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Post by Carl LaFong on Sept 13, 2023 9:09:24 GMT
Labour can’t tax and spend its way out of trouble, warns Blair Former PM says Starmer could face an even gloomier economic situation than he inherited from John Major Keir Starmer’s Labour must accept it will not be able to tax and spend its way out of financial trouble, Tony Blair has warned. The party’s former leader and ex-prime minister told the Financial Times the Conservatives had “taxed and spent to the point [of]… economic crisis” and said Starmer would be facing an even gloomier situation than he had inherited from John Major. “If Keir Starmer wins the election, which I think he’s got a good chance of doing, he’ll be the sixth prime minister in eight years,” said Blair, who served as prime minister from 1997 to 2007. “That’s a country that’s in a mess. We are not in good shape. “The Conservative party has taxed and spent to the point where we’re in an economic crisis. The radical agenda today is all about understanding, mastering, harnessing the technological revolution – everything else is secondary to that.” Blair said he met the current Labour leader “reasonably frequently” and said Starmer’s critics who said his policy offering was too bland were talking “nonsense”. However, he said Starmer was “his own person” and praised him for making the party electable again. Blair also said it was a “shocking indictment” that he remained the only Labour leader born in the last century to win a general election. “I’m afraid it has not been a successful political project,” he said, adding: “I didn’t give up on Labour. But I think the Labour party would have been finished if we had carried on under Corbyn.” Blair’s intervention comes weeks after the shadow chancellor, Rachel Reeves, explicitly ruled out Labour imposing a wealth tax if it won the next election, as the party doubled down on its efforts to demonstrate economic competence. She confirmed that a Labour government would not bring in a mansion tax on expensive properties, increase capital gains tax or put up the top rate of income tax. “We have no plans for a wealth tax,” Reeves said. “We don’t have any plans to increase taxes outside of what we’ve said. I don’t see the way to prosperity as being through taxation. I want to grow the economy.” www.theguardian.com/politics/2023/sep/13/labour-cant-tax-and-spend-its-way-out-of-trouble-warns-tony-blair |
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Post by Deleted on Sept 13, 2023 9:28:52 GMT
Labour really are trying to limit expectations about anything improving, aren't they? It seems to be working for them but I would say there is a risk if they go too far down this "nothing will fundamentally change" path, people might reconsider what's the point of voting for them? Which actually gives Sunak (or perhaps more realistically, the Lib Dems, SNP, Greens and Plaid Cymru) an opportunity to outplay Labour to the left. If nothing else, I wouldn't be surprised if turnout for the 2024 GE is pretty small.
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Post by charzhino on Sept 13, 2023 10:04:17 GMT
Hes right, Labor cannot tax more or spend more to reverse the stagnation we are facing. The way to bring down inflation is to increase productivity and increase peoples savings. That means less Government spending/regulation/interference.
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Post by Deleted on Sept 13, 2023 10:10:40 GMT
The way to bring down inflation is to increase productivity and increase peoples savings. Isn't that what the Tories are currently doing though via raising interest rates? Why vote for an opposition that offers the same solutions as the government? |
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Post by charzhino on Sept 13, 2023 10:18:08 GMT
The way to bring down inflation is to increase productivity and increase peoples savings. Isn't that what the Tories are currently doing though via raising interest rates? Why vote for an opposition that offers the same as the government? But its not working, peoples savings are going down because not all banks are not offering the 5% rates that everyone should have easy access to get - and interest rates need to go higher. The opposition wont do much either. We need more people employed productively to improve our supply of goods and services - both of these things have been damaged by Brexit and the increase in things like work from home, long term sick, benefit claimaints etc. |
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Post by Deleted on Sept 13, 2023 10:25:33 GMT
Isn't that what the Tories are currently doing though via raising interest rates? Why vote for an opposition that offers the same as the government? But its not working, peoples savings are going down because not all banks are not offering the 5% rates that everyone should have easy access to get - and interest rates need to go higher. The opposition wont do much either. We need more people employed productively to improve our supply of goods and services - both of these things have been damaged by Brexit and the increase in things like work from home, long term sick, benefit claimaints etc. Since there is considerable evidence that inflation is being driven by price-gouging, wouldn't it be worth considering price freezing rather than messing about with interest rates which so far seems to be ineffective? And perhaps a job guarantee might be a way to up productivity? But even if you disagree on that, shouldn't a democracy have different parties coming up with various solutions to current problems and the voters choose which one they think will work? Rather than all the major parties offering slight variations on the same strategy. |
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Post by mowlick on Sept 13, 2023 10:34:31 GMT
Actually, Major left Blair's government a budgetary surplus. Not only that, they had the wise words of Norman Macrea, who remarked with astonishing foresight that the recessions of the 1990s had bottomed out and that the boom that followed would last for the next ten years and rather than piss away the national revenues on unnecessary job creation schemes, the Treasury should sit back and watch the tax receipts pile up and unemployment disappear
Instead Gordon Brown decided to sell our gold reserves at fire sale rates.
