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The Labour Party under Andy Burnham

ainsworth74

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Yes I do think they should have at least reversed the NI cuts Hunt made in his final months as Chancellor; taxpayers were used to the higher rate anyway and covered the size of this "black hole".
It was even surely quite simple to sell as simply reversing an unaffordable election gimmick? And yet apparently Labour are so terrified of a bad headline that they'd rather just back themselves into a corner from which they can do sod all. Wonderful.

I wasn't exactly expecting milk and honey to flow freely following the election but I was at least expecting some sort of basic political skill from, you know, politicians...
 
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Looks like the first mis-step for Transport SoS Louise Haigh, being ticked off by Starmer for remarks she has made about P&O and DP World.
DP World is a major UK and global port operator, and it also owns P&O Ferries who indulged in fire-and-rehire at Dover recently.
Haigh called them "cowboys" and said she would boycott P&O.
Now it seems DP World in response are refusing to invest in London Gateway port, to the considerable annoyance of Labour HQ.


Sir Keir Starmer has publicly rebuked one of his ministers for the first time, following remarks that appeared to put off a company attending an important investment summit on Monday.
Transport Secretary Louise Haigh said that she had boycotted P&O Ferries in recent years and would encourage others to do so after the firm sacked hundreds of workers in one go in 2022 and replaced them with lower paid agency staff.
But P&O Ferries’ parent company, DP World, has now suggested it will not attend the government’s flagship gathering for potential investors and may postpone a £1bn investment announcement because of remarks.

Until now, Louise Haigh seemed to be doing well in office and avoiding the chaos in some other parts of the government machine.
 

takno

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Looks like the first mis-step for Transport SoS Louise Haigh, being ticked off by Starmer for remarks she has made about P&O and DP World.
DP World is a major UK and global port operator, and it also owns P&O Ferries who indulged in fire-and-rehire at Dover recently.
Haigh called them "cowboys" and said she would boycott P&O.
Now it seems DP World in response are refusing to invest in London Gateway port, to the considerable annoyance of Labour HQ.




Until now, Louise Haigh seemed to be doing well in office and avoiding the chaos in some other parts of the government machine.
Oh what a shame. You mean we've lost an opportunity to have up to a billion quids worth of our key infrastructure owned by a business who have shown themselves to be pretty evil and entirely uninterested in the UK companies they invest in? Naughty naughty Louise.
 

Richard Scott

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I wasn't exactly expecting milk and honey to flow freely following the election but I was at least expecting some sort of basic political skill from, you know, politicians...
I have to be honest and say that Labour look an absolute shambles who are totally inexperienced and give the impression they really have no idea what they're doing.
Don't go along with the only been in office a couple of months as didn't get this with Blair all those years ago.
I'm sure many people will criticise my comments but I really lack any faith in current government to achieve anything positive.
 

Broucek

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3rdI have to be honest and say that Labour look an absolute shambles who are totally inexperienced and give the impression they really have no idea what they're doing.
Don't go along with the only been in office a couple of months as didn't get this with Blair all those years ago.
Agreed. And some of the things they are getting wrong suggest a lack of basic "nous" (the gifts) and that they have not been getting good technical advice or have ignored it until the problems become too obvious (pensions tax). You don't need experience of governing for either of those
 

takno

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Agreed. And some of the things they are getting wrong suggest a lack of basic "nous" (the gifts) and that they have not been getting good technical advice or have ignored it until the problems become too obvious (pensions tax). You don't need experience of governing for either of those
The pensions taxes are a fine example of something which Labour never said they would do, and now probably won't. It seems a bit weird to to suggest it's a failing of government to not say they will do something bad, and then not do it, just because in the middle there was some press speculation.

I'm sure everybody can agree that in the current environment there's too much riding on the budget to have left it all for over 100 days, and that a lot of the reason for press speculation is that there has been an absence of policy decisions, and rather a lot of jockeying-for-position through leaks. I do respect the instinct to not rush into things and to try to build a proper budget that will work, but I don't think in this case that it's worked out well.
 

