As Larry Elliott has noted in The Observer today:
After last week's emasculation of its green prosperity plan, [Labour's] storyline has changed. It now reads: the Tories have left Britain in a parlous state but if you vote for us little will change. We are continuity Conservatism.
Previously, Labour was going into the election offering a mild form of green Keynesianism as the alternative to stagnation. It will now be appealing to voters on the basis that it can run the status quo more competently than the current lot.
As he then notes:
[A] paper by [Lord] Stern and his colleagues demonstrates why borrowing to invest is consistent with financial prudence, but even were that not the case Labour could still fund its full green prosperity plan by raising tax.
As the tax expert Richard Murphy pointed out last week, two simple changes aimed at the better off would raise almost £28bn: charging the same rate on capital gains as is paid on income tax would net £12bn while restricting tax relief on pension contributions so everyone gets relief at the same tax rate, whatever their income, would raise a further £14.5bn, and make the system fairer to boot.
The Taxing Wealth Report 2024 is gaining traction.
Labour can't be missing it.
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Well put. And I’m delighted that you hard work might be paying off.
That money is better off going into green policies than lining the Labour’s campaign pockets.
But Starmer might have other ideas.
The elephant in the room remains party funding where a flat rate of funding for campaigning has got to be a prerequisite of any system calling itself a democracy.
This is a major nexus of change in our politics right now.
And then the Thatcherite perma-riff /loop in the music we’ve been listening too all these years will soon disappear.
This morning, Labour’s Pat Mc Fadden explicitly blamed the scrapping of the £28bn green prosperity plan on the rise in interest rates. The attached article by Jonathan Portes, from December last, would appear to invalidate this particular narrative. I would value any comments on the veracity of its argument.
https://ukandeu.ac.uk/dont-blame-debt-interest-for-the-fiscal-squeeze/
The claim is utterly absurd.
First, because as I show borrowing is not needed.
Second, rates will be 3% by sometime in 2025, and Labour could influence that.
Third, the borrowing pays for itself.
I have met McFadden to talk about economics. He made no sense.
Asking as a seasoned observer of the political scene, is there any subject he makes sense on?
Who?
McFadden
My apologies, I was unclear. I was asking about the veracity of Jonathan Portes argument in his article, which appears to invalidate the interest argument in itself.
It is a way of looking at the issue.
But as usual with Jonathon Portes, not the way I would look at it. He is, after all, a man who believes rules matter and it shows in this piece.
Interestingly I noticed that the New Statesman debate at the up coming Cambridge Literary Festival in April has immediately sold out. The motion is “This house believes the Labour Party is not bold enough to fix Britain”……clearly on many peoples’ minds.
Lying right at the heart of the argument that government has no money of its own and therefore operates on a credit card is the idiotic belief that an organisation like the UK government can owe money to itself!
The Bank Of England has told the politicians and voters it can freely digitally create money as reserves. It has refused to accept for accounting purposes it is owned by the UK government and therefore for the purposes of accounting can’t owe itself this digitally created money.
“We can use our bank reserves to buy bonds. The money we used to buy bonds when we were doing QE did not come from government taxation or borrowing. Instead, like other central banks, we can create money digitally in the form of ‘central bank reserves’.”
https://www.bankofengland.co.uk/monetary-policy/quantitative-easing
In short the UK government goes through the rigmarole of creating bonds which the BoE buys from digitally created money but pretends it isn’t owned by the UK government and therefore merely engaged in a mindless game of shuffling money around from one pot to another!
Keir Starmer and Rachel Reeves urgently need to do a basic accounting course and so do the leading politicians of all the UK’s other political parties to understand this sleight of hand!
In granting the BoE independence George Brown was bolstering the sleight of hand that allowed voters to think the central bank wasn’t part of government. The Labour Party has been hollowed out by deceitful right-wingers like Brown whose rightful home is in the Tory Party!
