Westminster Politics 2024-2029

[finneh]

It's almost like refusing to invest in both infrastructure and public servants for 15 years doesn't save money but definitely does reduce the quality of service. The whole country has seen false economy after false economy for so long it's hard to remember anything else. I mean, look at the civil service salaries. The senior people who are supposed to be providing both strategy and efficiency savings in e.g. the Department for Energy Security and Net Zero are paid less than a mid-level engineer in an oil and gas company. There's only 2 things that happen when you pay like shit for a concerted period of time, you either get shit, or you get people on the take. Sometimes it's even both (Met police anyone?).

It's difficult to say there has been a lack of investment given tax has been and is still at a historic high and we've been running a budget deficit since the early 2000's (through good times and bad). A misappropriation of investment absolutely... But that's a synonym for public sector investment.

I agree though we should be paying far more... If we had 35% less staff earning 20% more I'm sure we'd see an improvement.

 

[11101]

It's almost like refusing to invest in both infrastructure and public servants for 15 years doesn't save money but definitely does reduce the quality of service. The whole country has seen false economy after false economy for so long it's hard to remember anything else. I mean, look at the civil service salaries. The senior people who are supposed to be providing both strategy and efficiency savings in e.g. the Department for Energy Security and Net Zero are paid less than a mid-level engineer in an oil and gas company. There's only 2 things that happen when you pay like shit for a concerted period of time, you either get shit, or you get people on the take. Sometimes it's even both (Met police anyone?).

You might not be surprised to see that productivity fell in the well funded Blair years, rose very slightly during the time you say there was no investment under the Tories, and has dropped off again recently.

Productivity is measured as a proportion of input so removes much of the influence of funding levels.


The Department for Energy Security and Net Zero is a good example actually. They're fecking useless and the Net Zero crusade has left us with just about the most expensive industrial energy costs on the planet. They need an axe taking to them.

 

[TwoSheds]

You might not be surprised to see that productivity fell in the well funded Blair years, rose very slightly during the time you say there was no investment under the Tories, and has dropped off again recently.

Productivity is measured as a proportion of input so removes much of the influence of funding levels.


The Department for Energy Security and Net Zero is a good example actually. They're fecking useless and the Net Zero crusade has left us with just about the most expensive industrial energy costs on the planet. They need an axe taking to them.

It's really got nothing to do with net zero. The broken energy pricing mechanism is a legacy of Thatcher. I have no idea if it was a good system or not in the 80s but it's a fecking terrible one now. The department should be fixing that for sure but they could easily be doing that and organising a transition to cheaper green electricity. If you don't need to buy fuel it is cheaper, it's very simple. The government understands feck all about feck all though that's the problem, politicians and civil servants alike.

 

[TwoSheds]

It's difficult to say there has been a lack of investment given tax has been and is still at a historic high and we've been running a budget deficit since the early 2000's (through good times and bad). A misappropriation of investment absolutely... But that's a synonym for public sector investment.

I agree though we should be paying far more... If we had 35% less staff earning 20% more I'm sure we'd see an improvement.

That's exactly what I mean about false economies. Declaring a pay freeze every year doesn't save you money. Letting hospitals fall into disrepair doesn't save you money. Nor rail, nor roads etc etc. Your ongoing costs due to organisational failure, higher maintenance bills, higher energy use etc. will outweigh your "savings". And we've been doing this sort of short term fantasy economics for so long now nobody remembers anything else.

 

[berbatrick]

I don't think the point was that the NHS is providing no care whatsoever... At nearly £200b a year that would be a feat even the UK public sector would struggle to achieve. The point is it isn't delivering. Whether that's thousands unnecessary dying annually of cardiovascular disease, mental health waits leading to a the highest suicide rate in decades or thousands dying unnecessarily from delayed A&E care (among many others).

If your healthcare system is showing a degradation in care over a 5 year period that results in tens of thousands of people a year being welcomed to an early grave the "speak for yourself" will provide precious little comfort to those families. Also yes, obviously it isn't free when every worker on average pays several thousand in tax towards their (underperforming) healthcare.

