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Keir Starmer has unwittingly revealed his sinister plan for Britain

In Europe
June 11, 2024

Sir Keir Starmer’s attack on the Conservative Party manifesto brought into sharp relief a question many have been brooding on for some time. Speaking in Middlesbrough, the Labour leader described the document as “a Jeremy Corbyn-style manifesto” full of unfunded pledges.

Set aside the fact that Sir Keir campaigned on precisely such a manifesto as a shadow minister in 2019, praising Mr Corbyn’s plans for offering “hope to the millions who have suffered after nine years of the Tories”. Set aside, too, his decision to run for the Labour leadership with a set of Corbynite pledges “based on the moral case for socialism”, or the questionable implication that his own plans are fully funded.

Instead consider the following question: Starmer has forcefully articulated what he is against. He is against Rishi Sunak, against Liz Truss, against Jeremy Corbyn, and against Sir Keir Starmer (2019-2021). But what is he actually for?

The assault on private schools, for instance, appears to be motivated by little more than class envy. The British tax system bends over backwards to avoid levying charges on education, which makes sense if you see education as a way of building skills: rather than tax the initial investment, you tax the eventual return (in this case, income).

Charging VAT on private school fees gets this perfectly backwards. It will discourage spending on education beyond the minimum provided by the state, push students back into state schools, and quite likely destroy the jobs of teachers who had the audacity to prefer the pay and conditions offered by private schools.

The curious thing is that Labour is clearly aware of these costs. Emily Thornberry admitted on air at the weekend that state school class sizes might have to increase, while teaching unions have issued public warnings about the potential effects on jobs. There are clearly less disruptive ways of raising revenue, if that’s the aim of the policy.

There are better ways of improving equality of opportunity, too. Access to good state schools – of the sort that many prominent Labour figures have attended – is still governed by the ability to pay. If you wanted to live near a top primary school in 2019, you could expect to pay £27,000 more for your home, for a top secondary, an extra £25,000. As a bonus, you would benefit from the efforts of elite universities to recruit state school pupils, and avoid having your child mix with scholarship boys from the lower orders.

To paraphrase the Canadian psychologist Jordan Peterson, the Labour Party is driven less by its great love of working Britons – who its MPs appear to suspect of holding inappropriate views on a swathe of social issues – than it is by its dislike of the rich. The assault on private education fits perfectly into this schema, and the suspicion is that the party’s other tax policies will, too.

Despite – or in part because of – a string of non-denial denials from shadow ministers, a consensus is beginning to emerge that a Starmer government would look to increase the rate of capital gains tax. This, again, would be a blow to the economy, leaving strivers and savers worse off, but again target the traditional class enemies of the Left.

At its core, capital gains tax is essentially a tax on saving. You take income, pay tax out of it, put it into an investment, and then pay tax on it a second time if the asset appreciates in value. Given that no allowances are made for inflation for individuals, you might end up paying even if the asset doesn’t change in “real” terms.

Increase the rate of taxation, and you make consumption more attractive relative to investment, encouraging people to spend rather than save. This, in turn, reduces the capital stock of the economy – the tools, buildings and equipment available to the workforce.

If Britain were a rich country labouring under an excessive supply of capital, and desperate to divest itself of its surplus of savings, this policy might make some sense. As it is, our problem is one of chronically low savings, with our current savings rate putting us near the bottom of the OECD league table, and globally somewhere between Zimbabwe, Ukraine and Burkina Faso.

In this context, Britain’s status as a productivity laggard – with British workers producing 15 per cent less per hour than their American peers – makes a lot more sense. As the economist John Van Reenen has noted, a recent slowdown in the accumulation of capital per worker goes a long way to explaining our post-financial crisis “productivity puzzle”.

Again, rather than looking at policies to incentivise saving and growth, the Labour Party appears to be happy to drive both down further, so long that it can claim to be attacking the unworthy rich – unworthy, here, being defined in its usual sense of “doing better than myself”.

And it’s here, perhaps, that the answer to what Sir Keir Starmer is for emerges. The only group the Labour Party appears to consider “worthy”, is, with a weary predictability, those in the employ of the state.

Run through Sir Keir’s five missions, and note just how many of them rely on the public sector hiring more workers or raising pay for staff. Then there’s the idea of lower retirement ages for ambulance workers, reportedly under consideration for the manifesto, and the notion that it could be extended for other NHS workers in the future. And until the idea was dropped, the party’s mooted reintroduction of the pensions lifetime allowance was discussed alongside potential carve-outs for NHS doctors and other groups deemed sufficiently worthy.

It’s not hard to envisage a world, a few years into a Labour administration, where the party has caved on pay rises for public sector workers, raised taxes to pay for them, and further restricted the ability of the economy to grow. To borrow a phrase from Margaret Thatcher, they “would rather the poor were poorer – provided the rich were less rich”.

It’s hard to think of a better summary of the current Labour Party: constant attacks on aspiration and the private sector with little interest in the consequences, while carefully preserving the privileges accruing to their public sector voters. If that’s what Sir Keir Starmer stands for, it’s no wonder he’s unwilling to say so.

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