It’s pretty clear that many of the policies adopted by Labour are little different from those pursued by previous Conservatives administrations:1) On the conflict in the Middle East, Keir Starmer supports Israel’s right to defend itself2) On the war in Ukraine, Starmer is in favour of sending arms to the Ukrainians3) On China, David Lammy is currently seeking to improve relations with the Chinese leadership, much as David Cameron did over a decade ago4) On income tax, Rachel Reeves will not introduce new bands to tax the rich5) On pensioners, Rachel Reeves has decided to withdraw winter fuel allowance, a policy considered but rejected by Theresa May6) On sickness benefits, Liz Kendall intends to tighten welfare payments, just as Mel Stride intended to do7) On the NHS, Wes Streeting intends to buy in services from private hospitals.The current Labour leadership (or most of them) are actually quite right wing, which doesn’t bother me, though I disapprove of the policies on China and the WFA. But though government ministers make statements like ‘Britain is open for business’, they cannot entirely divest themselves of two notions which have their origin in Labour’s socialist tradition. One is that private enterprise equals exploitation. The other is that the poor are poor because the rich are rich, so the duty of any government is to attack privilege and eliminate inequality. These two beliefs make Labour constitutionally incapable of running a market economy successfully. The first leads them to increase the size of the state. Public enterprises, which supposedly work for the common good, are seen as more honourable than private businesses, which are purely run for profit. So for example Labour cut Conservative plans to cut 66 000 civil service jobs and by the same token they awarded public sector unions inflationary pay settlements. It is not so much socialism as state capitalism.But to pay for all this Labour need to raise taxes. The second belief leads them to target those regarded as rich, hence the plan to impose VAT on independent schools, to tax non doms on their overseas income and, it seems, to raise employers’ contributions to National Insurance. Every one of these taxes is likely to backfire. The imposition of VAT on education will cause private schools to close, creating teacher redundancies and placing additional costs on the state sector (not to mention the unfair treatment of the children affected). Taxing the non doms willl cause many of them to move to other tax jurisdictions such as Italy, with a consequent loss to the Exchequer. And increasing employers’ contributions will ultimately lead to smaller pay packets for employees.
Steven Rose ● 7d