Broucek

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The pensions taxes are a fine example of something which Labour never said they would do, and now probably won't. It seems a bit weird to to suggest it's a failing of government to not say they will do something bad, and then not do it, just because in the middle there was some press speculation.

I'm sure everybody can agree that in the current environment there's too much riding on the budget to have left it all for over 100 days, and that a lot of the reason for press speculation is that there has been an absence of in this case that it's worked out well.
Agreed on the delay.

On pensions, that's partly true but not all of it was press speculation. It was also silly not to rule out immediate changes to the tax free lump sum limit - people have been taking money out this month. Sure, anyone with a pot that big is unlikely to starve but it's alarming that both Labour and Conservative politicians don't recognise the importance of stability in pensions tax...
 

jfollows

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Agreed on the delay.

On pensions, that's partly true but not all of it was press speculation. It was also silly not to rule out immediate changes to the tax free lump sum limit - people have been taking money out this month. Sure, anyone with a pot that big is unlikely to starve but it's alarming that both Labour and Conservative politicians don't recognise the importance of stability in pensions tax...
Pensions are difficult, aren't they?

I mean that if a government makes retrospective changes, it gets a lot of grief from people who have planned for things, and if it doesn't make retrospective changes it doesn't really get any money in the short term.

Still, I took the maximum tax-free cash from my DB pension this week, not because I brought this forward but because this was always going to be the date, my 63rd birthday as it happens. So my timing is fortunate, possibly. I have already taken all the tax-free cash out of my DC pension so that's also a done deal.

But in my case it's all part of a long-term plan, that's not to say that plans can't change, but if the change is because of retrospective changes to the rules, that's annoying. As you say, stability is important, my detailed plans probably go back to 2008 when I resigned from a job and became a deferred member of the pension scheme which I've only activated this week, so that's more than 16 years.
 

Harpo

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Making saving for a pension unattractive risks reducing the size of pension funds in the future and in turn reducing the amount of capital they have available to invest. Not great if you need ‘growth’.
 

Gloster

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My feeling is that Starmer is not very good at the ‘being a PM’ part of a job: the doing and saying the appropriate things as PM. He hasn’t been there long enough to make a judgement on how he does the other, and more important, part of the job: the leading the government and running the country one.

But look at the previous five: Cameron was very good at the first, but not so good at the second. May was not very good, or very bad, at both. Johnson was superb at the first (most of the time), but appalling at the second. Truss was just all round awful. Sunak was not very good at either.

What we expect is different now: we rather want someone with star quality rather than competence and we, or the newspapers, do demand, criticise and intrude to an ever greater extent. What would the current lot say about Violet Attlee’s driving, for example.
 

Broucek

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I think people today will accept a lack of star power if they can see substance (think Gordon Brown or Nigel Lawson as Chancellor).

But the gifts and the (apparently) shambolic run up to the budget imply that both are lacking. I was hoping for better.

Yes, it's early but first impressions matter and Blair/Brown arrived with a plan (albeit with a much, much better economic inheritance)
 

Richard Scott

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I think people today will accept a lack of star power if they can see substance (think Gordon Brown or Nigel Lawson as Chancellor).

But the gifts and the (apparently) shambolic run up to the budget imply that both are lacking. I was hoping for better.

Yes, it's early but first impressions matter and Blair/Brown arrived with a plan (albeit with a much, much better economic inheritance)
Current government should have been well aware of state of economy (some analysts dispute it's anywhere near as bad as made out but don't have any quotes so can treat that as here say) as they were keen on all covid restrictions (and actually wanted more than were implemented, remember) that contributed to a number of current issues.
 

edwin_m

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Current government should have been well aware of state of economy (some analysts dispute it's anywhere near as bad as made out but don't have any quotes so can treat that as here say) as they were keen on all covid restrictions (and actually wanted more than were implemented, remember) that contributed to a number of current issues.
The problem seems to be that there were Tory spending commitments in the current year not budgeted for, which were not evident to Labour until they got access to the figures on taking over. I can't see how supporting or not supporting something that began four years ago and ended two years ago has any bearing at all on what Labour could have known about this.
 

