I've seen nothing in Labour’s manifesto to encourage investment – a prerequisite to encourage growth and wealth creation

14 June 2024, 07:42

By David Buik

@truemagic68

In 2005 President George W Bush expressed concern that the world had no contingency plans for a global pandemic. It fell on deaf ears. No one listened. Consequently, in 2020 the world was economically savaged by Covid19.

The total death toll was 7 million. Governments across the world ran around like headless chickens doing what they thought was right at the time.

However, metaphorically it was like playing ‘blindman’s bluff!’ In the UK 227,000 perished from the pandemic. Over £400 billion was spent by the Johnson Government on furloughing 9 million people; some of it not properly accounted for.

There was an indecently large proportion of it - £4.5 billion, which was distributed indiscriminately to fraudulent claims. Though the Government’s proactive action saved the country from massive unemployment, this gargantuan sum money was borrowed and unsurprisingly it played havoc with the Government’s funding programme, damaging fiscal disciplines.

PM Johnson did not appear to have the skill sets to be PM at such a demanding period of history. In fairness catching Covid himself did not help. Decision making proved a nightmare, as the scientific advice varied and there was far too much prevarication from a relatively inexperienced ministerial team. Also ‘Partygate’ did not help enhance the Government’s reputation.

Whatever Government of the day, it was inevitably going to be thrown out at the 2024 General Election. Mitigating circumstances such as raging inflation, which reached 11.1% in 2022 and the Ukraine war, which precipitated an energy crisis were always going to be just endorsements of the crisis the government found itself in for four years.

There was also Brexit, which was only delivered in name, leaving many of the 17 million ‘leavers’ disenchanted with Government efforts to deliver the benefits.

Liz Truss, though some of her ideas to get the country’s economy moving more progressively seemed sensible, she arrogantly tried to bulldoze her radical ideas forward without proper consultation with the Bank of England or for that matter her Cabinet, throwing her Chancellor Kwasi Kwarteng ‘under a bus’ in the process.

This resulted in an adverse reaction from the Gilt-market, which triggered Rishi Sunak unceremoniously into number 10, with the solid Jeremy Hunt as his Chancellor!

At the end of the day, it was Covid and the damage it did to the Government’s coffers and to the health and wellbeing of the nation that was always going to kneecap the Government on Election Day. The public can blame immigration/migration, the demise of the NHS, the cost of living etc.

This was all peripheral damage. It was Covid! Let’s be frank. This pandemic has really taken its toll and the UK is, to all intents and purposes, broke.

Public services are generally poor. Nothing works. We have 2.3 million people between 18-50 currently unwell, resting or retired.

It is probably also fair to say that Labour would probably done worse than the Conservative Government during this unsettling period. Sir Keir Starmer and his shadow Cabinet would have kept us at home, doing irreparable damage to the economy.

Now here we are today, three weeks from polling day on 4th July, with a Labour landslide the likely outcome. The Tories are in freefall. No one is listening to anyone. There is general apathy towards the political parties. Nigel Farage proves great value as an orator.

The beer-loving loquacious former futures broker has entertained the milling throngs with is draconian ideas on immigration and having the drains up at the NHS – all inspiring stuff, but honestly of little consequence.

However, his Reform party is very popular and will give Labour a dangerously massive majority, barring a miracle.

I must confess I have not read the manifestos of all the parties from cover to cover. From what I have read and the comment on the content seems rather mundane and uninspiring. I leave the analysis of the financial data in the hands of the IFS’S vigilant Paul Johnson and to the clever and well-briefed economists such as Simon French of Panmure, Dr Gerard Lyons of Netwealth and the Policy Exchange and the independent economist, Julian Jessop.

Sir Keir Starmer talks of wanting to deliver growth and create wealth across the spectrum. I have seen very little in the way of stimulation in Labour’s manifesto that will deliver his goals. May I proffer some advice that I am sure he will not be interested in? To create wealth, you need investment. Inward investment is currently in short supply. Therefore, it is imperative to provide the incentives to deliver investment. Raising corporation tax, which Sir Keir or M/S Reeves have not dismissed, would be perceived as negative. So would increasing capital gains tax! The Government should immediately stop charging stamp duty on share trading. The UK and London are the only major financial centre to have this punitive and unnecessary tax. If Labour want all these wonderful green plans financed mainly through investment from the private sector, it must attend to encouraging global investors. The new Government should also dispense with the tourist tax, which would benefit much of an ailing retail sector, thus providing more money for a needy Treasury.

In closing; if Labour wants better public services, then it must encourage a healthy private sector to be very profitable – hence more money from tax to improve our beleaguered public services. So give business the tools to do the job, please!

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