Indeed, the level of care provided at a fraction of the spending in more privatised and modern systems of Western Europe and North America is remarkable:

About 25% lower than France, the closest big neighbouring country on here. Even less when compared with Germany. And of course, Switzerland and the US are off the charts.

It's quite possible that an across-the-board 25% spending increase will fix most of the problems. Especially given the remarkably low administrative costs from having an efficient nationalised system rather than an inherently inefficient privatised one:

 

[11101]

It's really got nothing to do with net zero. The broken energy pricing mechanism is a legacy of Thatcher. I have no idea if it was a good system or not in the 80s but it's a fecking terrible one now. The department should be fixing that for sure but they could easily be doing that and organising a transition to cheaper green electricity. If you don't need to buy fuel it is cheaper, it's very simple. The government understands feck all about feck all though that's the problem, politicians and civil servants alike.

They're not failing because they're underfunded, they're failing because they're doggedly pursuing Net Zero despite it costing us a fortune and cementing our reliance on other countries. It's ideology from the politicians and incompetence from the civil servants.

It's arguably the best example of government waste we have. Why would anybody want to give them more?

 

[Sweet Square]

He said: "We ended up treating all immigration as an untrammelled good. Somehow, politics ended up being too scared to say what is obvious: that some people are genuine refugees and some aren’t; that people coming here to work can be a positive, but that an island nation needs to control its borders.

Safeline is the only dedicated helpline for male survivors of sexual abuse and helps 2000 boys and men in England and Wales each year. It's totally funded by the government and costs £250,000 a year. But @SafelineUK is now facing closure after the government's decided to pull all its funding.

.

 

[Maticmaker]

This government is planning for the long term, whether it is successful is another matter.

 

[TwoSheds]

They're not failing because they're underfunded, they're failing because they're doggedly pursuing Net Zero despite it costing us a fortune and cementing our reliance on other countries. It's ideology from the politicians and incompetence from the civil servants.

It's arguably the best example of government waste we have. Why would anybody want to give them more?

You're saying words but they're not based on any observable facts.

Here's how the pricing mechanism works -

How the wholesale price is determined

• • National pricing: In Great Britain, the wholesale price is the same across the country at any given time
  • Trades between generators and suppliers: Trades between generators and suppliers set the wholesale price
  • The most expensive source: The wholesale price is determined by the most expensive source needed to meet demand

Would you say the problem is the cheap renewables or the fact that we pay renewable energy providers the same price as expensive gas peaker turbine electricity at peak times? It's all a scam perpetrated by the energy companies and in which successive governments have seemingly been complicit. It is the most important thing we could change in order to generate economic growth in my book, but the incompetent/corrupt folks at the Department of Energy /Ofgem never even look at it. And the politicians either don't know, don't care, or are in on it too.

 

[Frosty]

.

If it is the same Safeline charity, the Conservatives gave them a £415,000 funding grant in March to help combat suicide: https://www.bbc.co.uk/news/articles/cj7vlxvd530o. The Tories to the left of Labour on this one.

Also, the charity's helpline will have to shut (which is a huge loss), but not the charity. Interesting that the government state that the men affected can just use 'gender neutral' helplines to get assistance. Don't tell J K Rowling.

 

[Sweet Square]

If it is the same Safeline charity, the Conservatives gave them a £415,000 funding grant in March to help combat suicide: https://www.bbc.co.uk/news/articles/cj7vlxvd530o. The Tories to the left of Labour on this one.

Also, the charity's helpline will have to shut (which is a huge loss), but not the charity.

Thanks. Very Ratcliff vibes about Labour stance. There’s no way this policy would have any meaningful positive effect on the economy.

So it’s just cruelty for the sake of it.

 

[11101]

You're saying words but they're not based on any observable facts.

Here's how the pricing mechanism works -



Would you say the problem is the cheap renewables or the fact that we pay renewable energy providers the same price as expensive gas peaker turbine electricity at peak times? It's all a scam perpetrated by the energy companies and in which successive governments have seemingly been complicit. It is the most important thing we could change in order to generate economic growth in my book, but the incompetent/corrupt folks at the Department of Energy /Ofgem never even look at it. And the politicians either don't know, don't care, or are in on it too.