The Scots have always had a reputation for being canny with money. Gordon seems to have been the exception to the rule
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Post by Deleted on Sept 13, 2023 10:55:29 GMT
Actually, Major left Blair's government a budgetary surplus. Not only that, they had the wise words of Norman Macrea, who remarked with astonishing foresight that the recessions of the 1990s had bottomed out and that the boom that followed would last for the next ten years and rather than piss away the national revenues on unnecessary job creation schemes, the Treasury should sit back and watch the tax receipts pile up and unemployment disappear That does seem the traditional Keynesian wisdom - spend your way out of a recession and leave the economy alone during a boom. Both Labour and the Tories seem to ignore that wisdom. |
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Post by mowlick on Sept 13, 2023 11:29:25 GMT
Actually, Major left Blair's government a budgetary surplus. Not only that, they had the wise words of Norman Macrea, who remarked with astonishing foresight that the recessions of the 1990s had bottomed out and that the boom that followed would last for the next ten years and rather than piss away the national revenues on unnecessary job creation schemes, the Treasury should sit back and watch the tax receipts pile up and unemployment disappear That does seem the traditional Keynesian wisdom - spend your way out of a recession and leave the economy alone during a boom. Both Labour and the Tories seem to ignore that wisdom. True.
The problem is that all governments have a terrible need to do something and about the only thing they can really do is spend money
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Post by charzhino on Sept 13, 2023 12:20:31 GMT
But its not working, peoples savings are going down because not all banks are not offering the 5% rates that everyone should have easy access to get - and interest rates need to go higher. The opposition wont do much either. We need more people employed productively to improve our supply of goods and services - both of these things have been damaged by Brexit and the increase in things like work from home, long term sick, benefit claimaints etc. Since there is considerable evidence that inflation is being driven by price-gouging, wouldn't it be worth considering price freezing rather than messing about with interest rates which so far seems to be ineffective? And perhaps a job guarantee might be a way to up productivity? But even if you disagree on that, shouldn't a democracy have different parties coming up with various solutions to current problems and the voters choose which one they think will work? Rather than all the major parties offering slight variations on the same strategy. Price gouging isnt the main driver of inflation. Its central bank money printing. If price gouging was a significant driver of inflation, companies would have done this a long time ago rather than now. Interest rates do work, but they need to be higher than the rate of inflation for a long time. 5% interest rates is not going to kill 10% inflation. People need to be encouraged to save money rather than spend it, and right now the monetary policy is not allowing that. Democracy is fine, but Labors solutions are not much better from what I see. As you say all the major parties just offer slight variations, there needs to be a complete shift in politics but that is too radical and will never happen. Until then we are stuck with stagflation. |
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Post by notoriousnobbi on Sept 13, 2023 13:01:18 GMT
Labour can’t tax and spend its way out of trouble, warns Blair Why does he try to limit the margin room of possible actions? Soundbites coming from the unpatriotic rich. You have to be aware that many European nations do in fact have higher taxes! And yes, citizens expect some goodies from that (that is not always delivered) Why, oh why don't you just simply be quiet about that, Rachel? Britain’s great tax con www.newstatesman.com/politics/economy/2023/08/britains-great-tax-con Even Andrew Marr recommends Harry Lambert's book! |
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Post by yggdrasil on Sept 13, 2023 13:02:56 GMT
Labour really are trying to limit expectations about anything improving, aren't they? It seems to be working for them but I would say there is a risk if they go too far down this "nothing will fundamentally change" path, people might reconsider what's the point of voting for them? Which actually gives Sunak (or perhaps more realistically, the Lib Dems, SNP, Greens and Plaid Cymru) an opportunity to outplay Labour to the left. If nothing else, I wouldn't be surprised if turnout for the 2024 GE is pretty small. There will be a lot of tactical voting just to get rid of Tories anyway going by the polling and by elections. It's more an "anyone but the Tories" than a pro Labour movement we are seeing. |
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Post by Deleted on Sept 13, 2023 13:14:41 GMT
Interest rates do work, but they need to be higher than the rate of inflation for a long time. 5% interest rates is not going to kill 10% inflation. People need to be encouraged to save money rather than spend it, and right now the monetary policy is not allowing that. Democracy is fine, but Labors solutions are not much better from what I see. As you say all the major parties just offer slight variations, there needs to be a complete shift in politics but that is too radical and will never happen. Until then we are stuck with stagflation. Interesting perspective. I don't agree with monetarism, but I imagine if I did I would find it endlessly frustrating how difficult monetarist policies are to sell to the public. Which I suppose is why some monetarists supported the likes of Pinochet who was able to suppress popular resistance to economic policies. |
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Post by Carl LaFong on Sept 13, 2023 18:16:54 GMT
Actually, Major left Blair's government a budgetary surplus.
That’s rubbish. There was a deficit of 3% of GDP when Labour won in 1997. |
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