Convincing the world that the UK is a broken country and a place of misery is a strange strategy for a Prime Minister. Promoting and incentivising the private sector, the country’s growth engine, may surely prove more productive and in line with electoral promises. Growth will only result if the populace feels motivated and energised.
STARMER’S STATE OF THE NATION SERMON
“Wealth creation is my priority” and “Judge me not by my words but by my actions”, consistently with pre-election promises the Prime Minister, Keir Starmer, delivered his sermon from the rose garden at 10 Downing Street on 27 August. Many consider him a serious man and a man of high morality. For the sake of the UK, it is hoped he proves to be a Prime Minister of good judgement with the interests of the whole of the UK populace at heart, not just those of his followers. His mantra is to serve, and especially to serve working people in the wide sense, but also all citizens. And he promises to be pro-business. Is being all things to all men really possible? It is early days and too early to judge from any results but there is the sense of impatience growing in some media circles for more meat than he has thrown them so far.
Is perhaps his manner a little bit righteous? He repeats the words honesty and trust over and over. Perhaps it is wise to view with a little scepticism, if not suspicion, those who keep telling you that they can be trusted and how honest they are. He is entitled to a little exaggeration and hyperbole, as are all politicians when being adversarial. However, care is needed. To say, as he did, this Government has done more in seven weeks that the last government in seven years is a bit too trite and silly perhaps. That he spent most of his speech laying out the parlous nature of the rubble and ruin , and the rot, which is his inheritance and that he laid the blame for recent riots in effect at the feet of Rishi Sunak indicates where he is most comfortable. Perhaps inevitably for a prosecutor by trade, he clearly enjoys laying into his prey and not letting go, but is this being used to demonstrate toughness but disguising a dearth of real ideas?
This was the style and substance of his approach during the pandemic and afterwards, with endless repetition that Tories are liars and corrupt to the core, knowing that repetition of accusation is enough to make dirt stick, when of course the generalisation is misleading. In these pages the concern has previously been expressed as to whether a civil servant, an ex DPP, a lawyer specialising in human rights, without any commercial experience or without having led anything more vibrant than the prosecution service has the skills to successfully lead the country in difficult times. His u turns on policy and beliefs through the last few years is legendary. But his courtroom prosecution skills may impress with his serious tones and sternness. Time and actions will tell, and like all people he will need a bit of luck.
He said he is busy laying the foundations for growth. This for him means he has to clean out the Tory Aegean stables first. Is this clean out demonstrating a clear path to wealth creation? After all it is people through hard work, doing that bit extra, innovation, entrepreneurial risk taking and investment, with incentives to succeed, that will create that wealth.
CLEANING THE AEGEAN STABLES
The financial ruin that he and his colleagues claim is their inheritance may be exaggerated as suggested in these pages earlier. Of course, the public purse is under severe strain, as is the case in almost every country, following Covid and the wars and supply problems that followed. The £22 billion black hole is a matter of debate, which is the explanation today for every “tough decision”, and not a true number as it accounts for pay awards to date made by this Government and those awards are generous: independent commentators recognise this accounting conclusion is questionable. Those awards may be in the interests of the UK or may not be, but they are certainly not inheritance, and they total some £10 billion. Financial claims of the cost of the previous approach to immigration and asylum seekers as made by the Home Secretary, Yvette Cooper, are seriously questioned by some who claim that the new approach, though the plan needs more flesh, is even more expensive. Nick Timothy, albeit a conservative, has written vociferously in the Daily Telegraph of 26 August about this ” shameful migration lie”, saying that the numbers “were a work of political fiction”. The plan apparently is to deal with the huge number of asylum claims by accepting them, and also with future claims. According to the Home Office, he says, over 63,000 immigrants previously due to be deported will have their claims heard and largely accepted. This moves them from a Home Office specific budget, which is public, to the welfare and local budgets which are not specific. More accounting wizardry? Whatever the truth, there are clearly questions to be asked and answered over financial figures being bandied about and used to feed the narrative of ruin: is this honest transparency as promised?
As to Union disputes settlements, the doctors got 22%, with no strings attached. The ASLEF train drivers got pay rises backdated for 3 years, totalling 15% going forward, with no deal on changing working conditions. They work 4 days a week for 35 hours, with no obligation to work weekends which are paid at overtime rates. Rightly the Government is honouring pay awards for those public sector employees recommended by independent bodies. But now all other rail Unions are lining up for comparable settlements as for ASLEF drivers. The PM justifies the drivers award by saying we need trains to operate to get people to work. Is that not a justification for doing a deal rather than a justification for demanding nothing in return?