And why are we reliant on expensive gas? Because somebody had the bright idea to shut down all our energy storage capability and neglect the transmission infrastructure. So when the wind doesn't blow or the sun doesn't shine we have to turn on gas power plants and import the gas to run them, usually at peak times and peak prices. And as less than 50% of energy bills are wholesale we also have to pay a fortune to move it to where it needs to be.

In an ideal world we should be 100% renewable and nuclear but that's a pipedream, so we should be busy securing domestic energy capabilities with prices to reflect that.

And the reason for my loathing of the Department of Energy and Net Zero is that instead of doing any of that Miliband spends all his time fecking around with braindead projects like carbon capture.

 

[Superden]

so Badenoch doing a speech today at a conference hosted by Peterson et al, and basically copying JD Vance. These people are spineless.

 

[Pexbo]

so Badenoch doing a speech today at a conference hosted by Peterson et al, and basically copying JD Vance. These people are spineless.

It’s not spineless it’s coordination.

 

[Superden]

It’s not spineless it’s coordination.

exactly, doing as they are told by Trump and his acolytes, whilst banging on about patriotism and sovereignty. Same Tory party that less than 12 months ago was full square behind Ukraine not giving up an inch of territory.

 

[finneh]

Indeed, the level of care provided at a fraction of the spending in more privatised and modern systems of Western Europe and North America is remarkable:

About 25% lower than France, the closest big neighbouring country on here. Even less when compared with Germany. And of course, Switzerland and the US are off the charts.

It's quite possible that an across-the-board 25% spending increase will fix most of the problems. Especially given the remarkably low administrative costs from having an efficient nationalised system rather than an inherently inefficient privatised one:

Those figures are very dated. We're now spending more than Spain, Italy, South Korea, Japan, Australia, Singapore etc and only fractionally less than Belgium, Holland, France and Germany.

The issue is no longer what we spend, it's the horrendous value for money the extra funds ploughed into the NHS over the last several years have gotten us. We've effectively given the NHS £100b but because of productivity losses it's only translated to maybe £40b in additional services.

 

[TwoSheds]

And why are we reliant on expensive gas? Because somebody had the bright idea to shut down all our energy storage capability and neglect the transmission infrastructure. So when the wind doesn't blow or the sun doesn't shine we have to turn on gas power plants and import the gas to run them, usually at peak times and peak prices. And as less than 50% of energy bills are wholesale we also have to pay a fortune to move it to where it needs to be.

In an ideal world we should be 100% renewable and nuclear but that's a pipedream, so we should be busy securing domestic energy capabilities with prices to reflect that.

And the reason for my loathing of the Department of Energy and Net Zero is that instead of doing any of that Miliband spends all his time fecking around with braindead projects like carbon capture.

I agree with most of what you say here. Shutting down gas storage was dumb - Tories chose to do it, short sighted and foolish. Carbon capture is also largely bullshit, but it certainly would have been easier if they hadn't capped some of the places you could store CO2.

On the other hand, to the question of why are we so reliant on gas, the answer is, we've always been reliant on gas and we're trying to wean off it, but nuclear has generally been a disaster due to foolish government decision making and excessive costs. Coal (and Drax wood burning) isn't cheap, isn't green, isn't anything any more, and fuel-free renewables are easily the cheapest energy sources. They can't yet provide for spikes in demand or replace base load though so we still need gas. It will come but not yet.

If we commissioned new gas fields our dumb, corrupt fecks wouldn't secure any kind of good price for it, they'd still sell it on the world wholesale markets like they do now, so it would make absolutely no difference to your energy bills.

What would make a big difference would be to change the ridiculous electricity spot-pricing mechanism that effectively ties electricity prices to that of gas regardless of how it's generated, and to stop levying taxes on electricity but not on gas. If you were to levy even a small amount more of it on gas directlyand fix the spot pricing problem then electric solutions wouldn't be so unimaginably expensive, Britain would get greener, industry could thrive, and people would have more money in their pockets.

