Is Rachel Reeves becoming the new Liz Truss?

[Spartacus]

In 2022, Liz Truss and Kwasi Kwarteng delivered what was seen as a disastrous budget by the markets and it is claimed they crashed the economy. 

Rachel Reeves appears to be going after farmers, Pensioners, pension pots and increasing NI for employers, which whilst not taxing "working people" will see prices going up to cover the costs for already squeezed businesses, all this whilst changing how the government fiscal rules work.

The change of administration in the States may impact our exports to them (potential tarrifs) which also may see growth stall slightly. 

Will her gamble work or will we as individuals and a nation see stagnation in growth as businesses reduce investment whilst prices go up. 

With the farmers protest planned on Tuesday 19th, it is starting to feel like the bad old days of the winter of discontent (1978/79) again. 

Whilst investment is needed to help the country grow, are we in danger of not supporting the businesses and people who normally are responsible for growth? 

Discuss. 

[teddyboy23]

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Edited 23 hours ago by teddyboy23

[Jenijenjen]

4 hours ago, Spartacus said:

, it is starting to feel like the bad old days of the winter of discontent (1978/79) again. 

Deliberate scaremongering

[malumbu]

A silly title, Truss set such a high bar I doubt whether anyone can ever match her level of incompetence and level of delusion.

Paul Johnson spoke on inheritance tax on one of the political programmes.  Any inheritance tax is controversial, and he considered farmers should not be an expectation

I was underwhelmed and incredibly disappointed that there was no increase in fuel duty; Labour chickened out and I will be telling Rachel's sister this view.

Paul Johnson has written a good article on his analysis and that the budget was not at all revolutionary

https://ifs.org.uk/articles/budget-was-non-event-and-kicked-big-decisions-down-road

If you want something to worry about look over the Pond

Reality check - pound crashed against the dollar and other major currencies following Brexit vote - 1.70 to 1.20, and has never recovered

Truss's mini budget sent it to almost an all time low 1.08, from around 1.20 the week before

Reeves budget it lost a cent, and fared worse since Trump won the election.

Edited 21 hours ago by malumbu

[Spartacus]

45 minutes ago, Jenijenjen said:

Deliberate scaremongering

Is it? Let's see 

31 minutes ago, malumbu said:

Paul Johnson spoke on inheritance tax on one of the political programmes.  Any inheritance tax is controversial, and he considered farmers should not be an expectation

Farming is a tough gig with increasingly lower returns, if farms have to sell off land to pay inheritance tax it will reduce their ability to survive. Which in real terms could mean more farm land lost and more reliance on imported food which sees money flowing out, not in to the country. 

But I guess as long as you get cheap food that doesn't concern you 😉 

35 minutes ago, malumbu said:

I was underwhelmed and incredibly disappointed that there was no increase in fuel duty; Labour chickened out and I will be telling Rachel's sister this view.

Lol "what about the cars"  again Mal... like a broken record.... 

Governments know that squeezing car drivers for more fuel duty will drive down income from taxes as people switch to electric, which would leave them with a black hole in income. Guess the fuel duty is a fine balancing act tiĺl enough electric cars have been sold to raise tax revenue from their use. 

[malumbu]

People are switching to electric cars irrespective of fuel prices.  100s of millions that could be spent on hospitals and schools for example have been lost due to fuel duty freezes and a supposedly temporary reduction.  Fuel is relatively cheap at the moment.  With a stonking majority when is it time to rightly take on motorists?

Farming, I simply referred to Paul Johnson of the IFS who knows more about the economy that you, I and Truss will ever know.

Food?  Au contraire.  It's too cheap, too poor quality and our farmers are squeezed by the supermarkets and unnatural desire to keep it cheap.  A lot less takeaways and more home cooking with decent often home produced, food should benefit most in our society.

Be honest, you simply don't like Labour. 

Edited 19 hours ago by malumbu

[Spartacus]

Oh @malumbu so many incorrect assumptions in your last post 

Without knowing me you make assumptions about my financial experience, politics and yet again you cry "what about the motorists" 

Where will all that tax you say could be spent on hospitals and schools come from if everyone cycled? 

[HeadNun]

Labour was right not to increase fuel duty - it's not just motorists it affects, but goods transport. Fuel goes up, inflation goes up. Inflation will go up now anyway, and growth will stagnate, because businesses will pass the employee NIC hikes onto customers. 

I think farms should be exempt from the 20% IHT. I don't know any rich famers, only ones who work their fingers to the bone. But it's in their blood and taking that, often multi-generation, legacy out of the family is heart-breaking. Many work to such low yields, and yet they'll often still bring a lamb to the vet, even if the fees are more than the lamb's life (or death) is worth.

Food security should be made a top priority in this country. And, even tho the tax is only for farms over £1m, that's probably not much when you add it all up. I think every incentive should be given to young people who want to take up the mantle. 

[Earl Aelfheah]

On 14/11/2024 at 10:53, Spartacus said:

Rachel Reeves appears to be going after farmers, Pensioners, pension pots and increasing NI for employers, which whilst not taxing "working people" will see prices going up to cover the costs for already squeezed businesses, all this whilst changing how the government fiscal rules work.

Money has to be raised in order to slow the almost terminal decline of public services bought on through years of neglect under the last government. There is no way to raise taxes that does not have some negative impacts / trade offs. But if we want public services and infrastructure that work then raise taxes we must. 

Personally I'm glad that she is has gone some way to narrowing the inheritance loop hole which was being used by rich individuals (who are not farmers) to avoid tax. She's slightly rebalanced the burden away from the young, putting it more on wealthier pensioners (who let's face it, have been disproportionately protected for many, many years). And the NICs increase, whilst undoubtedly inflationary, won't be directly passed on (some will, some will likely be absorbed by companies); it's better than raising it on employees, which would have done more to depress growth.

Overall, I think she's sailed a prudent course through very choppy waters. The electorate needs to get serious... you can't have European style services and US levels of tax.

Borrowing for tax cuts, Truss style, it is is not.

Of course the elephant in the room (growing ever larger now Trump is in office and threatening tariffs) is our relationship with the EU. If we want better growth, we need a closer relationship with our nearest and largest trading block.

1 hour ago, HeadNun said:

Labour was right not to increase fuel duty - it's not just motorists it affects, but goods transport. Fuel goes up, inflation goes up.

We will at some point have to review tax on transport more radically (as we see greater up take of electric vehicles). The most economically rational system would be one of dynamic road pricing. But politically, very difficult to do

Edited 53 minutes ago by Earl Aelfheah