Britain is broken, but Labour still won’t say how it plans to fix it

From tax to migration, we know next to nothing about Keir Starmer’s plans - but the little we do is alarming

Source - Daily Telegraph 25/11/23

We really need to know what Labour would do if it got into office. There can be no more evasions, ambiguities, and repudiations of the past without clear statements about the future. In short, no more messing around. Let’s hear it.

Do they acknowledge that migration on the current scale is unsustainable? If so, what are their plans for dealing with it? Are they determined to spend more on what their unreconstructed Marxist wing calls “schools and hospitals” when what they really mean is public sector pay rises? If so, where will the money come from?

It isn’t enough to say, from higher taxes on “the rich” without saying who exactly they have in mind. Since the truly rich can simply move their wealth out of the country, do they mean anyone earning around half as much again as the average wage which is the current threshold for higher rate income tax? Will they raise taxes on private businesses which constitute the only effectively functioning sector of the economy?

There is only one way that any governing party can make the sort of spending commitments at which Labour is hinting. (I say “hinting”, because they do not offer any clear programme or detailed proposals.) They must raise more money either through borrowing – which is now clearly unthinkable – or taxation. But no election of recent times has been won – and one, the general election of 1992 which must be engraved forever in Labour memory, was spectacularly lost – by a party promising to raise taxes.

Indeed, it is tempting to go even further and say that no party in modern democratic history has won an election on such a prospectus, but it might be argued that the post-war creators of the welfare state did manage to do something of the sort. In fact, that moment of change in the popular understanding of what government was for, still dominates our electoral debates. Is it the proper business of the state to take responsibility for those who cannot (or will not) take responsibility for themselves? But I am getting ahead of myself.

The question for today is: how much do the two main parties disagree about the critical issues of what everybody accepts is going to be an election dominated by the cost of living, with mass migration and the housing market running a close second and third? A Tory chancellor has just announced a teeny-tiny cut in what had been an unprecedentedly high rate of National Insurance (income tax by another name) and even that miniscule reduction seems to have brought a small poll boost.

That’s what happens even before you get serious. Imagine what the effect would be of raising the threshold for basic rate and higher rate income tax to realistic levels – say, £20,000 for the former and £60,000 for the latter. Ordinary hard-working people in the public and private sectors – including the nurses and teachers whom Labour ardently supports – would think that all their birthdays had come at once.

Even if this were done in stages so as not to create too great a fiscal shock, it would have the most miraculous effect on national morale. Most important economically, is what those happy recipients would do with that extra money. They would spend quite a lot of it – which would stimulate growth especially if it was accompanied by supply side reforms – and they would invest or save the rest which would help to insure that they would not need the help of the state to survive in their old age. They would probably assist their dependents so that they too would need less government assistance. Some of it might go to help their children onto what was once known as the “property ladder”. (Remember that? The property market now is all snakes and no ladders.)

Let’s assume for the moment that this is a vision of the future that the Conservatives favour, and that they just might have the nerve to act on it sometime in the next year. Would Labour follow them down that road? It might have done under Tony Blair, but that was a long time ago – before the Corbynite fundamentalist resurgence. Could the tepid Starmer incarnation of Labour – a party which traditionally preferred to redistribute people’s money rather than let them spend it themselves – be willing to go there? The shadow chancellor, Rachel Reeves, has gone as far as saying she would not reverse the Tory NICS cut. Is that it? What would be the direction of travel from then on?

We know next to nothing about Labour’s positive tax policies. They brazenly attack the Sunak government for inflicting the highest tax burden in 70 years but that is where the rhetoric stops. The questions are so obvious that they seem simple-minded. If taxes are too high, which ones would you cut? If you do lower the tax take, how will you fund all those splendid public service improvements that you promise? And please don’t say, by cutting public sector waste and red tape. The public sector is inherently, incurably wasteful because the people who manage it do not see the cash they are spending as real money.

Then there is that other huge topic of the moment: unprecedentedly high inward migration, most of which is legal. The ethnic minorities who constitute a significant proportion of Labour’s core vote feel directly threatened by demands to limit their numbers. But if Sir Keir is unwilling to confront that problem, his traditional Red Wall supporters could abandon him. They might even, in their desperation, turn to a populist demagogue of the kind that is on the rise in Europe. To refuse to take a clear stand on this matter is morally irresponsible.

This election is going to be – even more than is usual – a fight for the trust of hard-working, middle income voters and those who aspire to join their ranks. They now feel completely abandoned by mainstream politics and they urgently need to know who is on their side.