Labour’s Manifesto

Germanshepherdsmum

If you’re at a loss Maizie I am even more worried. Why oh why do we not hear Reeves grilled on where the money is coming from? Properly pinned down by someone who knows what questions to ask? It seems people blindly follow the ‘we need change’ mantra without question. We are in for more austerity, ‘tough decisions’ and higher taxes.

Incidentally, where will the money to compensate the subpostmasters and victims of contaminated blood come from, and the money needed to end the doctors’ strikes? Any mention of that anywhere?

Well, Labour will have to find the money for those issues as the Conservatives have been happily kicking those particular financial cans down the road knowing that they probably won’t have to deal with it themselves.

Incidentally, where will the money to compensate the subpostmasters and victims of contaminated blood come from, and the money needed to end the doctors’ strikes? Any mention of that anywhere?

I actually think it will come from much the same place as did the £billions to cover the covid pandemic. Which was neither from taxation or 'borrowing'.

No-one ever asks a government questions about cash injections for out of the ordinary spending like this at the time they happen, or even when they are announced. 'How are you going to fund this?' is a question reserved specially for general elections.

If you’re at a loss Maizie I am even more worried. Why oh why do we not hear Reeves grilled on where the money is coming from? Properly pinned down by someone who knows what questions to ask? It seems people blindly follow the ‘we need change’ mantra without question. We are in for more austerity, ‘tough decisions’ and higher taxes.

Incidentally, where will the money to compensate the subpostmasters and victims of contaminated blood come from, and the money needed to end the doctors’ strikes? Any mention of that anywhere?

Pantglas2

It worries me that you’re at a loss MaizieD! I depend on you to explain the economics of what’s being promised…

😂

It worries me that you’re at a loss MaizieD! I depend on you to explain the economics of what’s being promised…

I have already said that Labour intends to change the basis on which fund managers are paid from CGT (the practice in Europe and the US as well as the UK) to income tax. That will really assist investment.

Rachel Reeves worries me.

I find myself agreeing with this article by Jeremy Clarkson

^ Instead MSSE argues for greater use of state powers, that support growth without detrimental affect on equity or the environment,^

I'm sorry. What does not having a detrimental effect on equity mean?

Looking at MSSE brings me back to the question of where will the money come from?

If Labour intends to get it from the tinkering with taxation that it has so far announced it will be nowhere near sufficient for the investment needed. It has also sworn it won't rely on 'borrowing' because it wants to reduce the deficit (deficit reduction would, I suspect, have been the last thing that would have concerned Keynes).

So, unless it secretly intends to undertake wholesale money creation (like the £billions the tories created to deal with the pandemic) I'm completely at a loss to see how it is going to work.

Maybe it is because they are, like Reeves, proponents of modern supply side economics?

Although I don’t follow Murphy, I suspect that he may support the argument that much of the U.K. economic problems are as a result of an over reliance on the market mechanisms to solve the issues. Instead MSSE argues for greater use of state powers, that support growth without detrimental affect on equity or the environment, as we can see this in the manifesto and being developed by Reeves.

I do understand that as far as Murphy is concerned the argument is over the way the government funding is procured, but I don’t see why this should invalidate MSSE theory.

There are some quite surprising names in that list of signatories.

I follow Wren Lewis's blog and he's been writing about the relative unimportance of deficits and the need for more state investment.

Marianna Mazzucato writes extensively on how the use of state investment in projects which private investors wouldn't touch (as being too risky) has led to innovation, and commercial success for private companies who have built on the state investment in research and development.

Danny Blanchflower is a great mate of Richard Murphy and has a similar left leaning outlook. Perhaps they have differed on their assessment of Labour's plans

Economists backing Labours plans

“Britain has suffered a long period of economic stagnation over the last 14 years, with low growth in productivity, real wages and living standards. Not only is this record poor by historical standards, but the UK has also underperformed compared with its international peers. We invest too little and too inefficiently – especially in skills, infrastructure and innovation.

