The Telegraph, 3rd August 2024
Keir Starmer's war on wealth has well and truly begun (telegraph.co.uk)
The Chancellor has been dishonest with the public in order to justify her high-tax, high-spend agenda
We all knew it was coming: not yet one month in office and Labour have wasted no time in trashing our record on the economy, U-turning on the Winter Fuel Allowance and the social care lifetime cap and, shockingly, claiming a £20 billion black hole has “suddenly” appeared.
Forget that they have just given in to union pay demands and increased public sector pay to inflation-busting levels, including a nearly 23 per cent pay rise for junior doctors, costing approximately £9 billion. Forget the £7.3 billion they’ve just thrown at a pointless “National Wealth Fund”, or the £8.3 billion to their new quango, “Great British Energy”.
In short: hello to the union paymasters, vanity projects and gimmicks. See you later pensioners, those in social care and savers.
Now, you may well say: the Tories had raised taxes, so is it really any worse? Well yes, it is. Just at the moment when inflation had fallen to 2 per cent, along with the much-needed cut to interest rates, and just when our economy had become the fastest growing in the G7, tax cuts would have been the right thing to do to galvanise the economy further and incentivise workers after years of bearing heavy tax burdens.
It is disappointing that, with wages up, the deficit, public sector net borrowing and unemployment all slashed since 2010 thanks to our prudence with the economy, we are about to see a screeching reversal of all that was achieved. The era of high-tax, big-state socialism has started. And with it, we can wave goodbye to growth. Just when we needed to incentivise enterprise, productivity, home ownership, working and saving, Labour’s plan creates more bureaucracy, a heavier tax burden and more dependency.
The Conservative government at least had started the journey towards cutting National Insurance, and even abolishing it altogether. But what is so dodgy – and that is frankly the best word to use here – is how misleading and underhand Labour have been about the plans.
Firstly, suddenly discovering a gaping £20 billion black hole – allegedly caused and covered up by us – is predictable and comedic but simply does not withstand scrutiny. The existence of the Office for Budget Responsibility means that concealments of this type are just not possible. But more confusingly, only a week before, Rachel Reeves had presented the Main Estimates to the House – that is, the spending plans for 2024-25. Nowhere was the catastrophic black hole mentioned. This raises serious questions of propriety, misleading the House and civil service conduct. The shadow chancellor is right to have asked them.
Secondly, judging by the casual nature with which Labour broke their promises on the Winter Fuel Allowance this week, we can safely assume the retired will be targeted. Coupled with scrapping the lifetime cap on care costs, we can foresee a future where millions who have worked hard, sacrificed and saved for decades will be punished in retirement for their diligence.
And lastly, while Labour have promised not to raise income tax, VAT or National Insurance this leaves a whole raft of areas where many millions of workers, savers, landlords and pensioners will feel Labour pains. Labour’s Budget Bingo must necessarily include increases to capital gains tax, council tax, pension tax relief (their ominous silence on this during the election was telling) and inheritance tax. Who knows, maybe even free prescriptions and the pensioners’ bus pass may go?
Labour’s war on wealth, prudence and personal responsibility has well and truly started. Founded on untruths, driven by misguided economics and motivated by class grievance, high-tax, high-spend Labour is here.
