Saturday, 24 August 2013

It Will Cost You

"There is no such thing as a free lunch" said Milton Friedman and many other people before and after him. And he is right. If the Labour Party gain power in 2015 everyone in the country is going to see their costs rise dramatically.

Under the last Labour government we had lots of money spent in the country on benefits, the NHS and education, to name but a few areas. What were the results? With benefits the Government gave people more money than most working people could dream of. There were 13,000 deaths covered up by the Labour Health Secretary, Andy Burnham. Our education system also decreased in quality and fell down the world rankings.

The main problem was that Labour just threw money at things and thus it was virtually all wasted. But that money had to come from somewhere so if it wasn't through borrowing, which is now a £19,000 weight around every person, it was through tax rises. Under Labour, especially towards the end when the current Shadow Front Bench were in control, petrol prices continually went up, the 10p tax rate was scrapped and council tax was raised 27 times.

The days of Gordon Brown we saw the biggest assault on people's cost of living ever made by a Government.

And now they want to do it again. Under Ed Miliband, as Gordon Brown's Energy and Climate Change Secretary, energy bills doubled and now he wants to increase them again by carbon targets which will force even more people into fuel poverty. This is on top of the their continual support for increasing subsidies for inefficient energy sources such as wind turbines which this government has cut. 

Petrol too is another area Labour will target. If Labour had won in 2010 it would be 13p more expensive at this moment to fill up a car. There would still be 6 more planned fuel duty rises by Labour after 2015 had it not be for the Conservatives in Government. What's to say Labour won't bring these back in 2015.

It has already been signalled by the markets that Labour's plans for more debt will raise borrowing rates and that will have effects on all sorts of things. The hardest hit from that would be those with a mortgage who will see £1,000 added to their bills if borrowing is raised by only 1%. It could of course be higher.

Labour also want to cap pension spending which means no more Triple Lock mechanism for pensioners that they would always see a pensions rise. The Triple Lock means that pension will rise by either the amount of inflation, the average rise in earnings or 2.5%, whichever is the highest. That's all set to go with Red Ed at the helm.

Of course Council Tax will also rise under Labour, like it has done in nearly every single Labour controlled council. Labour councils have seen a doubling in their bills of late whilst the average Conservative council reduced their tax bill by 9.3%. When Ed Miliband says he is opposed to these freezes it is clear we will return to the past where council tax rose and rose and then rose again.

This of course forgets the main problem with a Labour Government and that's an increase in debt. It is calculated that each family would owe just shy of £3,000 extra if Labour are allowed to borrow £50 billion more as they have planned. Where will that money be spent? Well we can tell from their opposition to a benefits cap that benefits will rise. It's also clear that more waste of time infrastructure projects will continue like HS2. Imagine a HS3 or 4, this country would be broke pretty soon. 

But how much will this add up to for you? Well you can now find out at where it asks you a few simple questions about what you do and calculates exactly what a Labour Government would cost you. Some people could be over £2,000 worse off! I tried it and if I was still a student, which I won't be shortly after the next general election, I would have to pay £125 extra (plus the debt of course). But  when I leave Nottingham it will be a sad day in two ways because my costs would rise to £519. Excellent. If you are planning to vote Labour you may need to start saving now. 

I'm critical of most government moves to raise the cost of living. I do it when the Conservatives back HS2 and I put pressure on them to lower Energy subsidises. Somebody needs to say something about the costs that the majority have to face for just living. Some people would say this government has not lived up to expectations of cutting living costs, which I think is unfair considering they have done a lot of good things, for example a £700 cut in income tax for 25 million people. But imagine what it would be like under Labour and Ed Miliband.


  1. Oh look proof of a failing government! They´ve started rubishing the opposition nearly 2 years before the ellection because they have no real policies themselves. And of course, we won´t talk about borrowing under this government either, much, much higher than prommised, but then again what´s a Tory promise?!

  2. I think the fact the Government is on the attack doesn't mean it is failing, all governments have done it all the time. You may also like to know that the Conservatives are actually doing a lot of promotion at the moment especially on the economy.
    On the borrowing aspects I do think that borrowing under this government has been to high. I would want it much lower. The government overestimated the struggle they would had and didn't cut enough. But are you seriously trying to tell me that Labour would have it lower when they promise to borrow more, such a statement makes no logical sense. Labour's promise to cut the deficit as well is completely laughable. At least the Conservatives are going the right way.

  3. Shockingly, this government realised that boundless cuts weren't going to maintain growth so tried for a balance. Unfortunately, they got the balance completely wrong, meaning they never matched the growth in gordon brown's last quarter and the one immediately following (see: Time Lag).