A key problem relates to the many policy mistakes, reversals and leadership churn – these have helped create huge investment-sapping uncertainty. Second, structural reforms are needed to boost national infrastructure and housing, especially around the planning system. Third, we need to improve our relationship with the European Union, our closest trading partners. Finally, the transition to net zero, and sustainable growth, needs a new urgency. Change is desperately needed.

Contrary to what the government has been saying, we believe that Labour provides a credible economic alternative across all these dimensions, and that Keir Starmer and Rachel Reeves offer a combination of stability and an ambitious set of reforms to help grow the economy.
Prof Philippe Aghion College de France, Insead and LSE
Sir Charles Bean Professor, LSE
David Blanchflower Bruce V Rauner ’78 Professor, Dartmouth College
Angus Deaton Nobel laureate, and senior scholar and emeritus professor, Princeton University
Richard Layard Founder-director of the Centre for Economic Performance, LSE
Prof Mariana Mazzucato Founding director, Institute for Innovation and Public Purpose, UCL
Sir Christopher Pissarides Nobel laureate and president, Royal Economic Society
Prof Richard Portes CBE, Founder of Centre for Economic Policy Research, London Business School
Professor Danny Quah Lee Kuan Yew School of Public Policy, National University of Singapore
Dani Rodrik Ford Foundation Professor of international political economy, Harvard University
Prof David Soskice LSE school professor and professor of political science and economics emeritus, International Inequalities Institute, LSE
Anna Valero Distinguished policy fellow, LSE
John Van Reenen OBE and Ronald Coase School professor, LSE
Joe Stiglitz Nobel laureate and university professor, Columbia University
Simon Wren-Lewis Emeritus professor of economics, Oxford
Tony Yates Formerly of the Bank of England”

Sorry not to have come back but I have been out - and due out again soon, but just some quick thoughts, which are being dashed out quickly so I hope make sense.

So what I think Labour are focused on are 3-4 main areas.

Stability

Resilience

Activist state

Growth

Stability - after Truss, Brexit, Austerity, and the instability and volatility this brought brought the lowest level of investment for decades, although investment has been falling since Thatcher.

Resilience - covid and geopolitical instability has highlighted the need for the U.K. to build in resilience to the economy.

Activist state - this is where a Labour government will provide reassurance and intervention, which provides businesses with the confidence to begin to invest.

Growth - will follow once the ground for the first 3 is secure, because there is ample evidence to show that when people feel economically secure, they more likely to engage in innovation and entrepreneurship.

I haven’t got time ‘cause I’m off out again, but I will develop this later.

Just to note a letter from some economists. I’ve copied and pasted.
I’ll post it separately.

Unfortunately Maizie we don’t know what the approach will be. You won’t be surprised to hear that I won’t vote Labour. I have significant concerns about the changes they will make to the tax regime. It has, for instance, been suggested that they will abolish the seven year rule for gifts falling outside IHT. That might affect a lot of people.

And I shall still vote Labour...

LauraNorderr

Agree with GSM and with MaisieD.

But GSM and I are coming from different places, don't forget

My approach to state investment wouldn't involve prior taxation...

Agree with GSM and with MaisieD.

Dinahmo

We need green energy.

Travelling by train, pre covid, back from Italy and into France it was noticeable how many small waste areas in shunting yards etc had small solar panel arrays.

Here in France, since July 2023 French supermarkets with parking spaces for between 80 and 400 cars will have 5 years to install solar panels. In my nearest town the large supermarket had installed at least cover for 80 cars. The roof is also good when it rains. Not so far to get wet.

Great to hear! I have always thought that 'ugly' buildings, supermarkets, car parks, industrial parks for instance, should have to have solar panels on their roofs. Although I am very pro green energy I can quite understand the objection to solar arrays in green fields.

It would have to be done retrospectively on existing buildings, but should be mandatory on new industrial ones, with it being a requirement for the granting of planning permission.

Dinahmo

We need green energy.

Travelling by train, pre covid, back from Italy and into France it was noticeable how many small waste areas in shunting yards etc had small solar panel arrays.