It cannot be as complicated as these cretins in Labour and before them the foul fecking ghouls in the Tories made it, and it needs a civil service that knows which way is up in order to fix it.

 

[decorativeed]

You're saying words but they're not based on any observable facts.

Here's how the pricing mechanism works -



Would you say the problem is the cheap renewables or the fact that we pay renewable energy providers the same price as expensive gas peaker turbine electricity at peak times? It's all a scam perpetrated by the energy companies and in which successive governments have seemingly been complicit. It is the most important thing we could change in order to generate economic growth in my book, but the incompetent/corrupt folks at the Department of Energy /Ofgem never even look at it. And the politicians either don't know, don't care, or are in on it too.

Thanks - you saved me explaining that myself. Saw an interesting interview with the CEO of Octopus saying the same. It prevents competition from renewable energy companies such as his and Ecotricity, because you are forced to pay the same as if you were buying the most expensiver fossil fuel energy, and to top it off, they add the green levies onto already green energy bills.

 

[decorativeed]

And why are we reliant on expensive gas? Because somebody had the bright idea to shut down all our energy storage capability and neglect the transmission infrastructure.

Yes - the previous governement did. Almost like it was done on purpose, with them actually wanting us to be reliant on the big fossil fuel firms and their 'dynamic pricing' models leading to their huge profits.

 

[Jericholyte2]

Seven months early.

 

[cj_sparky]

We've got two types of sizable renewable projects in my area with the Offshore Wind Farm 5 miles of the sea front that generates enough power to supply 400k homes and the 200 acre Solar farm just round the corner which has capacity for another 17k. They've also greenlit planning for a further 60 acres for solar generation along the motorway and have been threatening to build a hydrogen plant (to provide energy to use in London's buses, but not those locally) for a while now as well.

I'd love to believe that at some point we'll see some benefit, but I very much doubt it.

 

[berbatrick]

Those figures are very dated. We're now spending more than Spain, Italy, South Korea, Japan, Australia, Singapore etc and only fractionally less than Belgium, Hollans

That was 2017, this is 2022:

Still a remarkably efficient system, especially given the years of under-investment.

 

[decorativeed]

We've got two types of sizable renewable projects in my area with the Offshore Wind Farm 5 miles of the sea front that generates enough power to supply 400k homes and the 200 acre Solar farm just round the corner which has capacity for another 17k. They've also greenlit planning for a further 60 acres for solar generation along the motorway and have been threatening to build a hydrogen plant (to provide energy to use in London's buses, but not those locally) for a while now as well.

I'd love to believe that at some point we'll see some benefit, but I very much doubt it.

Sorry, why do you believe these have no benefit?

 

[finneh]

We've got two types of sizable renewable projects in my area with the Offshore Wind Farm 5 miles of the sea front that generates enough power to supply 400k homes and the 200 acre Solar farm just round the corner which has capacity for another 17k. They've also greenlit planning for a further 60 acres for solar generation along the motorway and have been threatening to build a hydrogen plant (to provide energy to use in London's buses, but not those locally) for a while now as well.

I'd love to believe that at some point we'll see some benefit, but I very much doubt it.

We've just finished a £450k solar project on our industrial units which will generate c. £125k of power per annum. On a sunny day it'll mean the business and electric car fleet will be c. 70% powered by solar.

Energy generation local to the needs of consumers and businesses is the key as it'll take years and years before the grid will be able to take wind energy off the coast of Yorkshire and use it to power energy hungry areas of the country like London.

At this stage it would make far more sense to use local pricing to encourage energy intensive businesses to relocate, taking advantage of dirt cheap energy when the wind is blowing, rather than paying to turn them off.

 

[cj_sparky]

Sorry, why do you believe these have no benefit?

Poorly worded on my part probably. I merely meant, I doubt that I or anyone else will benefit in terms of their bills for having these types renewables and that is despite them being so visible in my local area.

