Rachel Reeves Under Fire For Misleading the Public Over NI Increases

[Social Media]

 

Rachel Reeves has come under sharp criticism following her claims about Labour’s economic management, with accusations of misleading the public over her handling of national insurance and the broader economy. Former Bank of England official Andrew Sentance branded her statements as an "outright falsehood" amidst rising inflation and signs of economic strain.

 

The controversy centers on Ms. Reeves's assertion that her recent Budget safeguarded "working people" by avoiding increases to their national insurance. However, her policy included a £25 billion increase in employer national insurance contributions, drawing the ire of business leaders and economists alike. Mr. Sentance, who previously served on the Bank of England’s Monetary Policy Committee, challenged her claims, stating, “How can the Chancellor say this with a straight face? It is an outright falsehood. Businesses and economic forecasters have made clear that higher employer NI means higher inflation and a bigger wage squeeze for working people.”

 

The criticism came as inflation figures for November revealed a rise to 2.6 percent, the highest in eight months, further straining household budgets. This development is seen as jeopardizing hopes for a swift recovery, with some experts suggesting Labour’s economic measures are contributing to stagnation.

 

Adding to the economic unease, UK manufacturing has taken a hit, and retailer Shoe Zone announced store closures, citing the increased costs imposed by the Budget. Shoe Zone pointed to the hike in employer national insurance rates and a lowered income threshold, which made some operations "unviable." Retail and hospitality sectors, which often employ lower-paid or part-time workers, have been particularly hard-hit. Kate Nicholls, chief executive of UK Hospitality, echoed these concerns, stating, “We urgently need the Chancellor to rethink these changes to protect businesses and team members.”

 

The economic challenges extend beyond specific industries. Domestic business confidence has plunged, with reports of project cancellations and declining orders. Ben Jones, lead economist at the Confederation of British Industry (CBI), noted, “Domestic business confidence has collapsed in the wake of the Budget, which has increased costs and led to widespread reports of project cancellations and falling orders.”

 

In response to these pressures, the Bank of England is expected to hold interest rates at 4.75 percent, disappointing millions of borrowers hoping for relief. Hopes for substantial rate cuts in 2025 have been scaled back, with current projections indicating only two potential reductions instead of the previously anticipated four. Sanjay Raja, chief UK economist at Deutsche Bank, observed, “The MPC is some way away from declaring victory on inflation,” and warned that businesses may raise prices further to offset the impact of the national insurance hike.

 

Britain’s economy, once the fastest-growing among G7 nations earlier this year, has slowed dramatically, with GDP contracting in November. Inflation, which had fallen to 1.7 percent in September, has reversed course, climbing for two consecutive months.

 

As economic headwinds grow, critics argue that the Chancellor’s policies risk plunging the UK into stagflation, where economic growth stagnates while inflation persists. The coming months are likely to test the resilience of both businesses and households as they grapple with the consequences of these fiscal decisions.

 

Based on a report by Daily Mail 2024-12-20

 

 

 

[James105]

Pretty sure Liz Truss was hounded out of office for less than these morons.  No doubt there will be another budget in April to raise taxes again when they realise that a shrinking economy doesn't generate enough revenue to fund all their foreign aid, foreign climate aid, foreign terrorist aid and illegal migrant commitments.   

[Peter60]

10 minutes ago, James105 said:

Pretty sure Liz Truss was hounded out of office for less than these morons.   

Liz Truss crashed the economy, caused a panic in the money markets and wanted to give tax breaks to wealthy people with uncosted budget plans.  Her government left office with  22 billion black hole, the British public voted very clearly to kick out a corrupt, incompetent shambles. 

[Chomper Higgot]

18 minutes ago, James105 said:

Pretty sure Liz Truss was hounded out of office for less than these morons.  No doubt there will be another budget in April to raise taxes again when they realise that a shrinking economy doesn't generate enough revenue to fund all their foreign aid, foreign climate aid, foreign terrorist aid and illegal migrant commitments.   

Liz Truss brought the UK bond market and the UK’s Pension Industry to the brink of collapse.

 

Rachel Reeve has up set the hyper wealthy and a few absent but to let landlords.

[James105]

5 minutes ago, Peter60 said:

Her government left office with  22 billion black hole

 

Any evidence for that £22bn black hole?  Perhaps you know something that the OBR doesn't as they were unable to locate it.  They were only able to identify the £9.5bn that Labour gave away on inflation busting pay rises whilst moronically not asking for productivity improvements in return.  