Broucek

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The problem seems to be that there were Tory spending commitments in the current year not budgeted for, which were not evident to Labour until they got access to the figures on taking over. I can't see how supporting or not supporting something that began four years ago and ended two years ago has any bearing at all on what Labour could have known about this.
The COVID spend is why it’s tricky for the Government to borrow too much more. And “we didn’t know how bad it was” is at best a half truth…
 
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edwin_m

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The COVID spend is why it’s tricky for the Government to borrow too much more. And “we didn’t know how bad it was” is at best a half truth…
But the specific issue is the unfunded commitments in the current year. The OBR has confirmed this was the case, so although Labour may have suspected it they could not have known for certain - and it wasn't in their interests to speculate before the election.

The poor financial position of the country results from a range of things, mainly actions of the Tories since 2010. Covid was a one-off hit and handled badly by the Tories though many on this forum would disagree on the details of why. Brexit was a far more unforced error.
 

Richard Scott

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But the specific issue is the unfunded commitments in the current year. The OBR has confirmed this was the case, so although Labour may have suspected it they could not have known for certain - and it wasn't in their interests to speculate before the election.

The poor financial position of the country results from a range of things, mainly actions of the Tories since 2010. Covid was a one-off hit and handled badly by the Tories though many on this forum would disagree on the details of why. Brexit was a far more unforced error.
Explain how labour would have handled the pandemic better with Starmer being critical of lifting restrictions. His ideas would have worsened the financial position.
Tories did handle it badly as listened too much to press and doom mongerers, should have not had all the restrictions but that's going off topic.
Fact of the matter is neither Starmer or any of his crew are filling me with any confidence and showing that they will be I any way better than what's gone before.
 

JamesT

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But the specific issue is the unfunded commitments in the current year. The OBR has confirmed this was the case, so although Labour may have suspected it they could not have known for certain - and it wasn't in their interests to speculate before the election.
Labour had access to the civil service from January. They were fully aware of what had been committed to.
 

takno

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Labour had access to the civil service from January. They were fully aware of what had been committed to.
Quite a lot of the commitments came after January. Frankly I thing the civil service were in a bit of a spin with some of the Network North fictional funding, and it's not at all unlikely that the Tories left office without ever themselves being clear on just what they'd done. The recommendations of the pay review bodies additionally came very late, but with a commitment to pay them largely baked in.
 

Nicholas Lewis

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Labour had access to the civil service from January. They were fully aware of what had been committed to.
Indeed they knew full well the score as did the OBR who just kept their head down as at times it looked like they would be abolished and given the poor forecasting record they should be but thats going off topic. Labour are all over the place at the moment but then they are inexperienced so are find their feet. However, this low point gives them an opportunity to pull the rabbit out of the bag with the budget and deliver that sense of renewal that people voted for. Nothing will change overnight of course but if they can lay the foundations to get this country back on track electorate will give them the time.
 

edwin_m

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Explain how labour would have handled the pandemic better with Starmer being critical of lifting restrictions. His ideas would have worsened the financial position.
Tories did handle it badly as listened too much to press and doom mongerers, should have not had all the restrictions but that's going off topic.
Fact of the matter is neither Starmer or any of his crew are filling me with any confidence and showing that they will be I any way better than what's gone before.
As I've already said it's completely irrelevant to whether they knew or not whether there was a "hole" in the budget in 2024.

But for what it's worth, I believe a more competent government would have gone into lockdown earlier and that would have allowed a much earlier exit from it. Plus not spaffing all the money on useless PPE from their cronies, track and trace, and other measures.
Labour had access to the civil service from January. They were fully aware of what had been committed to.
The OBR backed Labour's statement about not being aware of the budget hole. They would have been aware of what had been committed to, as that was public information, but not to the fact funds hadn't been allocated to it.
 