 

[finneh]

That was 2017, this is 2022:

Still a remarkably efficient system, especially given the years of under-investment.

Per capita we're still investing far more than Italy, South Korea, Spain, Portugal, Israel, Singapore etc and similar levels to Japan, New Zealand, Ireland. To my knowledge these countries aren't seeing tens of thousands of excess deaths per annum due to poor healthcare so "remarkably efficient" seems a huge push.

Singapore is remarkably efficient, spending a third less per capita with one of the best health systems in the world. The UK spending a middle of the pack amount with poor outcomes is not.

The below also shows a 25% increase since your figures.

 

[cj_sparky]

We've just finished a £450k solar project on our industrial units which will generate c. £125k of power per annum. On a sunny day it'll mean the business and electric car fleet will be c. 70% powered by solar.

Energy generation local to the needs of consumers and businesses is the key as it'll take years and years before the grid will be able to take wind energy off the coast of Yorkshire and use it to power energy hungry areas of the country like London.

At this stage it would make far more sense to use local pricing to encourage energy intensive businesses to relocate, taking advantage of dirt cheap energy when the wind is blowing, rather than paying to turn them off.

Yeah, I see the benefits of renewables. I meant from a bill perspective, in terms of having renewables with the capacity to power over 417k homes so visible and yet don't feel people will see any real reduction in cost (local or nationally)

I worked on a Helicopter Search and Rescue hanger that had all types of green tech. From solar, rainwater harvesting etc. Their Solar covered all of their energy use away from the vitals like their electronic equipment for the communications and charging in regards to the helicopters that was on a mains/generator back up.

 

[berbatrick]

Per capita we're still investing far more than Italy, South Korea, Spain, Portugal, Israel, Singapore etc and similar levels to Japan, New Zealand, Ireland. To my knowledge these countries aren't seeing tens of thousands of excess deaths per annum due to poor healthcare so "remarkably efficient" seems a huge push.

Singapore is remarkably efficient, spending a third less per capita with one of the best health systems in the world. The UK spending a middle of the pack amount with poor outcomes is not.

The below also shows a 25% increase since your figures.

So, again, no comparisons made with western europe, where the UK is, and where diet and demographics are more comparable.

About your graph, it would be nice to get a source (my sources for the previous graphs are from here and here). Though I would guess the difference is my 2002 figures are in US $ PPP rather than US $.

 

[finneh]

So, again, no comparisons made with western europe, where the UK is, and where diet and demographics are more comparable.

About your graph, it would be nice to get a source (my sources for the previous graphs are from here and here). Though I would guess the difference is my 2002 figures are in US $ PPP rather than US $.

I think it's difficult to argue that comparisons with Germany, France, Belgium and Holland are perfectly acceptable, but comparisons with Italy, Spain, Portugal and Ireland are not.

The UK for example has a younger population than most of the countries we've spoken about (excluding Ireland). France/Belgium for example have an older population, with Germany/Spain being much older and Italy/Japan moreso again.

The below also shows the lack of progress in outcomes compared with an ever increasing spend as a proportion of the economy relative to similar countries (from well below the median to well above, even before Reeves tax and (health) spend budget).

 

[Eplel]

Per capita we're still investing far more than Italy, South Korea, Spain, Portugal, Israel, Singapore etc and similar levels to Japan, New Zealand, Ireland.

I think a big portion of the UK's health budget is spent covering for deficiencies (that were created by lack of proper investment over the years) rather than actual investment.

For example, hiring more nurses and junior doctors would be an investment. Paying huge amounts in agencies for temporary staff to cover for the lack of nurses and junior doctors is not an investment.

 

[finneh]

I think a big portion of the UK's health budget is spent covering for deficiencies (that were created by lack of proper investment over the years) rather than actual investment.

For example, hiring more nurses and junior doctors would be an investment. Paying huge amounts in agencies for temporary staff to cover for the lack of nurses and junior doctors is not an investment.

This is why in my view you can't have politicians run the health service in a democracy. Politicians are solely concerned about 5 year cycles, because their only aim is (and will only ever be) to get re-elected.

