The first 100 days.

MaizieD

Who wrote that ridiculous Guardian article?

Now you have to say why it s ridiculous, you can’t leave it in the air.

I’m sure that there are people who are unaware of MMT, an economic explanation over how governments raise and recover funding, which disagrees with the accepted economic explanation.

But equally I’m sure some are unaware that Reeves is following accepted (but in your view incorrect) economic mainstream practice.

So this needs spelling out as well I think in order to understand the arguments.

Or even siopes post😄😄. Sorry didn’t see it.

I can’t do links on this iPad, but even if I could I think that more people read actual script than go into links, so I would continue to do script.

MaizieD

Who wrote that ridiculous Guardian article?

Philip Inman -economics editor.

This is the Observer/Guardian article with formatting that perhaps makes it a little easier to read . It is written by Philip Inman, Economics Editor of the Observer.

www.theguardian.com/politics/article/2024/jul/27/britain-finances-key-questions-answers-state-economy-labour-government

I see Stephen Flynn, leader of the SNP in the commons, is delighted that the economic analysis that he put forward in the leadership debates is now being proved correct.

If only taxing wealth was so simple, most wealth is invested in business property, shares or other equity, taxing heavily is going to reduce the capital value so will be self defeating. It would also mean security for loans would be compromised if values fall, so I’m not expecting large changes. There is talk of raising CGT which is fine but if there is no gain there is no tax paid.

MaizieD doesn’t matter who wrote it, the real question is who believes it?
And don’t forget this is not a discussion thread …

Who wrote that ridiculous Guardian article?

The following is an article from The Guardian, that whilst not strictly about the government, outlines why the government is making the certain decisions over the economy/budget etc.

Labour will say the economy is in a terrible state – are they right?
The economic outlook is improving, but a recovery from last year’s recession will be long and arduous without a boost to public investment.
As President Biden has shown, businesses are reluctant to invest without government support and this applies especially to the need for green investment. Since the Brexit vote and the chaos and indecision it sparked inside Whitehall, businesses have delayed or cancelled planned investments, leading to eight years of stagnation.
Skill shortages and the prevalance of long Covid, which has prevented tens of thousands of workers from returning to their jobs, has made it difficult for employers to recruit, leading to higher than expected pay rises. Higher than normal salary increases are one reason the Bank of England has delayed cuts to interest rates.
Without a cut in the cost of borrowing, many economists believe consumers will resist spending and the economy will remain stuck on a low-growth path.
Why are public finances so bad?
The UK continues to borrow heavily to fund a shortfall in government spending.
Taxes have risen since 2021, but spending has outpaced revenue to meet commitments on health, defence, pensions and inflation-linked welfare payments.
Former chancellor Jeremy Hunt made a bad situation worse when he sanctioned expensive cuts to national insurance contributions and paid for them by slashing public investment and freezing departmental budgets already hit by 14 years of austerity.
Some experts say we already knew the scale of the problem – are they right?
It’s not true. The government’s independent forecaster, the Office for Budget Responsibility, lays out each year the extent of the public spending shortfall according to what it is told by the Treasury. But Hunt gave a false picture of the government’s likely commitments, prompting the OBR boss Richard Hughes to declare that the OBR assessment last year read like a work of fiction.
One instance illustrates how departments are being asked to cope with unfunded commitments. Public-sector pay review bodies have recommended teachers and some NHS staff receive a 5.5% increase this year, well above the 3.2% inflation figure in March and the current 2% rate of increase in the consumer prices index. An across-the-board rise in public-sector pay would mean the salary bill rising by up to £10bn.
A freeze on the Home Office budget took no account of the need to revamp the border control and asylum systems to cope with the extra number of people arriving in the UK.
Will Labour’s plans briefed so far make a difference?
Gone are the wild and unfunded promises of public investment during the Boris Johnson years and the reckless tax cuts under Rishi Sunak. Labour’s approach will be based on a sober understanding of what cash is needed to maintain the current infrastructure – from mending crumbling hospitals to repairing leaky school roofs – while also plotting improvements that are affordable.
The cash set aside for a national wealth fund and GB Energy – a body to support the building of wind farms and solar-panel arrays – is modest by international standards. However, rushing to spend public funds quickly has always proved wasteful.
Is there anything else they could do?
Rachel Reeves has boxed herself in with two commitments. First she has promised to recognise on the government balance sheet multi-billion-pound losses incurred by the Bank of England (which the US Treasury ignores) and to adopt Hunt’s budget rule that forces her to reduce the government debt as proportion of national income in the fifth year of the official forecasts.
Ditching both would free up large sums of money to spend on the key to driving growth – public investment.