Worrying article by George Monbiot
https://www.theguardian.com/commentisfree/2024/feb/11/keir-starmer-labour-party-british-democracy
Indeed
It might be unfashionable, but I really do think that a ‘deep state’ like situation exists already in this country in broad daylight – namely the Establishment’s continued interference and exploitation of our political system, now turbo charged by the nouveau riche created by Thatcherite policies.
One arm of this operation is the Privy Council for example. Another was revealed during Covid crisis in the PPE procurement scandals and the ‘chumocracy’ and Mone scandals. And of course there is private political funding and the policy responses to that undermining the election process which to me is completely unacceptable in a democracy.
The engine room of our reversion to a pre WW1/WW2 state and the negation of social improvements after two world wars lies with our Establishment and the deracinated global roaming rich who basically have too much power.
Quotes from A Green and Global EU
‘… these Eurosceptic movements are on the lookout for a new story to tell. The energy transition, if ill managed, could provide them with powerful new ammunition. This would endanger a green Europe, the revival of the European project, and the future of liberal democracy all at the same time.’
‘Given the exquisitely political and policy-driven nature of this energy transition, addressing its social, economic and therefore political and geopolitical consequences is essential. An ill-managed European transition, which does not do so and which fails to draw the rest of the world with it, could end up being catastrophic. It would be catastrophic because of the social and economic disruptions it would cause both internally and internationally. These would reverberate politically, putting at risk liberal democracy, as well as geopolitically, by unleashing security, economic, social and political disruptions that would boomerang back to Europe. Whereas a green Europe signals a revival of the European project, a failed, stalled or reversed European energy transition could seal its demise. An ill-managed transition would be disastrous also because it would turn back the clock on Europe’s net zero goal and on the rest of the world’s by representing an example for others not to follow. In short, whereas a successful European energy transition holds the promise to revive Europe politically and economically, while contributing to saving the planet, a failed transition means exactly the opposite. The stakes could not be higher.’
“Labour’s ideological vacuum”
Is that a quantum political vaccum where political particles/ideas/proposals pop into and out of existence, leaving nothing behind?
I think that LINO should be applauded for finally linking the political and quantum domains. Three cheers for the linked Starmer-Reeves non-particle & their contributution to a better understanding of the quantum political domain, and the role of quantum political policies.
It’s been a long day. I think I’ll have a lie down now.
Me too…..
As I suggest Starmer and Reeves taking a basic accounting course would fill Labour’s ideological vacuum! Namely in order to understand that contrary to Gordon Brown’s sleight of hand the BoE is part of government and two parts of the same single legal entity can’t owe each other money!
For the last thirty years or so I’ve belonged to social walking clubs that do walks in and around London, particularly at the weekend s. Most weekends I’ve done a walk, they are usually a great way to maintain one’s sanity; the combination of exercise, scenery, talking to people I otherwise wouldn’t meet, and a pub meal is wonderful.
Yesterday we did a walk from Richmond to Hammersmith along the Thames path.
Following all the recent rain the Thames was really high with a strong current, far faster than a human being can swim. On the other side of the path the fields were flooded; someone who is familiar with the area said they’d never seen it like this before. At one point I was down to my T shirt as it was so mild. Green parakeets were much in evidence. And because it was SW London we were under the Heathrow flight path. At intervals of 2 minutes another plane came in, hour after hour.
And last week labour dropped it’s commitment to green investment. Climate emergency, what climate emergency!?
Rivers around here were very high yesterday – and flooding – becaise of already sodden ground and one night of addiitonal heavy rain
The system is at breaking point.
Exactly Richard. But don’t tell the worse than useless tories or useless labour parties that. They don’t want to know. Our political system is also at breaking point. To be told that we can only have one of these two parties in power when neither has a clue about how money works, or what the government can really do if it wants to is an insult to peoples’ intelligence.
Thank God for someone like you. Delighted to see your Taxing Wealth Report 2024 is being noticed.