and delivering it in parliament, but if a budget is to be done properly, every policy announced in it will have been run past advisors and civil servants for info on how feasible each policy is and how quickly it can be enacted. The OBR also run economic forecasts/assessments with every budget, and are so important that when Truss and Kwarteng tried to sidestep them, the UK markets reacted badly. Providing a warning is good for conditioning the public for bad news when you know in summary what comes out is expected to be considered as such, but the fine details are still being worked on.

That said while I believe there will be unpopular things announced, I do get the impression things won't be quite as bad being made out - better to get someone expecting the worst then it turn outs things are better than expected than to get someone underestimating the worst and being even more disappointed when the worst arrives.

 

[cactustwirly]

Budgets take time and work to actually produce. The Chancellor might have an easy-looking job writing a speech and delivering it in parliament, but if a budget is to be done properly, every policy announced in it will have been run past advisors and civil servants for info on how feasible each policy is and how quickly it can be enacted. The OBR also run economic forecasts/assessments with every budget, and are so important that when Truss and Kwarteng tried to sidestep them, the UK markets reacted badly. Providing a warning is good for conditioning the public for bad news when you know in summary what comes out is expected to be considered as such, but the fine details are still being worked on.

That said while I believe there will be unpopular things announced, I do get the impression things won't be quite as bad being made out - better to get someone expecting the worst then it turn outs things are better than expected than to get someone underestimating the worst and being even more disappointed when the worst arrives.

It sounds like it's going to be broken manifesto pledges, ie tax rises. And no change, a continuation of conservative policy of budget cuts and no economic growth.

 

[brad465]

It sounds like it's going to be broken manifesto pledges, ie tax rises. And no change, a continuation of conservative policy of budget cuts and no economic growth.

They didn't say "no tax rises whatsoever" in their manifesto, they ruled out raising specific taxes, namely income tax, VAT (other than ending the VAT tax break on private school fees) and NI. If they decide to raise any of these in October, then yes, they will have broken manifesto promises. This is why Capital Gains tax is coming up in the news a lot, as increasing this has not been ruled out and is one of the biggest taxes after the aforementioned 3.

Furthermore, manifestos tend to have a lot of ambiguous language in them that allows for a multitude of policy options to be implemented, without explicitly stating what they are ahead of an election. I can therefore see a lot of announcements technically not breaking manifesto pledges despite not being explicitly mentioned in them. I don't like that this is possible, but successive governments have always done it somewhere.

 

[Harpo]

Having despaired at the previous financial bleeding out of basics such as health, water, policing, local authorities, roads etc., while electoral cash bribes continued, my instincts were that we probably weren’t paying enough in taxes to fund what we really need and was braced for some ‘pain’.

Hopefully, whatever pain is coming I hope it is better considered and more holistic that the brutal winter fuel allowance axe which came with no accompanying mitigations such as abolishing energy standing charges.

Starmer has the in-tray and finances from hell and is clearly wicket-rolling business and taxpayer alike. I just hope his and Reeves’ conclusions and actions are much better thought through this time.

 

[edwin_m]

They didn't say "no tax rises whatsoever" in their manifesto, they ruled out raising specific taxes, namely income tax, VAT (other than ending the VAT tax break on private school fees) and NI. If they decide to raise any of these in October, then yes, they will have broken manifesto promises. This is why Capital Gains tax is coming up in the news a lot, as increasing this has not been ruled out and is one of the biggest taxes after the aforementioned 3.

Furthermore, manifestos tend to have a lot of ambiguous language in them that allows for a multitude of policy options to be implemented, without explicitly stating what they are ahead of an election. I can therefore see a lot of announcements technically not breaking manifesto pledges despite not being explicitly mentioned in them. I don't like that this is possible, but successive governments have always done it somewhere.

I believe the speech yesterday repeated the manifesto promise on income tax, VAT and NI, so that still stands.

Allowing speculation to run for a couple of months will probably result in all sorts of scary ideas being floated, so when it actually happens it probably won't be as bad as those rumours suggested.

Labour couldn't really be honest in the manifesto about what taxation was needed, because the Tories would have levelled even more tax and spend accusations than they actually did. Essentially Tories knew knew they would lose and were setting a trap and obliging Labour to raise taxes after the election - which they would also have had to do in the unlikely even of them winning. So it wasn't really a surprise when Labour announced the finances were worse than expected, but even if they strongly suspected that before the election it wasn't in their interests to say so.