Wealth inequality and tax

Rachel Reeves could quickly find around £10bn a year to plug half of the fiscal hole left by the Conservatives if she were to raise taxes on soaring levels of unearned wealth, according to leading economists.
New research by the independent Resolution Foundation published today finds that Britain is a country of “booming wealth” but “busted wealth taxes”, leaving ample potential for the chancellor of the exchequer to raise desperately needed funds by raising taxes on the richest.
The report finds that levels of wealth have risen from four times the national income when Labour was last in power to six times the national income today, despite the recent rise in interest rates.
But it says Britain is a country of huge “wealth gaps” in which a family in the top 10th of the wealth distribution has £1.3m more wealth per adult than someone in the middle of the distribution.
Overall, the Resolution Foundation study finds that wealth inequality is nearly twice as high as income inequality. It notes that on the eve of the pandemic, three in 10 families had less than £1,000 in savings – meaning they lacked any real safety net.
This was dramatically exposed during the cost of living crisis, when many families were unable to cope with rising prices and household bills.
The report says that while wealth has become increasingly concentrated at the top, wealth-related taxes as a share of national income have remained low, at around just 3% of national income.
Key wealth taxes – notably inheritance tax (IHT) and capital gains tax (CGT), it says – are poorly designed to tax wealth and would be ripe for reform in the Labour chancellor’s first budget this autumn, helping Reeves meet her fiscal rule of having debt falling as a proportion of GDP in the last year of the parliament.
The report says IHT has many generous reliefs, meaning that the very wealthy often pay a low effective rate. It argues that ending or limiting these would raise up to £2bn a year while also enhancing fairness.
It also argues that if capital gains tax rates were to be linked to income tax rates, this would reduce incentives for the wealthy to change how they are remunerated to avoid tax.
Raising CGT rates on shares to match the rate of tax on dividends could, for instance, raise up to £7.5bn a year.
Together, these two moves – bringing in £9.5bn a year – could help Reeves as she faces up to tough challenges on public spending.

Housing

A sweeping overhaul of planning rules to trigger the building of many more affordable homes will be announced by the government this week as it confronts the economic and social legacy of 14 years of Conservative rule.
Deputy prime minister Angela Rayner will unveil a new National Planning Policy Framework to MPs on Tuesday before they depart for the summer recess in a move that will strengthen requirements for far higher numbers of affordable as well as social homes to be built in areas of need, starting this autumn.

“Local leaders who know their areas best will be key to helping us deliver on these bold ambitions.
We will therefore work with local government to plan new housing in the best possible places, with the supporting infrastructure, public services and green spaces residents need”

Discussions around how to best manage the boundary between hate speech and free speech, no, I don’t see a 1984 scenario here.

There is something about a free speech Tsar and committee ruling free speech, that is chilling. Is this the beginning - - -?

Thanks for your explanation.

So ultimately any institution must be bound by the law?

So how does that fail?

I think University committees such as you allude to meeting together dedicated to addressing the issues together is a good way to go forward...

(which as you say were particularly although not exclusively on one very well publicised issue).... a good way to start.

It's just that I don't think one politically appointed person - the Cambridge "Tsar" with powers to fine or ban or define what free speech is is the best way ahead.

There were/are fundamental problems within universities, this was a complex negotiation from those interested in free speech and the government to address this. There are many academics who opposed the control of speech, some have formed organisations to highlight this issue, academics for academic freedom being one. They produce a list of those banned or discouraged from speaking. Those 'banned' from speaking were frequently women, and some had to go through lengthy court cases to address this. It was frequently brave lone voices in the universities who fought it. The university of cambridge and the Jordan Peterson was one such example. Some of this came from academic whistleblowers, to simply shut it down with no discussion is a mistake in my view. It is a complex problem.

