In a typically measured and well-informed article in yesterday’s Times, Paul Johnson – former Director of the Institute for Fiscal Studies and one of our most respected economists – returned to the question of the nation’s economic ills.
His article ends as follows – reminding us that the upstart Burnham is even more clueless than Starmer about the economy, and that the a Burnham government could be very damaging for Britain:
The pretenders to the throne appear as unprepared for office as the current prime minister was two years ago.
I’m delighted that both Andy Burnham and Wes Streeting are talking about reforming our capital taxes. Capital gains tax is in need of reform. But look at its scale. It raises about £20 billion of £1,100 billion of total revenue. Wise reforms would struggle to increase that by more than a small number of billions. Burnham’s call for a land tax I also agree with. But our problem here is not that we tax land and property too little. By international standards we tax it rather a lot. The problem is our current system is catastrophically damaging. Yes, please reform it. No, don’t pretend that is a way to repair the public finances. And please don’t claim that a wealth tax is the answer to all our ills.
As for Burnham’s general schtick that the current government hasn’t been left wing or interventionist enough. One does wonder whether he has been paying attention. This is, after all, a government that has increased taxes by something like £60 billion and public spending by a lot more than that, has substantially raised the minimum wage, is bringing rail and steel into public ownership, has scrapped the two-child limit and abandoned any effort at welfare reform, is stopping exploration in the North Sea and going hell-for-leather for net zero, and is implementing transformational additional regulation of employment and of rental housing. This is no Blairite tribute act.
The overall impression is that both those occupying the highest office and those vying for it have lost the capacity to focus on underlying problems while continually chasing the next day’s headlines. Any organisation which spends all its time firefighting, while neglecting to focus on its underlying problems and on its strategy will inevitably fail. So it is with governments.