 

[cactustwirly]

They didn't say "no tax rises whatsoever" in their manifesto, they ruled out raising specific taxes, namely income tax, VAT (other than ending the VAT tax break on private school fees) and NI. If they decide to raise any of these in October, then yes, they will have broken manifesto promises. This is why Capital Gains tax is coming up in the news a lot, as increasing this has not been ruled out and is one of the biggest taxes after the aforementioned 3.

Furthermore, manifestos tend to have a lot of ambiguous language in them that allows for a multitude of policy options to be implemented, without explicitly stating what they are ahead of an election. I can therefore see a lot of announcements technically not breaking manifesto pledges despite not being explicitly mentioned in them. I don't like that this is possible, but successive governments have always done it somewhere.

Kier Starmer said no tax rises at multiple points during the election campaign, and I knew they were lying about this.

This so called 20bn "black hole" has been created as an excuse to raise taxes as they know they messed up.

 

[Donny Dave]

Kier Starmer said no tax rises at multiple points during the election campaign, and I knew they were lying about this.

He said no income tax, national insurance or VAT rises, a bit different from no tax rises.

 

[Harpo]

This so called 20bn "black hole" has been created as an excuse to raise taxes as they know they messed up.

Given the outgoing governments difficult relationship with ‘the truth’ and the very small number of weeks since their dismissal, I’m more inclined to wait for some evidence.

 

[Magdalia]

There is a widespread lack of perspective about the winter fuel allowance changes.

The UK has more than 12 million state pensioners. Furthermore, demography means that this number will increase significantly over the life of this parliament.

About 1.4 million of those claim pension credit. Estimates of those eligible but not claiming are all less than 1 million. Altogether that's still less than 20% of all pensioners.

Estimates of fuel poverty are just over 3 million households. But about half of those are families with children, only about a quarter are pensioners. The number of pensioner households in fuel poverty is less than 1 million.

It isn't possible to estimate how many pensioners are in fuel poverty, but not claiming pension credit. But it is clearly not a big number.

At least 80% of winter fuel allowance went to people who did not need it, probably more.

 

[Merle Haggard]

Indirectly involved; but were private schools exempt from V.A.T. or just able to charge pupils without adding V.A.T. ?
If they were previously V.A.T. exempt the change means that they can now recover V.A.T. from all their goods bills which means (a) the tax take from them reduces in this respect and (b) their increase in price to pupils might be balanced by a reduction in costs.
Just puzzled, disinterested in the policy

 

[oldman]

This so called 20bn "black hole" has been created as an excuse to raise taxes as they know they messed up.

Many commentators pointed out before the election out that there was a black hole. It is true neither party was keen to point this out, but that does not mean it did not exist. The IFS puts it well:

Frankly, nobody comes out of this smelling of roses. Not the Conservatives who really did leave a lot for the new government to clear up, and were not honest about the challenges ahead. Not Labour, which knew the broad outline of these challenges, but refused to confront them in its manifesto and pre-election statements.

(Private schools will now be able to recover VAT so fees need not increase by the full 20%. I have seen a figure of 15% but I don't know how authoritative that is.)

 

[Magdalia]

If they were previously V.A.T. exempt the change means that they can now recover V.A.T. from all their goods bills which means (a) the tax take from them reduces in this respect and (b) their increase in price to pupils might be balanced by a reduction in costs.

This is broadly correct. But private schools costs are dominated by staff costs. Furthermore they won't be paying VAT on lots of their goods costs such as food and books.

 

[Merle Haggard]

There is a widespread lack of perspective about the winter fuel allowance changes.

The UK has more than 12 million state pensioners. Furthermore, demography means that this number will increase significantly over the life of this parliament.

About 1.4 million of those claim pension credit. Estimates of those eligible but not claiming are all less than 1 million. Altogether that's still less than 20% of all pensioners.

Estimates of fuel poverty are just over 3 million households. But about half of those are families with children, only about a quarter are pensioners. The number of pensioner households in fuel poverty is less than 1 million.

It isn't possible to estimate how many pensioners are in fuel poverty, but not claiming pension credit. But it is clearly not a big number.

At least 80% of winter fuel allowance went to people who did not need it, probably more.

I'm a pensioner who doesn't need the W.F.A. - in my defence I help a couple of younger friends financially and this forms (a small) part of it.