Rachel Reeves budget is a prime example of this. If you were to say what is the absolute worst time to introduce a large tax on employment, it would be now - when the economy is stagnating, people are struggling with their bills (75% of the tax will be passed on through lower pay rises) and growth is our only way out of the shitshow we're in... However she knew that a tax rise 5 years before a general election would be far less damaging to her party than a tax rise, say, 2 years before an election where the economy has fully recovered from the pandemic and could sustain higher taxes.

The Tories likewise had similar choices back in 2010... Increase taxes hugely despite the damage it would do to a fragile economy, or cut spending. The easiest way to cut spending is to cut cap-ex, which in the long term has horrendous consequences, but in the short term keeps taxes lower and politicians more popular without showing a big short term degradation of service.

Both of these decisions were insane to anyone with a long term view of the country. If Osbourne wanted to lower spend on health there are many alternative unpopular but common sense ways to do that without cutting the only thing that would mitigate the increase in health spend long term. If Reeves wanted to increase spending on health there are many better ways to do this and at a much better time than clobbering working people and business. The same was true of furlough which went on far too long, was too generous and was applied too broadly - it's easy to throw £70b at a short term problem because "free cash" is popular... Much more difficult to be restrained because of the longer term impact it would have on the countries finances, enduring the obvious criticism that would follow for the long term benefit. Same with the energy price cap which ended up encouraging energy use at a time when usual price mechanics would have helpfully done the exact opposite (save for those in true energy poverty).

Politicians running healthcare can only really work in three scenarios to my mind: the first is the Blair scenario where the economy is going gangbusters and you can plough a shed ton of cash into the service every year. Nations do not perpetually grow at 3-4% per year so this option is only a short term one in a specific economic environment.

The second is you're hoping for a unicorn of a politician... Someone who has no regard for their own or their parties medium to long term popularity and only has the interests of the country at heart. Unfortunately unicorns do not exist.

The third is aligning the long term interest of the country with the interest of the politician. Unfortunately the only way to do this would be undemocratic (e.g. a dictatorship or a parliamentary term that would be unfeasibly long).

 

[decorativeed]

Poorly worded on my part probably. I merely meant, I doubt that I or anyone else will benefit in terms of their bills for having these types renewables and that is despite them being so visible in my local area.

Again, that's due to the silly pricing system we have in this country that means that regardless of where you buy your energy, how it is produced and who it is produced by, you pay basically the same as the most expensive energy.

A lot of people - including that CEO of Octopus I mentioned earlier - have been calling for that to change so that people who live near those renewable projects get to benefit from the fact it is the cheapest source of energy rather than pay the same as everyone else.

 

[Sweet Square]

 

[Frosty]

It won't be anywhere near enough. We are talking tens of billions more required if (big if) he is serious and not just window dressing. I don't think you can have the current NHS model and 5% defence spending, for example.

 

[V.O.]

Phew, I was starting to get worried for BAE's bottom line for a minute there.

 

[M16Red]

Seven months early.

Worst thing is I actually don't believe it on face value, I hope it's accurate.

Edit... ah,

The Prime Minister has welcomed new figures published by NHS England [today] which reveal that between July and November last year, the NHS delivered almost 2.2 million

Must have walked in on the 5th of July, opened a cupboard in the 4th bathroom and found the lever to increase NHS productivity.

 

[11101]

Worst thing is I actually don't believe it on face value, I hope it's accurate.

Edit... ah,

The Prime Minister has welcomed new figures published by NHS England [today] which reveal that between July and November last year, the NHS delivered almost 2.2 million

Must have walked in on the 5th of July, opened a cupboard in the 4th bathroom and found the lever to increase NHS productivity.

It was covered on the radio, the comparison is to the period when all appointments were being cancelled due to the strikes.

So an improvement, but not to the extent he's claiming.

 

[Balljy]

Energy generation local to the needs of consumers and businesses is the key as it'll take years and years before the grid will be able to take wind energy off the coast of Yorkshire and use it to power energy hungry areas of the country like London.

