October 7, 2024 - 10:00am
The goalposts are starting to shift on Labour’s taxation policies once again. Liam Byrne, a key figure in the government and chair of the Commons Business and Trade Committee, is calling on the party to raise taxes on wealth. Byrne does not just see a raid on people’s wealth as a means to raise revenue, but also as a way to curtail the rise of populism in Britain — as strange as this might seem.
Byrne is drawing on a new study that shows a strong correlation between regional income inequality and support for Reform UK. But this study only confirms what many on the Labour Left already think: populism is caused by capitalism and inequality. This is a classic in the genre of Marxist analysis. Since “there is no war but class war” — as Marx famously wrote — any anger among the working classes must be caused by class envy. Take a bite out of the wealth of the rich, the Marxist will tell you, and the working classes will be happy once more.
Labour’s juvenile retreat into theories its politicians learned in undergraduate sociology class is pushing the party, already deeply out of touch with the average Briton, into a fantasy-world of its own making. The root cause of populism is obviously not primarily economic. If you listen to those who are voting for Reform, they are quite clear that their most immediate concern is immigration.
Indeed, this is not just confined to Reform UK voters. Polling reveals that the two top issues across the country are crime and immigration. The study that shows poorer people are more concerned about these issues is an obvious “spurious correlation”: the reason for the correlation is that crime and immigration affect people in poorer areas much worse than those in wealthier areas because these areas have higher crime rates and are used to settle immigrants when they arrive as the housing is cheap.
During the election, Labour talked tough on immigration. But this is a government led by former civil servants who listen closely to what institutions such as the Office for Budget Responsibility say, and these organisations are saying that very high rates of immigration are required for the next 50 years to keep the economy ticking over. When it comes to its policy on crime, Labour is rubbing the British publics’ nose in it by releasing large numbers of prisoners back into society — presumably to commit more crime.
Labour politicians are ignoring the fact that it is their policies which are driving populism. They truly believe public concern about migration or crime is irrational, driven by “racist” impulses that should be policed — whether through re-education in schools or through actual police action — and that the real underlying issues are class-oriented and to do with the rich having too much wealth.
Britain relies extremely heavily on the financial sector to prop up living standards and to generate tax revenue. Byrne is advocating raising capital gains tax to the same level as income tax, meaning an enormous jump from the current 20% rate to a 40% rate. This will cause financiers to leave Britain and set up in Dublin, mainland Europe, or possibly even the United States. It would be nice if Britain could wean itself off its reliance on finance by rebuilding British industry, but Labour has no idea how to approach that question and so just defaults to the punitive option — a constant theme in a government run by the former head of the Crown Prosecution Service.
Starmer and his government are leading Britain into a very dark place, both politically and economically. Starmer himself is almost unbelievably unpopular: after only a few weeks in office he is less popular than Rishi Sunak was at the end of his term. But one need not look at the polling. The mood in Britain is extremely low right now, with a general sense of despair and decline apparent across the country. Yet this does not seem to bother the technocrats in the Labour Party; in some ways they appear to even be enjoying it. They tell themselves that these are the “tough decisions” which are required and pat themselves on the back for having the guts to undertake them.
Philip Pilkington is a macroeconomist and investment professional, and the author of The Reformation in Economics
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SubscribeExtremely tedious
I could only listen to this reptile for under 10 minutes, so perhaps the host challenged his ludicrous speech later in the episode. Steve Jobs was not a monarch and was fired from Apple in the first half of his career. When he died, Tim Cook took over the company… not Jobs’ first born male. Apple didn’t invent the smartphone, it made a more popular one because Jobs was a critical consumer who only wanted to make products he would use. Bernie Madoff was a monarch, Harvey Weinstein was a monarch, Richard Fuld of Lehman Brothers was a monarch. Where are their companies today? China is not an example of monarchy. All of its development was fueled by foreign investment that sought to exploit cheap labor. Wall Street bottom line thinking was the key to China’s economy; and executives at Apple, Meta, Google etc. all bow at the feet of powerful venture capitalists and stockholders.
If Unherd thinks that this sort of thing is intellectually edgy, they have got another think coming. I don’t know what one would call Yarvin’s scattered, random referencing, but it is not thinking.
Lost me at minute one with “Democracy and politics mean the same thing”. Plainly they do not.
Flo !!
Bit of a rambler Curtis! Reminds me of trying to keep track of Jordan Peterson. Am 30 mins into this so far, need to walk the dog…Well done the interviewer – whose name I cannot remember or find anywhere ?! – for challenging him in some of his more patronising moments, although the last question she asked I actually have lost track of whether he answered it or not and I think he lost track too haha