 

Labour have increased spending by £70bn over the next 5 years so seem to be creating new black holes as this relies on 2% growth which is highly unlikely with anti-growth policies.  Any idea where that money is going to come from?  I think the pensioners and farmers are all tapped out now so a new target will need to be identified.  

[JonnyF]

Labour lying and ruining the economy. Nothing new.

 

They think they are being clever with all these "tricky" NI raises and omitting things from the manifesto that they previously promised to do. They are not being clever, everyone sees through it and they have lost the trust and the respect of the British public. 

 

A recession is imminent. 

[RichardColeman]

7 hours ago, Social Media said:

Rachel Reeves has come under sharp criticism following her claims about Labour’s economic management, with accusations of misleading the public over her handling of national insurance and the broader economy

Misleading = LYING.

 

About time the public could sue for misleading voters in an election mandate

 

 

 

[Jaggg88]

This is what happens when you put an accounts manager in charge of the budget. Nearly 3 million people have signed a petition calling for a new general election, citing the Labour Government's failure to deliver on the promises made in the lead-up to the last election. Two-tier Kier's ratings have gone from +11 to minus-38

[RuamRudy]

Headline asserts that she misled the public; article makes clear that she has been accused of misleading the public, clearly not the same thing.

Daily Hiel, heal thyself. 

[Nick Carter icp]

11 minutes ago, RuamRudy said:

Headline asserts that she misled the public; article makes clear that she has been accused of misleading the public, clearly not the same thing.

Daily Hiel, heal thyself. 

 

   That is the thread heading , the Daily Mails heading is 

 

Rachel Reeves is accused of 'outright falsehood' after claiming she protected 'working people' by not hiking their NI in her Budget

 

https://www.dailymail.co.uk/news/article-14207543/Rachel-Reeves-accused-falsehood-working-people.html

[RuamRudy]

4 minutes ago, Nick Carter icp said:

 

   That is the thread heading , the Daily Mails heading is 

 

Rachel Reeves is accused of 'outright falsehood' after claiming she protected 'working people' by not hiking their NI in her Budget

 

https://www.dailymail.co.uk/news/article-14207543/Rachel-Reeves-accused-falsehood-working-people.html

 

Thank you for clarifying 

[Bundooman]

Under fire is near enough.

A firing squad would be better!

[youreavinalaff]

On 12/20/2024 at 12:57 AM, Peter60 said:

Liz Truss crashed the economy, caused a panic in the money markets and wanted to give tax breaks to wealthy people with uncosted budget plans.  Her government left office with  22 billion black hole, the British public voted very clearly to kick out a corrupt, incompetent shambles. 

Blackhole? Is that the one that is yet to be proved?

[JonnyF]

7 hours ago, youreavinalaff said:

Blackhole? Is that the one that is yet to be proved?

 

They can't prove it because they made it up.

 

Gaslighting the public as Rachel thieves from the British taxpayer despite promising not to. 

 

Britain has made a huge mistake and will pay for it dearly for years to come. 

[RayC]

A more nuanced, less partisan view of the situation 

 

https://ifs.org.uk/articles/ps22bn-black-hole-was-obvious-anyone-who-dared-look

[mokwit]

On 12/20/2024 at 8:11 AM, James105 said:

Any evidence for that £22bn black hole?

It is the Holeohoax™. No line by line itemisation appeared as promised, and it could be plugged in whole by not giving Milibrand GBP22bn for climate change, or in part by not giving Africa GBP11bn for climate change*.

 

*sold to the people as fixing immigration at source - economic migrants are being positioned marketingwise as 'climate refugees'.

[Bkk Brian]

35 minutes ago, RayC said:

A more nuanced, less partisan view of the situation 

 

https://ifs.org.uk/articles/ps22bn-black-hole-was-obvious-anyone-who-dared-look

That site as you know has just copied an article from the Times from August and before the budget, not sure how relevant that is now over Reeves misleading the public over NI increases?

[RayC]

2 hours ago, Bkk Brian said:

That site as you know has just copied an article from the Times from August and before the budget, not sure how relevant that is now over Reeves misleading the public over NI increases?

 

I don't understand why the fact that the article originally appeared in 'The Times' has any relevance?

 

On the other hand, everything in the article is as relevant today as it was when it first appeared.

 

Does it excuse Labour misleading the public during the electoral campaign? No, but it might go some way to explaining why we are where we are now. The author's conclusion and prediction looks to have been accurate so far:

 

"The politics that led the Conservatives to cut £20 billion from national insurance contributions and Labour to rule out either undoing that or increasing income tax or VAT could come back to haunt us. The danger is that we will get a series of much more complex, uncertain and economically risky tax rises in their place".

