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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.
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SubscribeLiam Byrne always was a bit of a dumbo.
“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.”
It is this which has led me to define the Left as “those who take the longest to understand anything.”
I believe the Left operate on the principle of levelling everybody down to the lowest common level of wealth as it will make the march to Utopia much smoother. Of course it won’t apply to the people leading the march.
Though having policies which act causally on the past is quite an achievement. Is Starmer a time lord?
But correlation is not necessarily causation. You could argue that ‘taxing the rich’ will be seen as spiteful and removing any possible personal hope for people striving to do well for themselves.
The popular aphorism for the Leave argument was ‘taking back control’. Many Reform supporters recall that fondly and wonder if Labour’s current behaviour is more like ‘impose further control’.
I guess if you truly want to tax the rich you need to tax capital and not labor in the first place. It’s not about people making 500k a year. It’s about the billions of parasitical capital which has a 100 ways the evade taxation.
That’s true. In fact, a common tax dodge is to reclassify income as capital gain, in order to reduce the tax burden on same.
It’s also why economists, after bashing the problem around in their heads for a decade or so, often come to the conclusion that the best system is a relatively flat ‘tax on everything’ system at a low low rate, and with a single exemption threshold for low earners.
This accepts the fact that no matter what you do, you won’t get much tax out of the very rich, but if you make their tax cheap and hard to avoid, you can make tax avoidance not worth their while (i.e. it’s like if you have a bike in Dublin, the best strategy is to have an old banger with two really good bike locks – they can still steal it, but they won’t be bothered).
Bit of a yah-boo piece not adding much to the discourse. Author uses a range of over-simplistic statements that’ll get a cheer but mislead in the process. Furthermore Byrne is not a Minister and the Labour Left is not in power, albeit pretty grumpy about that.
The mess Starmer inherited is worse than the Right were prepared to admit when in power, but is also not as bad as doom-monger like this Author might suggest either. Starmer not had a great start but it’s likely ‘chip paper’ stuff in the 5yr term he’s got if he gets his act together now. Confronting a range of challenges honestly been lacking from Govt for over a decade.
So, when might Starmer start to “honestly” attack one of these challenges? Judging by immigration, he shows little interest in doing that.
Confronting challenges (great word) is not FGKs strong suit…..hence reduction of the population to the LCD ….. looks like progress to him and the no eyed deer….
In modern times when the term “populism” is denigratwd, it seems that the person expressing it is a reactionary pushing the opposite populism.. “unpopulism” comes to mind.
Welsh Labour have been in power for 20 years, yet they can’t reduce waiting times for NHS operations or ambulance arrivals, trains and buses stuggle to arrive on time. Yet they plan on making Wales an “anti-racist nation” (whatever that means) by 2030. Shame they haven’t managed to stop people littering in all that time, maybe one day eh?
If the Office for Budget Responsibility really does think that more immigration will boost the UK economy, then maybe it needs to start reading The Economist? There is a simple graph from that magazine which shows why mass immigration has gone so badly wrong in the West:
https://x.com/JoshuaSteinman/status/1842813926100316175
Data and graph for Denmark but no reason to assume it doesn’t apply elsewhere.
In short, for immigration to work it’s the quality that matters, not the quantity.
Anyway, isn’t it the Treasury, not the OBR?
It’s both of them.
Economic conditions and class certainly play a major role in the rise of populism, even if polling doesn’t show it directly. If the economy was truly growing across all classes, there would be much less resentment and unrest. However, simply taxing the rich will not improve the economy. It will just make the rich less rich, and reduce economic growth even further, making the working class less rich in the long run as well.
At what point is it worth asking if the conclusion that you draw is not the point of the people behind these ideas? The foreseeable consequence of ‘tax the rich’ is self-evident. Such consequences are never accidents.
Thats going to depend on how the money is spent. Though obviously it’s not a quick fix.
No, taxing the rich makes the rich leave, which makes everyone poorer.
How many times does this have to be demonstrated before the point hits home?
It’s always good to know that if we want to help the poor, the only real way of doing it is by supporting the rich. Funny that.