It is very complicated and confusing! But I still see the great dangers of a government appointed Tsar who can make decisions about what is free speech or not as the greater issue.

The Shadow secretary sees a politically appointed Tsar as enabling free speech, but it could have the opposite effect. Ie enforcing government dogma of whatever shade.

Lets see if measures are needed, for example the suggestion of an independent review body.

Galaxy

The more I read the worse it gets. I think this is the kind of thing that many if us who gritted our teeth and voted labour were concerned about.

So explain to me of little brain in words of one syllable why you are so alarmed - if you would be so kind.

The more I read the worse it gets. I think this is the kind of thing that many if us who gritted our teeth and voted labour were concerned about.

I am not sure that there is a great understanding of what is happening re free speech act, so I’ve cut and pasted the rest of the article. I hope this helps

Universities UK, which represents 142 universities, welcomed the report. “Its findings underline the importance of an independent regulator for higher education in England and the need for a focus on the financial sustainability of the sector.”
A Russell Group spokesperson said: “The decision to stop implementation of the act is a sensible and proportionate step given universities and students’ unions were yet to see final guidance from the OfS on new free speech duties despite some requirements of the legislation being due to come into effect next week.”
Nick Hillman, the director of the Higher Education Policy Institute, added: “The free speech situation has been a mess, with universities and students’ unions not knowing what was happening. So it is good that the fog is now slowly clearing.” The move, however, may raise questions about the role of the Cambridge philosophy professor Arif Ahmed, who was appointed last year as the government’s free speech tsar for higher education in England.
Phillipson was accused of pursuing “ideological dogma” by Damian Hinds, the former schools minister who is now the shadow education secretary.
“Free speech is a fundamental right, and this must extend to universities. Without the ability to freely express views in higher education, these centres of learning risk becoming centres of co-option and intolerance,” he said.
“The fact this Labour government is willing to scrap the measures we put in place to protect these rights makes clear that they are willing to sacrifice the next generation on the altar of their own ideological dogma.”
Saranya Thambirajah, the National Union of Students’ vice-president for liberation and equality, said: “Many of us were truly dreading the impact this act would have, serving to further divide our campuses and put marginalised student communities further at risk. The government has sent a clear message that they won’t be playing politics with either free speech or hate speech.”
The move was also welcomed by the Board of Deputies of British Jews, which said it supported concerns expressed by the Union of Jewish Students that the act risked enabling antisemitic extremists to access campuses by having an impact on the ability of universities to block them.
Phil Rosenberg, the board’s president, said: “This halt will enable the government to consider how to ensure that freedom of speech is protected without allowing free rein to purveyors of hate speech.”

I'm hoping that the universities are all too aware of warning shots across the bow now and will act accordingly. (Real actual hate speech is covered by law of course).

Universities have shown they cant manage this though. I want the minimum regulation of speech so a regulator isnt my preferred option either, but I am very wary of the message being sent here.

The bills proposal of a 'Regulator" was a dangerous one imo.

A government appointed Regulator could impose all kinds of limits to suit the government of the day's narratives upon universities. Think 1984 at worst.

I realise there have been difficulties but I think universities have to be in charge of activities not a political appointee.

I know what they think, I utterly disagree with them. It was women and minorities who were harrassed or boycotted under the banner of hate speech.

Galaxy

I am very concerned about the new approach to freedom of speech, is this the way they are going to go. Its just drip drip drip of erosion of free speech. Of course the people impacted most are minorities and women.

I think that this is what Labour are most concerned about, which is why the bill has been stopped in its tracks.

It was thought by universities and the present government alike minorities and women would suffer most from the previous governments “freedom of speech act”

And thank you for undertaking this from me as well Whitewave. Your research and reporting of your findings is much appreciated by many of us I’m sure. The ‘go-to’ thread to find out what Labour is planning. Very helpful.