I'm a bit confused by this, wind energy is already a vital part of our grid and supplies just under a third of our electricity and more than gas does?

 

[neverdie]

Energy generation local to the needs of consumers and businesses is the key as it'll take years and years before the grid will be able to take wind energy off the coast of Yorkshire and use it to power energy hungry areas of the country like London.

They key is decentralized energy production altogether. Whatever the mix, the new generation of generators which will include those that use C02 as the "fuel" in carbon capture through mimicking photosynthesis as well as other schemes only just being announced now -- all of this will make paying for your energy redundant. No more energy bills.

This will happen, I am certain, within a 20 year period. The cost of these things will be sufficiently "down" over that period so that all can afford it. One off expenditures on generators for a house rather than constant electricity bills.

 

[Sweet Square]

Supreme court judges reject Reeves’ motor finance intervention​

Chancellor had sought to prevent lenders caught up in commissions scandal being handed £44bn bill

Rachel Reeves was dealt a fresh blow on Monday when her attempt to intervene in a high-profile supreme court case and curb a potential £44bn bill for lenders caught up in the car loan commissions scandal was rejected.

Judges at the supreme court rejected the chancellor’s application, lodged last month, in which she urged them to avoid handing “windfall” compensation to borrowers harmed by allegedly secret commission payouts to car dealers that arranged the loans.


The news weighed on lenders’ share prices, which had soared after the Treasury’s intervention amid hopes that it would reduce their potential compensation bill. Shares in Lloyds and Close Brothers, two of the biggest providers of motor finance in the UK, fell as much as 3.8% and 8.5% on Monday afternoon.

Reeves had tried to intervene after pressure from lenders, who have claimed that a massive compensation bill could disrupt the motor finance market. The chancellor was later forced to deny that she had caved in to lobbying by the financial sector or that she was working against consumer interests.

“There is nothing pro-consumer about making it harder for people to buy an affordable car for their family. That would be bad for working families,” Reeves told reporters on the sidelines of the World Economic Forum in Davos, Switzerland, last month.

Lobby groups have warned that huge payouts over the scandal – which some analysts say could rival the payment protection insurance (PPI) mis-selling saga and collectively cost lenders up to £44bn – could push lenders out of business, force them to offer fewer loans or raise interest rates to cover their bills.

The scandal ballooned after a court of appeal judgment in October, which vastly expanded a Financial Conduct Authority (FCA) investigation into motor finance commissions. The ruling determined that paying a “secret” commission to car dealers, who had arranged the loans without disclosing the sum and terms of that commission to borrowers, was unlawful.

Close Brothers and FirstRand are hoping to overturn that case at the supreme court in a hearing from 1 to 3 April.

Gary Greenwood, a banking analyst at Shore Capital, said news of the Treasury’s failed intervention would “come as a disappointment to the market”.

“Ultimately, the situation and potential outcome remains subject to significant uncertainty and, although the mood music had arguably been improving, this news highlights that the process will be far from straightforward in its resolution,” he said. “We hope that a common sense ruling can eventually be reached that punishes those that deserve to be punished while sparing those that do not.”

The supreme court on Monday also rejected separate intervention attempts by the customer campaign group Consumer Voice, as well as the Financing and Leasing Association (FLA) lobby group, which represents car lenders ranging from large high street banks such as Barclays to the finance arms of manufacturers such as Ford and Volkswagen.

The City regulator, the Financial Conduct Authority, will be allowed to take part in the case. The National Franchised Dealers Association (NFDA), which represents car dealerships, has also been granted the right to intervene.

Alex Neill, a co-founder of Consumer Voice, said the decision to reject its attempted intervention was “extremely disappointing”.

She added: “An overwhelming majority of car finance customers have told us they are concerned about the practice of dealers being paid commission. And it’s little wonder, as people trust their car dealer to act in their best interests when arranging finance. Yet, this trust is clearly being abused by some dealers in the market.”

The Treasury and NFDA were contacted for comment.

https://www.theguardian.com/busines...dges-reject-reeves-motor-finance-intervention

.