Here in France, since July 2023 French supermarkets with parking spaces for between 80 and 400 cars will have 5 years to install solar panels. In my nearest town the large supermarket had installed at least cover for 80 cars. The roof is also good when it rains. Not so far to get wet.

France has 18 nuclear power stations, UK has 9. France are bringing on a new one, all ours are becoming defunct, no new ones planned. France is hedging it's bets, we've kissed ours goodbye.

I heartily agree Maizie. The only changes we will see imho are different faces and higher taxes.

Then you haven’t been listening, nor read the manifesto.

I have been listening. What I am hearing is 'fiscal rules', 'hard choices', 'spending no more than what can be gained from new taxation' and hasty revision downwards of amounts previously proposed for investment.

Labour has been strait jacketing itself as far as 'investment' goes in order to, it seems, conform to the household budget myth and not scare off voters by appearing to be profligate.

Well, their economic conformity to monetarism and neoliberal theory is scaring the hell out of me. Going by what they are saying we're in for another dose of austerity, 'justified' in exactly the same way that the tories justified austerity in 2010 by saying that Labour had mismanaged and impoverished the economy. Only this time they'll substitute 'tories' for 'Labour' in the narrative.

Reeves has clearly recognised that the U.K. economy has been dogged by chronic underinvestment and low productivity under the Tories, so the intention is for government investment to encourage private capital into various public infrastructure and other projects.

To which I would say 'PPI'. And look what a mess thatbturned out to be.

There are a few things that private capital needs in order to be willing to invest.

Stability, a market and profit.

Which is more or less exactly what I have said repeatedly over the past few years. But it can't be done on their strait jacketing terms.

Goodness, after the last 14 years you’d think most would welcome change.

I’m now adopting a “wait and see” approach rather than entering into “debates” as I normally would.

I’ve experienced and seen the damage caused in the last 14 years, in many areas.

As regards the non doms - remember how much Labour expenditure is predicated on the taxes which they will be receiving from non doms. Now, evidently, not so much. Labour cannot ‘happily do without them’, they need them. I would have thought an exodus inevitable.

I am pleased to note that Maizie shares my doubts about private investment. My concern is that China will be delighted to invest, as they have already done to a worrying extent. Do we want more Chinese involvement in our infrastructure?

Then you haven’t been listening, nor read the manifesto.

Reeves has clearly recognised that the U.K. economy has been dogged by chronic underinvestment and low productivity under the Tories, so the intention is for government investment to encourage private capital into various public infrastructure and other projects.

There are a few things that private capital needs in order to be willing to invest.

Stability, a market and profit.

All of which have not been present - particularly since 2016.

Government investment partnered with private capital will be the start of this ambitious aim to restore the U.K. towards growth and higher productivity.

We know that Reeves has been in talks with business and people willing to invest, and we know that business is certainly willing to support Labour in this project. All that is needed is government investment to kick start the whole thing off. That will produce growth.

But of course profit does not flow unless there is a market and the elephant in the room is of course Brexit. The biggest, most stable and easiest profit always come from your nearest geographical neighbour - that is true all over the world, so labour are going to look at closer working, and have been in talks with Brussels for a while now.

With regards to non-dons - presumably the alleged exits are in reaction to the Tory ruling over non-doms. Frankly I can’t get terribly exercised by someone who wants to live in a country with all the benefits, but is not willing to contribute towards the benefits they are enjoying - I can happily do without them.

Syracute

Germanshepherdsmum

Now where will this private investment come from? China perhaps?

Always the doomsayer . Britain needs change The sooner the better !

I have to say that this is one of the very rare occasions on which I more or less agree with GSM. I don't see where this private investment will come from unless Labour are prepared to make some serious investment into the economy through the public sector.

Private investors won't want to invest unless they can see an opportunity to make a profit. At present a significant proportion of the population have little money to spare once they have covered their living expenses, there's little spare money around to attract development and growth in the private sector.. We know that the wealthy don't spend enough into the domestic economy to stimulate growth, 'trickle down' is an illusion.

Labour is going to have to pull some rabbits out of the hat...