Remember those “national missions” Keir Starmer mentioned in his New Year’s speech? In Manchester on 23 February the Labour leader will announce that economic growth will be the first of five. The Times hears that the key metric for this mission will be to make the UK the fastest growing economy in the G7.
The extracts from the speech released to the press suggest today will be a rehash of Starmer’s Liverpool speech last July (“Labour will fight the next election on economic growth”) and his New Year’s speech, when he railed against short termism in government (“I call it ‘sticking plaster politics’”).
The big drivers of Labour’s plan for economic growth are the £28bn green investment fund, an industrial strategy and plans for devolution. Labour’s economic policy is gradually filling out. But they have at best one side of a tax-and-spend policy. Add up the tax rise on private schools, scrapping the non-dom status and reforms on private equity and you get to around £5.34bn. Labour’s plans to raise taxes in 2019 amounted to £78bn. The government’s now-scrapped Health and Social Care Levy would have raised £12bn.
Tax revenue is the lifeblood of government. It’s what cabinet ministers scrap over. It’s key to whatever a government wants to do: assist an ageing population, bolster a hollowed-out armed forces or fund public services.
[See also: Is Keir Starmer setting himself up for failure?]
As George Eaton has pointed out, the UK is a relatively low-tax country. The tax take is forecast to reach 37.1 per cent of GDP by 2027-28, much lower than France (51.7 per cent), Sweden (49.9 per cent), Germany (46.3 per cent) and Canada (40.6 per cent). The enormous question mark hovering above Rachel Reeves’ office is tax policy.
Of course, the bulk of Labour’s policies will be announced at the general election. The electoral cycle, Labour sources point out, demands patience. That’s true: you can’t announce a new policy every time a commentator calls Starmer vacuous because: a) the public finances will change before the next election; b) you don’t want to give the Tories ammunition for a “Labour will steal your cash” offensive, and c) politicians are well-practised at policy plagiarism. (Just days after Jonathan Ashworth’s speech on disability benefit the government mysteriously announced strikingly similar plans.)
But Starmer has said the UK’s tax burden is too high (for working people, at least). We already know Labour is going for growth. But is Starmer’s shrewd pursuit of No 10 crowding out a radical tax policy? Obviously. But by how much?
A final thought: never write about speeches before they happen. You’re tempting fate. Best to go in person, listen live and report back. Wily speech writers put in a surprise announcement to get a second wave of media coverage.
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Keir Starmer plays divide and conquer with Northern Ireland deal