Key: Rob’s comments are in italics, Derek’s are in normal font.
Our topic today is Labour's plans for the British economy and how those plans appear to be highly divorced from reality. Which sounds like a big topic. Where do we need to start with this one?
The best place to start might be Rachel Reeves' statement in the budget. She said the only way to deliver economic growth is to invest, invest, invest. The first thing to say is that it's taken as an assumption, without debate or question, that economic growth will solve the problems.
Whether or not that's true, the next question is whether economic growth is actually possible, particularly in Britain currently. This would be very interesting as we talk about the budget.
Depends how many missiles you make, I think!
I've never seen many reports when they do a budget on what you or I would determine that to be. If we were doing a household budget, it would clearly state proposed expenditure and income sources.
The only budget reports seem to focus on tweaks to money collection methods, with little breakdown of actual spending. Another element in general conversation is the “cost of living crisis”, as though this is something like the weather.
I hate that term, despise the term cost of living crisis. Just call it what it is—the cost of lockdown is the hyperinflation associated with very damaging economic policies!
The trade restrictions and immense bureaucracy costs in trading with Europe since leaving the European Union haven't helped either.
Blowing up the fuel supply from Russia probably didn't help.
That probably wouldn't have helped, thanks to our friends, the Americans. Furthermore, funnelling enormous amounts of money into sending weapons to Ukraine doesn't help, not to mention the possible hazardous consequences.
Have you seen any indication whether we receive money from elsewhere in return for the weapons we ship over there, or are taxpayers paying for that?
I’m fairly confident it's the latter. It’s worth saying actually, the governments do not have their own money, they have our money. Or money that they've just made up out of nowhere.
Money imagined into existence degrades the value of the money the rest of us have, so it comes from us either way. The other reason for the cost of living crisis is the vast wealth transfer from us to billionaires during COVID.
This happened during the financial crisis due to mortgage manipulations in 2007 and 2008.
Keir Starmer stressed his objective has always been about fixing the foundations of the country—a nice vague term. This government has pledged to deliver one and a half million new homes by 2029.
Presumably for all the immigrants that have arrived over the last year, like a million plus in 12 months?
Well, presumably they'd have more than one per household if it's for them. This rate hasn't been achieved since 1977, when something more resembling a Labour government was in power.
The real house-building boom occurred under the post-war Labour government, building council houses for about £1,000 each. They were solid, well-constructed houses rented for about £1 weekly.
I don't know who will build these one and a half million houses, where the money will come from, or what living in them will cost, assuming it happens.
I'll tell you that - Taylor Wimpey et al are going to build them, and the money is going to come from us!
They're going to cost a fortune.
That's going to cost half a million pounds plus, yeah.
They've argued planning rules are the single biggest obstacle to economic success—so-called neoliberalism in its outset. They suggest stopping government interference with people who want to rip everybody off.
The future requires responsible thinking. Fixing foundations means considering the future responsibly. The benefits won't materialise immediately. Labour's challenge is modernising Britain's economic foundations—transport hubs, energy supply, planning rules, market regulations.
Since the 2008 global economic crisis, Britain's productivity growth has slowed from a claimed 2% to 0.4%. The measurement method for productivity growth remains unclear. Growth in GDP serves as a poor proxy for human well-being.
Claiming 2% growth assumes accurate inflation figures. To achieve 2% real economic growth, you must account for inflation. Official figures typically claimed around 2% inflation until last year.
Yeah, it's not apples to apples.
If they're claiming 2% economic growth in 2006-2007, raw figures must show 4% increased economic activity minus 2% inflation.
If official statistics underreport inflation at 2% instead of 4%, zeroing that out from raw figures shows no growth. With real inflation at 6%, despite showing 4% increase, the economy actually contracted by 2%.
I think you can manipulate these figures to show whatever you want to show...
Politicians should acknowledge economic growth hasn't really happened and isn't necessarily desirable. We should focus on what constitutes a viable life for everyone.
The latest buzzword is 'modern supply-side economics', coined by Janet Yellen as American Treasury Secretary. Supply-side economics suggests freeing up people's ability to pay rather than fixing goods and services delivery.
This coded message implies reducing taxes, especially for the rich, allowing people to decide how to spend their money.
Through the miracle of trickle-down economics, we'll all magically get richer in the process.
This breaks from the Keynesian approach of creating demand by putting money in people's pockets through real actions. The Americans did this in the 1950s building interstate roads, similar to Hitler's autobahn construction in the 1930s.
Hidden agendas existed in these cases. Hitler wanted autobahns for efficient troop movement. However, the economic logic remains sound. In the 1930s, crops rotted because people lacked money to buy harvested food.
Keynes proposed government projects like Germany's approach. This benevolent use of government money-creation paid workers who could spend in local shops.
Keynes never advocated irresponsible money creation. His idea suggested government intervention during economic crisis would generate increased taxes to repay infrastructure project debt.
The post-war council house-building boom produced tangible benefits. Recent government investment programmes show little comparable benefit. HS2 raises questions about life improvements.
It seemed like a massive scam to me, just the price of the project and the route it was taking. There's already a serviceable network in place.
Many people had houses compulsorily purchased unnecessarily. Has it been completely abandoned now?
I don't know actually. Yeah, haven't heard anything for a while, but yeah, the costs involved were crazy.
That money has gone somewhere. It's a mixture of traditional thinking and pie in the sky, but we'll see what happens next.
Assuming we survive the next couple of months, Trump's potential power transition could prove interesting. Even if Kennedy were blocked from becoming Health Secretary, it would open public debate about medical interventions.
So watch this space.
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