Labour’s economic plan

www.theguardian.com/politics/live/2023/oct/09/labour-party-conference-rachel-reeves-planning-building-infrastructure-uk-politics-live ...... endorsed by Mark Carney too....

The problem in the past has been identifying the growth areas. I hope Reeves will take a steer from the private investment community on that rather than trying to resuscitate failing areas which trades unions want propped up. Increasing productivity and overall production is essential to our future because it's the only source of tax to fund public services and underpin better wages and salaries.

Thanks for that - but I was talking about the Mais lecture.

seadragon

Rachel Reeves has been talking to the private sector ever since she became shadow chancellor.
We have 2 friends who work in the city/ Canary Wharf. Most traders/ bankers like her. As they say she passes the smell test

What I am so relieved about is that thatcheromics is finally being shelved.

We have stagnant economic output for more or less the whole of the decade and Reeves recognises that tight control of the money supply, privatisation and control of the movement of labour, simply hasn’t worked.

How will loose control of the money supply, "work", in your opinion?
And what would you call "work"?

And would you acknowledge, seperate question, that it is possible that things in the Uk, economically, have scope to worsen in any way?

tbh, it is the green growth element that scares me the most.
But I think that subject has been debated everywhere to death in the last decade or so.

Whitewavemark2

I’ve been dipping into Rachel Reeves lecture she gave recently and am pleased to see stuff that I had hoped labour would introduce.

The first is growth - so this is modelled on Keynesian growth theory, which maintains that by de-risking growth in certain identified economic activities through government investment, than output will grow.

This has been spectacularly successful in the USA, and if it is as successful here we would have difficulty finding the people to fill the posts.

The second is the emphasis on green growth, which is still central to their growth strategy.

Last is something I haven’t really seen labour mention - but I am pleased to hear that workers fights will be central to the new economy. The argument - which has a degree of real merit is that workers who are treated with respect etc are far more productive than where workers are exploited.

Sounds good generally but not sure I like the policy of workers fights, how would anything get done?😆

We have 2 friends who work in the city/ Canary Wharf. Most traders/ bankers like her. As they say she passes the smell test

That's what worries me a great deal about Reeves.

If Rachel Reeves is to be chancellor under Labour there will not be any noticeable changes, as she is of the Country budget is run the same as a household school of thought.

Country budget is run the same as a household

Ooh. Just as I like.

fancythat

*Country budget is run the same as a household*

Ooh. Just as I like.

The budget of a Country with its own sovereign currency is nothing like a household budget, nor will it ever be.

GrannyGravy13

fancythat

Country budget is run the same as a household

Ooh. Just as I like.

The budget of a Country with its own sovereign currency is nothing like a household budget, nor will it ever be.

Exactly, GG13. 😆

Reeves is placing so many needless restrictions on herself that she'll find it hard to evade them to make the huge investments needed to restore our public services, let alone investing in anything else.

I don't believe that she represents any sort of change of economic direction.

I see a lot of things in Reeves’ Mair speech that I like.

labour.org.uk/updates/press-releases/rachel-reeves-mais-lecture/

I also like her stance of workers’ right but the words that cheer me most are: Labour will … bring forward the next generation of New Towns.

We really do need a long-term housing vision that goes much further than just saying we will build x number of new houses a year. We cannot keep tacking on new developments to exisiting villages, towns and cities that only serve to overload existing services.

Reeves is certainly not a MMT but she is not alone in this. No country in the world who has a fiat currency operates on this balance sheet approach.

However, she is clearly following Keynesian growth model, which is not so far away from the new kid on the block -MMT.
So, the only divergence using the MMT model from the Keynsian growth theory, is the role that government debt plays. However, this idea that Reeves is operating on a “household budget” is being overplayed, and KGT is as far removed from that as MMT.

I think that there is little doubt that the current situation regarding employment is impeding economic growth in a major way, and without addressing this neither MMT nor KGT have the answer.

Reeves certainly recognised the lack of available labour in her lecture though, and appears to be laying the ground by ensuring workers rights are recognised etc.

The loosening of movement will go much further in solving this problem, which is a step that labour at present are not prepared to make public, but it must be addressed if Reeves intends to go for growth.

Addressing the question of debt.

Reeves shows no evidence that she is a fiscal conservative nor a free market small state liberal.

She sees the government role in the present economic cycle as one in which in order to promote economic growth, government should invest in various economic sectors, but at present primarily in the so called Green growth. The bank will be instructed to facilitate this as far as possible, and planning regulations will be tweaked accordingly.

It is the intention that U.K. energy will be Primarily from renewables, making us independent and secure in energy production.

However, housing is also to be a focus and again this will be facilitated by various methods.

One bit of evidence to indicate that Reeves is not fiscally conservative is her intention of reforming the Treasury by ensuring growth is hardwired into the tax and fiscal decisions. She also intends to rely more on the economic growth unit set up by Blair rather than the OBR which in her view had inhibited growth since its inception in 2010 - her view is that it had become over-mighty and needs to be balanced by the EGR when looking at economic forecasts.

If she becomes Chancellor after the next GE I hope she tackles those who consider living on benefits, a lifestyle choice. To my mind, Jobseekers means you are actively looking for employment. With almost a million vacancies in this country it shouldn't be too difficult to find work yet there is this growing element who sit at home with their hands held out to an over indulgent Government.

Sarnia

If she becomes Chancellor after the next GE I hope she tackles those who consider living on benefits, a lifestyle choice. To my mind, Jobseekers means you are actively looking for employment. With almost a million vacancies in this country it shouldn't be too difficult to find work yet there is this growing element who sit at home with their hands held out to an over indulgent Government.

Sarnia. Just out of interest, do you actually know anyone who lives entirely on benefits?

Sarnia

If she becomes Chancellor after the next GE I hope she tackles those who consider living on benefits, a lifestyle choice. To my mind, Jobseekers means you are actively looking for employment. With almost a million vacancies in this country it shouldn't be too difficult to find work yet there is this growing element who sit at home with their hands held out to an over indulgent Government.

Having worked in the Jobcentre throughout this govts tenure I can assure you of two things, very few people survive on benefits as a lifestyle choice and this govt isn’t, and never has been “over indulgent” Without wishing to be rude, you’re very out of touch.

Yes, I’m sure you know of someone who lives a very nice life on benefits, very very few do more than just survive or get by, particularly those who are single or under 25.

Also, please bear in mind Jobseekers Allowance has been replaced with Universal Credit, many many people claiming this are actually in low paid jobs.

Well I tried to read the Mais speech but concise communication is not one of Reeves’ strengths.
Reeves said a lot and I am not convinced that any of it makes much sense. At one point she is clearly into housewife budget economics. A lot of rhetoric and little substance. Why am I not surprised?