But to imply that benefits shouldn't be given to people who don't need it starts an interesting line of logic. Does a couple with an annual income of £120,000 need child benefit, for instance?

 

[cactustwirly]

Many commentators pointed out before the election out that there was a black hole. It is true neither party was keen to point this out, but that does not mean it did not exist. The IFS puts it well:



(Private schools will now be able to recover VAT so fees need not increase by the full 20%. I have seen a figure of 15% but I don't know how authoritative that is.)

The Black hole is basically the Labour government giving doctors a 15% pay rise and the cost of asylum seekers arriving on boats.
One of these was a deliberate Labour choice and they surely knew about when they gave doctors a pay rise

 

[Merle Haggard]

This is broadly correct. But private schools costs are dominated by staff costs. Furthermore they won't be paying VAT on lots of their goods costs such as food and books.

interesting, thanks. I realised it was only goods but overlooked the exemptions.
There might be scope for a tax-avoidance expert to convert some costs into V.A.T. - able (Sell - lease-back???) but that must be a niche line of expertise!

 

[Magdalia]

But to imply that benefits shouldn't be given to people who don't need it starts an interesting line of logic. Does a couple with an annual income of £120,000 need child benefit, for instance?

I wasn't implying anything, and I don't think there is a comparison between winter fuel allowance and child benefit.

 

[Yew]

The Black hole is basically the Labour government giving doctors a 15% pay rise and the cost of asylum seekers arriving on boats.
One of these was a deliberate Labour choice and they surely knew about when they gave doctors a pay rise

Could you provide some evidence for those assertions, please?

 

[takno]

But to imply that benefits shouldn't be given to people who don't need it starts an interesting line of logic. Does a couple with an annual income of £120,000 need child benefit, for instance?

You'd have to have an equal split in income and be pretty effective with gift aid and pension contributions to get child benefit as a couple earning 120k

 

[Merle Haggard]

I wasn't implying anything, and I don't think there is a comparison between winter fuel allowance and child benefit.

Sorry, & that wasn't the intention - just pointing out a line of argument - the sort used by people who do not understand the concept of society, i.m.o.!

== Doublepost prevention - post automatically merged: 28 Aug 2024 ==

You'd have to have an equal split in income and be pretty effective with gift aid and pension contributions to get child benefit as a couple earning 120k

I quoted £120,000 as the extreme; the information isn't entirely clear to me, but it seems that one parent can earn up to £60,000 (the other must earn less) and still receive full benefit. The full state pension (before the recent age-related changes) is around £10,000 - slightly below which basically is the cut-off for receiving the WFA benefit.

 

[oldman]

The Black hole is basically the Labour government giving doctors a 15% pay rise and the cost of asylum seekers arriving on boats.

The doctors' increase was a catching up after the 2010s with below-inflation increases year after year. This is one of the things the Tories knew they would have had to sort out eventually but they chose not to. Now of course they deny there was ever a problem.

Nuffield Trust:

By 2023/24, pay had fallen by 15.4% on average compared to 2010/11, ranging from 12.9% for doctors in core training to as much as 18.7% for second year foundation doctors.

 

[AlterEgo]

I'm a pensioner who doesn't need the W.F.A. - in my defence I help a couple of younger friends financially and this forms (a small) part of it.

But to imply that benefits shouldn't be given to people who don't need it starts an interesting line of logic. Does a couple with an annual income of £120,000 need child benefit, for instance?

No, and that is surely not controversial.

 

[Simon11]

No, and that is surely not controversial.

I would say it will depends and with all actions there are consequences.

With my partner, we together earn an income of £125,000 through different streams but still claim full child benefits through reducing our income lower enough through paying extra payments into our pension pots. At the moment, this strategy makes sense financially to ensure we have enough to live on now and ensure we are saving quite nicely for the future.

Should Labour change the rules around these areas, we will of course need to adjust our plan. However that is most likely to lead to reduce pension payments, spend more now and thus increase the risk of the Government needed to financially support us in our retirement years. Thus the Government will benefit now, but will pay for that decision in the next few decade.

Challenging to get the right balance as always.

 

[RT4038]

Should Labour change the rules around these areas, we will of course need to adjust our plan. However that is most likely to lead to reduce pension payments, spend more now and thus increase the risk of the Government needed to financially support us in our retirement years. Thus the Government will benefit now, but will pay for that decision in the next few decade.

Challenging to get the right balance as always.

Is this risk really that significant to the Government, on pensions of two people earning that much?