It will be interesting to see what Rachel Reeves has to say on Monday.
Rachel Reeves has said she would give a statement to Parliament on Monday showing “honesty” about the scale of the challenge faced by the new Labour government. She vowed to "fix the mess we inherited" but would not confirm speculation that the gap in the public finances stood at more than £20bn per year. That 'gap' depends on how much Labour intends to spend and over what period of time.
The Conservative Party accused the new government of "peddling nonsense". Britain now has the fastest rate of growth in GDP of all the G7 countries, and as was promised by Sunak and Jeremy Hunt, inflation is now down to 2% - the Bank of England's target rate:
Labour will suggest the Conservatives left various crucial public services unfunded in areas from public pay to prisons.
Few would argue with that, but it takes little account of the damage and costs burden to the economy caused by Covid 19, almost two years of lockdown, Furlough, and support for business, (true, much of it was fraudulently exploited, and millions were wasted on PPE procurement). Furthermore, the worldwide hike in energy costs which affects the price of everything. In the winter of 22/23, the mantra was 'old people had to choose between heating and eating'. It was nonsense. Every household received £400 fuel support that winter, (total cost of that was £9.1 billion), over 65s received £200 winter fuel allowance and over 80s received £300. I was 82 back then, and that £700 government handout didn't just pay the excess costs incurred by the energy price hike - it paid my gas bill for the whole winter.
"On Monday, the British public are finally going to see the true scale of the damage the Conservatives have done to the public finances," a Labour source said. "They spent taxpayers’ money like no tomorrow because they knew someone else would have to pick up the bill. It now falls to Labour to fix the foundations of our economy and that work has already begun."
When they say 'someone else is going to pick up the bill' that can only be the taxpayers.
It sound to me like setting the stall out for more tax rises or borrowing. ( On what did the Conservatives 'spend money like there was no tomorrow'?)
Labour has pledged not to raise taxes "on working people" including most aspects of National Insurance, income tax and VAT. Some economists suggested during the election that many of these spending pressures, and the possibility taxes would need to be raised to fund them, were obvious and should have been made clear to the voting public.
Rachel Reeves has said: "The number one mission of this new government is to grow the economy, and to grow the economy we need to attract wealth creators to Britain," she said. "We can't tax and spend our way to higher growth and to greater prosperity. We need to attract business investment to be able to do that."
That a refreshing and novel concept for a Labour Government to announce - she sounds like a Tory, but I'm not that sure that the 'new deal for workers' (not of her doing), will necessarily help achieve that aim, but compared the most EU countries, notably France & Germany, the UK is starting to look like a safe bet for inward investment. With France politically and economically unstable and falling out of favour, Vivendi - a French firm, has just announced that it will list it's Canal+ TV business on the London Stock Exchange - not France, and Shein - a Chinese clothing firm - is likely to later this year.
Time will tell - Monday's announcement isn't a budget - that comes in Autumn.
As to who put labour in power, there's an interesting report at the link below, which looks at age, social class, income levels etc with some surprising results. For example, educationally, those with GCSE or lower, 28% voted labour, those with a degree or higher, 42%. In terms of income level, Under £0k, 33%,, £50K+ 40%, £70k plus, 40%. Social grade: ABC1 (Professional, managerial, skilled): 36%. C2DE (Semi skilled unskilled, economically inactive): 33%.
https://yougov.co.uk/politics/articles/49978-how-britain-voted-in-the-2024-general-election
Labour won 34% of all votes cast in the UK, and under the UK’s 'First past the post' system, 63% of all seats in the House of Commons. By the same token, 66% of voters voted for parties other than Labour and therefore “against Labour”. (40% of those eligible to vote didn't do so). Personally, I'm really pleased that it wasn't a 'hung parliament' with Labour relying on the support of the fringe parties to get anything done.
Early days.