Nicholas Lewis

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The OBR backed Labour's statement about not being aware of the budget hole. They would have been aware of what had been committed to, as that was public information, but not to the fact funds hadn't been allocated to it.
They would have known they are plugged into the Treasury but remember they got a lot of push back under Truss and Hunt held them at arms length so they didn't want to rock the boat. Labour coming to power has revitalised them along with a load more pointless quangos stuffed full of overpaid yes-men but suits Labour narrative to surround themselves with organisations they can blame.
 

Magdalia

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The OBR backed Labour's statement about not being aware of the budget hole. They would have been aware of what had been committed to, as that was public information, but not to the fact funds hadn't been allocated to it.
The OBR does the forecasts, and the most up to date information it had was what went into the forecast for the 2024 budget, which was before the 2024/25 financial year had started.

It would not have known about how 2024/25 expenditure outturn was going, and that's where the £22 billion black hole is.

Each annual budget includes a contingency reserve for unforeseen items. The story I've read is that the last government had committed or spent the 2024/25 contingency reserve three times over in the first three months of 2024/25.

Each budget also includes an assumption for public sector pay increases, which I understand was about 2% for 2024/25. That bit the OBR would have known.
 

edwin_m

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The OBR does the forecasts, and the most up to date information it had was what went into the forecast for the 2024 budget, which was before the 2024/25 financial year had started.

It would not have known about how 2024/25 expenditure outturn was going, and that's where the £22 billion black hole is.

Each annual budget includes a contingency reserve for unforeseen items. The story I've read is that the last government had committed or spent the 2024/25 contingency reserve three times over in the first three months of 2024/25.

Each budget also includes an assumption for public sector pay increases, which I understand was about 2% for 2024/25. That bit the OBR would have known.
Thanks for the clarification. I agree the public sector pay rises were a political decision by the incoming government, and a correct one in my view considering how far most of them had fallen behind. It was a little disingenuous for Labour to include those as part of the "black hole".

However, leaving that aside, this means that had the Tories remained in power they would have faced a black hole of their own, admittedly only about half the size. It seems to me overwhelmingly likely that they did this knowing they had no chance of winning, to set a trap for Labour to allow them to say "I told you so" when tax rises or spending cuts were needed.
 

takno

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Thanks for the clarification. I agree the public sector pay rises were a political decision by the incoming government, and a correct one in my view considering how far most of them had fallen behind. It was a little disingenuous for Labour to include those as part of the "black hole".

However, leaving that aside, this means that had the Tories remained in power they would have faced a black hole of their own, admittedly only about half the size. It seems to me overwhelmingly likely that they did this knowing they had no chance of winning, to set a trap for Labour to allow them to say "I told you so" when tax rises or spending cuts were needed.
The problem is that the pay awards essentially just went with the recommendations of the independent review bodies, and the Tories had pretty much committed to do that anyway.

As with many of the promises, it's likely they would have been broken by the Tories if they had won the election. That would have landed us in world of strikes and pain as well as further destroying the foundations of the public sector, so it wasn't a realistic option for a responsible government.

As with everything else it was committed by the Tories, even if they hadn't exactly signed the final paperwork.
 

JonathanH

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One tax that I think is needed, but will take time to actually plan out (so not this budget), is a land value tax that replaces council tax.
Is that the one that sometimes gets called a 'garden tax' because it takes into account all of the land on which a house sits, rather than just the building?

I think it is a difficult thing to implement something which penalises people with outdoor space, and potentially encourages more infill. On the other hand, clearly that infill does avoid agricultural land being built on.
 

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Yes I do think they should have at least reversed the NI cuts Hunt made in his final months as Chancellor; taxpayers were used to the higher rate anyway and covered the size of this "black hole".

One tax that I think is needed, but will take time to actually plan out (so not this budget), is a land value tax that replaces council tax. The latter is based on the value of a house 30 years ago and with band limits leads to some landowners with large land/property sizes paying lesser amounts that many modest homeowners (like Buckingham Palace reportedly paying £1.8k a year). Another advantage is one can't simply move land offshore to avoid it; if they sell it someone else can have it.

