The Labour manifesto should be judged by its probable consequences, not on whether we would enjoy the freebies it promises.
Under Jeremy Corbyn, Labour has launched its most openly socialist manifesto since Michael Foot’s “longest suicide note in history” of 1983. Corbyn has survived a bid by his MPs to oust him, and he has been forced through lack of mainstream parliamentary support to appoint a Shadow Cabinet of astonishingly unprofessional quality.
The Blair-Cameron consensus – that an economic structure favouring free markets and low taxation, combined with generous levels of state intervention to redirect the proceeds of growth into public services and welfare – has evaporated. Cries that Corbyn’s socialist policies will take us back to blackouts and the three-day week are scoffed at by Britain’s youngest voters.
So let’s examine the Labour manifesto. Let’s look at the policies, not the rhetoric.
Pay and ‘Workers’ Rights’
Company bosses will be banned from earning more than 20 times their lowest-paid worker. This is an egalitarian gesture, but what will it achieve? Britain’s most profitable industries are also the most able to up sticks and relocate. Introducing executive pay caps will not increase the wages of workers, but incentivise companies to move overseas.
To address the problem of driving wealth creators away, a world government would be required to prevent tax-regime shopping. Perhaps some of Corbyn’s supporters like this dangerous idea, but it’s unlikely to be achieved in our lifetimes.
The idea that the state should be involved in telling companies what they can pay their workers is a mistake. To begin with, it’s a violation of individual liberty. Free economies are predicated on freedom of contract. This involves the liberty to exchange one’s labour for whatever another is willing to pay. An individual is entitled to earn whatever he can honestly.
At the other end of the pay-scale, Corbyn proposes a £10 minimum wage, turning the figure into a political football rather than a calculation by independent experts. Exorbitant minimum wages are inflationary and cause job losses. Rather than paying workers more, companies (including many small businesses) with thin profit margins will simply go out of business or lay workers off as they cannot afford their rising wage bills.
In a further manoeuvre in the ‘war on wealth’, those earning over £80,000 per annum stand to face income tax rises. What could be fairer than this? After all, earning more than £80,000 places you in the top 5% of earners. But tax rises do not always raise revenue. The purpose of tax should be to raise money for the government, not to punish high-earners.
The 300,000 wealthiest already pay a quarter of the overall UK tax burden. The wealth gap has indeed increased, but this is due to the skyrocketing wealth of the top 1%; the middle and upper middle classes are not accelerating away from the pack. Hitting professionals on moderately high incomes is an act of spite that once again treats the economy as a zero sum game, rather than a pie whose size can be increased.
In a truly self-destructive move, Labour will increase Britain’s corporate tax rate to 25%. Britain’s low corporation tax is one of the many reasons that private sector job growth has halved unemployment from 8% to 4%, nearly eliminating joblessness in the UK without the state engaging in artificial public sector job-creation.
Raising this rate treats entrepreneurs, employers and wealth creators as villains in an economic pantomime, punishing them for generating jobs for Britain’s subjects. It’s true that Britain has one of the lowest corporation tax rates in Europe – and that’s partly why its recovery since 2008 has exceeded that of its European neighbours.
Britain now manufactures very little, and must make its way in the world by what it buys and sells. We take our first-world living standards for granted, but the truth is that we are still living off the proceeds of early industrialisation and exploration. If we cannot encourage companies to set up and do business here, we face the backbone of our economy evaporating like France’s under Hollande.
Labour estimates that its tax increases will raise £47bn in extra revenues. This brazenly falls short of its proposed spending increases. Without this shortfall, Labour has failed to account for the fact that the £47bn total depends on current levels of earning continuing despite the hikes.
Labour has attacked the Tories’ record on the deficit. This is doublethink.
It’s true that the Conservatives should have done more to bring the public finances under control during the course of this Parliament, but the drastic nature of the measures required to do so would have outraged even centrist voters. No honest Labour supporter can criticise the Tories’ record on the deficit without blushing, as it’s clear that Corbyn’s proposed profligacy would leave the Treasury in even more dire straits than it is now.
The first rule of economics is that resources are never adequate to meet demand, and the first rule of politics is that political parties always ignore the first rule of economics. The reality is that Britain is facing an ‘inverse pyramid’ in which a minority population of workers is supporting a majority population of dependents, mostly due to increased life expectancies.
Every reduction in state expenditure is described as an underhand payout to benefit the rich, but no limits on the legitimate domain of government are ever offered by the Left.
A dose of realism is needed: politicians must start being honest about the limitations of the state’s capabilities and the need to correct the balance of the public current account. Britain cannot borrow from China indefinitely while it fails to live within its own means, and the sooner politicians take responsibility for communicating this message to the people, the better.
Labour also plans to abolish all university tuition fees. It could perhaps work if it were to be recognised that tertiary non-vocational education is not appropriate for everyone, and if public funding of higher education were directed in a more focused way at a smaller group of more selective universities, while opportunities for more vocationally relevant training for others could be expanded. Instead, we see Labour decrying the falling numbers applying to university and committing to the state covering the full cost.
Defence and Security
Corbyn has been forced by his party effectively to falsify his true views on security, in order to stop the party becoming even more unelectable than it already is. He holds biased views on Israel, condemning all Israeli excesses while making excuses for Islamist violence. He wishes to reduce the Armed Forces to the level of a local defence force, has publicly stated that as prime minister he would never press the nuclear button (something that no prospective Western leader should ever say, even if they believe it, for obvious reasons), and opposes shoot-to-kill policies in counter-terror operations. Enthusiasts describe Corbyn’s views as ‘ethical’. Pacifism is vanity, not virtue.
Corbyn clearly dislikes Britain and is ashamed of its role in the world. Many readers of this publication may have been trained in post-colonialist thinking by Left-wing academics and postmodernist writers. But for all its faults, Britain is the country that: defeated Napoleon’s plans for world domination; ended the slave trade; invented modern parliamentary democracy; developed the notion of limited government and the common law; helped the US defeat the threat of the murderous, totalitarian Soviet Union; and, of course, stood alone against Hitler when Europe stood overrun.
To regard the United Kingdom as beyond rescue and redemption on account of historic imperial crimes is to consign one’s own country to the recycle bin of great nations, and to deny our future potential to benefit humanity and serve the good.
A threat to Britain’s security and prosperity
Everything about Jeremy Corbyn declares him an ideologue of the worst kind. Wherever socialism has been tried, it has been proven an abject failure, consigning populations to the indignity of state handouts as prosperity collapses around them. The intellectual errors of socialism have been established beyond all contestation – and yet we see them resuscitated in 2017. Labour indulges in utopian fantasy when the British people need a serious choice before them at a time of great change. Voting Labour may assuage your conscience and establish your purity in the eyes of your peers. Neither of these are worth the consequences of their victory.
Gavin Rice teaches Philosophy & Theology at a leading British independent school and read Theology at the University of Cambridge.
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