July saw the one year anniversary of Labour getting into power. As anniversaries go, this was right up there with the Brexit Referendum anniversary in June.
On his first anniversary, you would expect the Prime Minister to be all over the media blowing his own trumpet (or any musical instrument involving wind for that matter) and doing a political lap of honour. Instead, he went on the Sunday morning political TV programmes to explain that he didn’t make Rachel Reeves cry during PM Q’s the previous week.
If ever there was a metaphor……the Chancellor of
the Exchequer in floods of tears behind a Prime Minister who carries on
regardless……oblivious to the train crash happening behind him. How apt.
When asked whether Rachel Reeves was for the
chop……Keir paused……and then didn’t answer the question. So, the financial
markets wobbled like only a Rachel Reeves chin can……the cost of Government
borrowing shot up……and then finally Keir confirmed……oh, go on then, she can
stay a little longer……pacifying all things financial for 10 minutes.
It was the most surreal political scene
since……Liz Truss’s 10 minutes of fame……no hang on, BoJo’s lockdown lies……wait,
Matt Hancock's
kiss / grope during Covid……(in fact, insert anything to do with the
Tories since the Covid outbreak).
The most remarkable thing about this Government
is that they have had 14 years to prepare for this moment. 14 years of saying
it’s their fault, followed by 1 year of saying it’s their fault from the other
side of the house.
Inspirational leadership it is not. A political
mess, it is. U-turns, incompetence, a split party, no direction, et al.
Labour were voted in to change things……but there has been no difference
whatsoever. Tory chaos rebadged with a red tie. Even Labour’s backbenchers have
had enough of the political ineptitude.
The key thing about politics is that you have
to get elected and then you have to deliver what you said you were going to do.
Wake up Starmer……20% of your time in Government has gone already. A majority of
165, yet he looks absolutely clueless. We need better. We deserve better.
And the biggest winner in all of this…… Nigel Farage.
Enough now.
The narrative dominating the numbers was the
Office for Budget Responsibility ringing the alarm on the ballooning trajectory
of public debt and the widening budget deficit. It was another reminder for the
Government of its perilous fiscal situation.
And the figures are not good reading:
- UK debt interest spending for the month jumped
to £16.4 billion, the second highest for a month since the records began
in 1993 (behind only June 2020, which was heavily affected by the
pandemic).
- Borrowing, essentially the difference between
public spending and tax income, was £20.7 billion for the month, up £6.6
billion from the same month last year.
- £1 of every £10 of Government spending
is spent servicing Government debt.
Big figures, which are compounded by the cost
to borrow.
The rate on the 30-year UK Government Bond
(or gilt) now stands at 5.43%, up from 4.67% compared to a year
ago. By comparison, the US equivalent has risen to 4.93% from 4.48%
over the same period.
It is clear that Reeves needs tax income……and
quick.
The biggest rumour seems to centre around a
wealth tax, which Reeves believes will raise around £10 billion.
However, 80% of the potential revenue will come from just 5,000
people……and 15% from just 10 people. So, it would just take a handful
of people changing residence and it could remove billions.
Another option is to remove the triple lock on
the State Pension (the promise to raise the state pension every year in line
with the highest of consumer price inflation, average earnings, or 2.5%).
Raging inflation and wage growth since 2021 has meant that the policy will end
up costing £16 billion by the end of the decade compared with original forecasts
of £5 billion. With inflation jumping to 3.6% this month (the
highest since January 2024), this is a strong consideration……but clearly not a
vote winner!
Keir was pushed and prodded on whether he was
ruling out extending the stealth tax. He refused to say whether the Government
would lift the freeze on income tax thresholds in 2028, as it has previously
stated. Freezing income tax bands for longer would drag an estimated 1
million people into higher rates by 2030.
No doubt further options will be rumoured but
this will be a theme running up to the Autumn Budget as the Chancellor will look
to raise as much as £30 billion.
Debt was a key theme also in the US this month
as The Trump’s ‘One Big Beautiful Bill’ passed through the Senate by one vote.
Estimates suggest the fiscal impact of the bill will add $2.4 trillion
to deficits over the next decade, with a total debt increase of $3.0
trillion.
Don’t panic though……The Trump is still flexing
his orange muscles as he threatens 30% tariffs on Mexico and the EU
bartering him down to 15%.
My favourite number this month was……6……the
little lady finishing Year 6 at Primary School with the School Girl of the Year
award tucked under her arm as she skips towards Senior School.
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Trump of the Month
I am not messing about this month. The Trump of
the Month award for services to lunacy has to be…… Keir Rodney Starmer.
End of.
No further questions your honour.
Trump Lunacy Rating: 10 / 10
And Finally……
“Incompetence is often highly regarded
in governmental circles.”
William Wallace
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