[Bkk Brian]

1 minute ago, RayC said:

 

I don't understand why the fact that the article originally appeared in 'The Times' has any relevance?

 

On the other hand, everything in the article is as relevant today as it was when it first appeared.

 

Does it excuse Labour misleading the public during the electoral campaign? No, but it might go some way to explaining why we are where we are now. The author's conclusion and prediction looks to have been accurate so far:

 

"The politics that led the Conservatives to cut £20 billion from national insurance contributions and Labour to rule out either undoing that or increasing income tax or VAT could come back to haunt us. The danger is that we will get a series of much more complex, uncertain and economically risky tax rises in their place".

Its 100% relevant that its a Times article and a fairly good one at that. You give a link to a website that is not the Times but all it has on that page is a copied and pasted Times article. To question why I mentioned it is bizarre.

 

Anyway, its not on topic so has no relevance.

[RayC]

17 minutes ago, Bkk Brian said:

Its 100% relevant that its a Times article and a fairly good one at that. You give a link to a website that is not the Times but all it has on that page is a copied and pasted Times article. To question why I mentioned it is bizarre.

 

Anyway, its not on topic so has no relevance.

 

The article's contents are the same irrespective of whether it appeared in The Times, the IFS website or The Beano.

 

The fact that the IFS wanted to publish the article on their site is unsurprisingly given that the author (Paul Johnson) was Director of the IFS at the time. The IFS makes clear that they asked permission to republish it and the original source (The Times) is clearly acknowledged, so I really don't understand what point you are trying to make?

 

The article is very much relevant and on topic as it explains why Labour might have found it necessary to break its' electoral promise. Whether you accept this explanation is, of course, entirely up to you.

[Bkk Brian]

3 minutes ago, RayC said:

 

The article's contents are the same irrespective of whether it appeared in The Times, the IFS website or The Beano.

 

The fact that the IFS wanted to publish the article on their site is unsurprisingly given that the author (Paul Johnson) was Director of the IFS at the time. The IFS makes clear that they asked permission to republish it and the original source (The Times) is clearly acknowledged, so I really don't understand what point you are trying to make?

 

The article is very much relevant and on topic as it explains why Labour might have found it necessary to break its' electoral promise. Whether you accept this explanation is, of course, entirely up to you.

Again, I know what the article contents are:

33 minutes ago, Bkk Brian said:

Its 100% relevant that its a Times article and a fairly good one at that. You give a link to a website that is not the Times but all it has on that page is a copied and pasted Times article. To question why I mentioned it is bizarre.

 

Anyway, its not on topic so has no relevance.

 

[Patong2021]

Perhaps fiscal restraint and spending within the revenue stream would have been a more responsible first step?

 

[RayC]

51 minutes ago, Patong2021 said:

Perhaps fiscal restraint and spending within the revenue stream would have been a more responsible first step?

 

 

That's effectively what the Tories were offering at the last election. Was it enough to sustain - let alone improve - our public services? Imo no, and obviously the UK electorate didn't think so either.

 

The NHS is failing by many metrics. Will pouring even more money into it lead to an increase in productivity? Who knows but the omens aren't promising. It's one area where successive Tory governments' spending did keep pace with inflation but with little, if any, signs of improvement to show for it. Unfortunately, curing the NHS might not even be possible. I don't often agree with Anne Widdecombe but she's correct when she says that the NHS as it currently exists was designed to meet the needs of 1950's Britain, not the 21st century UK.

 

Education: Similar to the NHS, although funding hasn't been so generous. Will throwing more money at it on its' own improve matters? Doubtful.

 

Local government is a mess. It's true that some local authorities such as mine (Lambeth) are extremely poorly managed but spending in real terms is now less than it was in 2010. Is it any wonder that the housing stock is low, that council housing is in a poor state, that local provided social services are closing and/or being run down and that you can't go more than 20 yards without finding a pothole? Imo definitely an area where increased real spending is justified.

 

The transport infrastructure needs improvement. Ridiculous vanity projects such as HS2 should be canned (and imo should never have been started), and it's relatively easy to move around London and the South East, so limited spending should be needed there, but East - West transport links are appalling and local transport in conurbations such as Leeds/Bradford requires major capital investment.

 

Waterways and sewage: Largely Victorian architecture which requires major upgrade.

 

So, imo a major increase in public spending is justified (and requires funding). Whether it will lead to improvements in terms of productivity/ quality is another matter, but it's far too early to tell and therefore label this government a failure as many here like to do (this last comment is not directed at you).