Other settlements in due course will likely add billions more to the bill. Maybe too those such as nurses who settled for far less months ago will see the chance to have another bite. It is fair to ask the question whether this Government has politicians who have any experienced skills in negotiation. The PM certainly has not? Does Rachel Reeves? Have they sufficient commercial nous? They plan to renegotiate with the EU, which is known to salami slice its opponents over and over. Have the UK representatives got the guile and experience to protect the UK’s best interest or perhaps that process will reveal the reality of the dearth of competence?
Largely infrastructure projects proposed or approved by the Conservative government are being halted or suspended, such as certain road expansions and 40 new hospitals: infrastructure build will be a part of any growth story, and new projects have yet to be announced. Previously approved funding for a supercomputer in Edinburgh – at the heart of future advancement – has been suspended, but how does that sit with a commitment to becoming a technology market leader? Words and actions mismatch perhaps?
With hefty new legislation to bolster workers’ rights, dismantling limits and voting structures brought in by Tory Governments, businesses are likely to be negatively affected. Add to that Keir Starmer’s recent assertions that working from home is most productive, denigrating “presenteeism”, all made without any evidence of the benefits outweighing the damage and risks of excessive home working; and then new regulation to prohibit employers contacting employees out of hours; and then a law requiring employers to offer a 4-day week, that is working 5 days’ hours in 4 days; and the trend of policy seems to be to encourage less rather than more of a work ethic. Is it just coincidence that the approach chimes in tandem with a Civil Service and general public sector which prefers to stay at home to going to work?
If Government is to start to meddle in matters of employer day to day management of businesses in this way, where can it end? The mantra that “the State knows best” is starting to emerge and to interfere more and more with day-to-day behaviour. Businesses need freedom to manage. Does Angela Rayner, the Minister promoting this micromanagement, know what running a business involves?
The promise, so often repeated, is of a new moral approach and an end to cronyism and backscratching, and a whiter than white Government. This is now questioned just 7 weeks’ in as Rachel Reeves, Sue Gray and others appoint friends and political sponsors to government positions, with a major sponsor of among other things the PM’s wardrobe being given the freedom of Downing Street.
DIVIDING OR GROWING THE ECONOMIC CAKE
It is expected that the next budget will see tax rises, and those “with the broadest shoulders must bear the biggest burden”. And so almost certainly there will be hikes in capital gains tax and inheritance tax. Certain Unions are demanding a wealth tax. Although there is a pre-election promise not to raise National Insurance, certain Ministers have tweaked that to be a promise not to raise employees’ contributions, as opposed to employers’: possibly rolling back on a promise? Keir Starmer reiterates, as do other Ministers, that “working people” will not pay more. There is talk an attack on private pensions; if that occurs, will generous public sector pensions also be in the firing line? The tax rises will be used mainly to pay for pay rises in the public sector: that is not growing the cake, it is merely redividing it, moving money from the wealthiest pockets to other pockets. And as yet no new proposals to solve issues within the NHS, social care, Welfare, or defence have been discussed openly, and so the potential cheques yet to be written hang over the economy, unless the Government has some seriously radical ideas for example for a restructuring of healthcare in the UK.
The Prime Minister has asserted that defence of the realm is the first duty of government, but there is no commitment to seriously revamp the UK military which is too weak. This first duty seems to be taking a back seat to public sector pay.
It is early days for this Government, but there is little sign of any major measures to stimulate growth or ideas for wealth creation, their first priority. The establishment of GB Energy and the National Investment fund are cited as examples of growth initiatives, but they are embryonic and unlikely to change any game, with the profits, if any, way down the road. And nothing announced so far goes any way to alleviating poverty for the most vulnerable. If anything, the blame game is the focus and that creates no wealth. It is simply yet more divisive politics.
DOES A LITANY OF MISERY LAY THE FOUNDATION FOR GROWTH?
While the PM laid out how vital it is to set out his honest picture for the British people, the concentration on rot and ruin and misery is hardly the stuff to inspire and motivate. Suggesting that the likes of Rishi Sunak and Jeremy Hunt destroyed the UK are unfounded. He got that balance wrong perhaps. Does the country not need a leadership which promises incentives for investment, incentives for harder and more productive work, incentives for innovators and risk takers and technology wizards, incentives for businesses to pull the UK forward quicker? Those are consistent with wealth creation being the first priority. This Government proudly vaunts its pro-business credentials which are yet to be proven by action. It is the private sector which generates the resources to fund the public services. Where are the ideas at least to incentivise that private sector? Economic success only comes if people are ambitious, motivated and energised.
See also: – Cleaning up the UK’s Mess – Election about Vision, Graft and Grit – Addressing Elephants – Big Picture Brushed under the Carpet
