Party conference season is well under way and this week the Labour Party held their first conference as the governing party for 15 years. They, as would be expected, banged on a great deal about the legacy they inherited, but the good news is that they seem to have moved on from talking down the economy. And not before time. Consumer confidence is low, business investment is down, and there are anecdotal stories of capital flight from the UK in anticipation of the autumn budget.
Chancellor Rachel Reeves spoke in her speech about the poor economy, apparently confusing public finances with the wider economy. Public finances are in a poor way, due to help to the wider economy through both the covid crises and the energy price surge after the invasion of Ukraine. But the wider economy is doing well, with reasonable growth, lowering inflation, and low unemployment.
Reeves talked a lot about economic growth. We all agree that this is a good thing, and growth is something that we all aim for. But she talked about making tough choices in the upcoming budget, whilst maintaining investment into public services. Listening to her reasoning, I was just a little concerned she had a touch of the ‘Liz Truss’ about what she was saying. Truss’s idea was to increase money supply in the wider economy through unfunded fiscal measures. Look where that got us all (readers will remember I am not a fan of her one and only fiscal event).
All this is pitch rolling ahead of the autumn statement on the 30th October. Only then will we be sure about what is being proposed. The only thing we can be sure about now is that pensioners are still getting hit with fuel payment cuts.
Meanwhile, the Royal College of Nurses voted to reject Labour’s 5.5% proposed pay rise. It’s not surprising. In a classic schoolboy error, Labour negotiators revealed their negotiating red lines with junior doctors and train drivers. The government’s one objective, they said, was to stop strikes. So now all unions know that if they want more money, go on strike.
I want Labour to succeed. I went into public service to deliver a better world for us to live in. It would be churlish of me to want people to suffer just say “I told you so”. It’s not been a good start for the new government, but let’s hope things pick up.