My understanding (and I am open to correction) is that a council decides upon its expenditure and then calculates how much each property tax payer, banded, needs to pay to cover this..

I pay a much higher P.T. than someone with the same valuation band in London (and Buckingham Palace!); but if all the properties there had the bands increased - perhaps with new higher bands introduced - a specific house would still receive the same property tax bill after the re-evaluation as before (obviously assuming that the London increases were in proportion to each other) because it's the same amount of money that has to be raised. Banding sets out the proportion of the cost, not an absolute figure.
 

edwin_m

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My understanding (and I am open to correction) is that a council decides upon its expenditure and then calculates how much each property tax payer, banded, needs to pay to cover this..

I pay a much higher P.T. than someone with the same valuation band in London (and Buckingham Palace!); but if all the properties there had the bands increased - perhaps with new higher bands introduced - a specific house would still receive the same property tax bill after the re-evaluation as before (obviously assuming that the London increases were in proportion to each other) because it's the same amount of money that has to be raised. Banding sets out the proportion of the cost, not an absolute figure.
Much of local authorities' income come from central government grants, so these could be re-adjusted to re-distribute funds if the government so desired.
 

Merle Haggard

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Much of local authorities' income come from central government grants, so these could be re-adjusted to re-distribute funds if the government so desired.

My post was a reply to one about the inequalities that the present banding system produced, pointing out that updating the band valuations would generally produce no increase in taxation.

Your suggestion would be the next step that but, as you say, that already happens. From past experience the basis of allocation may be political rather than fairness - Labour have on occasion in the past moved proportionally more money (on a per head or per property allocation) to support cities and away from the Counties (presumably because of perceived voting patterns) and presumably the Tories have done the reverse.
 

takno

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My post was a reply to one about the inequalities that the present banding system produced, pointing out that updating the band valuations would generally produce no increase in taxation.

Your suggestion would be the next step that but, as you say, that already happens. From past experience the basis of allocation may be political rather than fairness - Labour have on occasion in the past moved proportionally more money (on a per head or per property allocation) to support cities and away from the Counties (presumably because of perceived voting patterns) and presumably the Tories have done the reverse.
I suspect the reasons tend not to be explicitly political in most cases, and more to do with a familiarity with the issues in different areas. Many MPs have in the past been councillors themselves of course. The Tories tend to focus on the high rural cost of providing roads, and the cost of providing public transport. Labour focus on the higher urban costs of education and social care.

Arguably the distribution in the Thatcher years was more political, with specific Conservative councils like Westminster funded way beyond what was justifiable so that they could charge peppercorn rates of poll/council tax.

The distribution during recent years has got quite strongly towards Tory shires, but it's a bigger share of a much smaller pie, so they are facing massive cuts and bankruptcy just the same as everybody else.
 

Merle Haggard

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I suspect the reasons tend not to be explicitly political in most cases, and more to do with a familiarity with the issues in different areas. Many MPs have in the past been councillors themselves of course. The Tories tend to focus on the high rural cost of providing roads, and the cost of providing public transport. Labour focus on the higher urban costs of education and social care.

Arguably the distribution in the Thatcher years was more political, with specific Conservative councils like Westminster funded way beyond what was justifiable so that they could charge peppercorn rates of poll/council tax.

The distribution during recent years has got quite strongly towards Tory shires, but it's a bigger share of a much smaller pie, so they are facing massive cuts and bankruptcy just the same as everybody else.

Thanks, valid points. I certainly remember the situation outlined in your second paragraph - the name Dame Shirley Porter springs up in my memory, but I'm not sure whether this was the same scandal.

Don't forget that, in the 'Shires, there are small towns which have many social problems, they're not just limited to the conurbations. Receive less media coverage because each one affects fewer people.

It does seem that the majority of councils going 'bust' are in the 'shire' counties, though.
 

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