You see the tax issue as a binary which is the problem. There is also the approach where you have an actual productive economy – a rising tide causes all boats to rise. Britain had no post-Industrial plan. Poorly managed for 40 years. No reason to think tax incomes from increasing taxes on rich people would not be wasted too.
The rich don’t need supporting. It’s the poor that need it, and they’ll not get it by having competition for their jobs imported from abroad, and wealth transferred from people who create wealth to the government, which doesn’t.
I was being sarcastic!
That’s a perfectly rational analysis, but our country has been captured by the progressive bourgeoisie, who are not rational.
I’m starting to think that raising taxes on wealth is this election’s cycle of ‘build back better’ which made the global rounds four years ago. Harris is proposing the same thing, demonstrating that her ignorance of economics is on par with her grasp of immigration.
Take a bite out of the wealth of the rich, the Marxist will tell you, and the working classes will be happy once more. —– As always, the creed of envy at work. Do the working classes know or care where that wealth goes, because you’d think at least one would notice that he’s not getting it.
I have never voted Left nor sympathised with any Leftish cause. But I do see a problem with using the Left as a punchbag, taking a few swings and then feeling a whole lot better. However it feels at the time, the punches don’t hurt anybody.
I have worked all of my life in manufacturing and when I hear that the way out of the problem is investment in industry, I cringe. Which industry? Where? How? Can we really compete with China and India? About 30 miles from me are the twin towers of Wales -actually three towers but twin towers sounds better. They closed down last week. About 40 miles from me is Tata Steel, Trostre, which makes steel sheet for car bodies. Now, everyone will say that Trostre does not depend on Port Talbot for its steel but…the support of big brother has gone, leaving the small sibling exposed to the treacherous winds from Europe and beyond. I would bet that Trostre will not last long.
Industry requires special characteristics. People have to put up with awkward conditions during a start-up, they have to come to work through thick and thin. There are many national bodies concerning quality and H&S to satisfy – when industry first started these bodies did not exist and, slowly, ‘well-meaning’***government departments took over and, one by one, the industries closed. Also, there is a problem with transport because we only have one real container port and Felixstowe is on the extreme east of Britain – not good for Wales and the west or the north. The extra cost of shipping raw materials in and finished goods out can make a big difference. ( *** ‘well-meaning’ = Left.)
What is needed for Britain is, 1) a proper energy policy, not a ‘well meaning’ one, 2) work to improve the ports of Liverpool and Manchester to cut out travel times and costs and create wealth, 3) a change of school policies to try to fire up children to take a few risks in their lives instead of watching movies on the internet, 4) a ‘well-meaning’ government which does not meet my definition of ‘well-meaning’, 5) an incentive for banks and financiers to look inwards rather than outwards and 6) a leader with charisma who can actually lead – even a ‘well-meaning’ one might do.
All good suggestions.
But why Liverpool or Manchester ? What’s wrong with Cardiff docks (once amongst the largest in the world) ? And plenty of us out this way (Cambs) would be very happy to see some of Felixstowe’s traffic shared around the country more and off the A14.
For all the money that’s been spent on the infrastructure of regional government in Wales, I can’t help feeling that some decent physical infrastructure might have been a better buy.
Yep, Cardiff is fine for Wales but I was just thinking of something west and central in Britain.
John Gray in The New Statesman:
https://www.newstatesman.com/comment/2024/09/machine-politics-keir-starmer-age
To be fair, over the last few decades the Conservatives have done their bit to spread populism. In fact, all the main political parties, along with other members of the liberal elite, have the same problem with believing that ordinary people are stupid and bigoted. It is this scorn for and dismissal of the general population that is largely to blame for the rise of populism.
This sentence is then followed by a truly bizarre interpretation of Marx. Buying off the workers with a bite of the rich man’s cherry is NOT what Marx advocated.
Because there was no populism before Labour came to power – and no populism abroad. I’m not sure if this is sloppy writing, or just sloppy thinking. And to be honest we don’t really know what Labour policy is on very much.
I guess everybody is deeply worried that someone might start taxing the rich.
People owning a million pound house in London might start to wonder about a wealth tax.