Get ready, Keir Starmer. Five years to stop us growing poorer than Poland
Dear Keir, I know it’s presumptuous for people to write open letters (columnists included), so I hope you’ll forgive this missive. Labour is heading for a landslide, but — as someone who has often voted Labour and once stood as a candidate — I’m worried that many in your top team are saying that this is a time for moderation; that the British public is sick of the radicalism of Trussonomics and a botched Brexit; that a first Labour term should adopt steady-as-she-goes incrementalism.
This would be disastrous. Britain is in a deep hole, with productivity stagnant and debt rising; a nation drifting on the currents of history. Donald Tusk was right: the average Pole will be richer than the average Brit within a few years. A steady-as-she-goes Labour will run out of goodwill within a year and money by the end of a first term. That is why we need boldness on a scale eclipsing Attlee’s or Thatcher’s. The public knows this. It knows the UK needs radical surgery. It just wants it performed by a wise, public-spirited surgeon rather than erratic cowboys — which is what we had under Truss, Johnson et al.
So, here are some bold policy proposals that could transform the UK, making us fairer, richer, fleeter of foot; policies that have thus far been resisted by vested interests and powerful lobbies.
First, tax. Imagine a world without income tax. Or corporation tax. This is doable if we shift our tax system to one based on land values. A recent paper proposed that a tax levied on the rental value of land instead of earned assets would increase growth by 15 per cent by turbocharging the incentive to work and start a businesses. Almost all economists have been in favour of such a tax, from Adam Smith and Milton Friedman to Joseph Stiglitz and Martin Wolf. They know that a tax on unproductive land is efficient, since land can’t be squirrelled away in tax havens. The alternative, a wealth tax, would penalise productive capital and lead to offshoring on a grand scale.
The other advantage of a land tax is that it would finally end the Ponzi scheme at the heart of the British economy whereby low productivity is mitigated by mass immigration and funny money (quantitative easing), thereby inflating the value of land, leading to more aggressive rent-seeking and conferring ever larger gains on the 25,000 people who own half of the land in England and have done nothing to merit this bonanza (between 1995 and 2017 Britain’s net worth more than tripled, largely because of land values). This starves the Treasury of funds, adding momentum for more immigration, driving up land values more. This system is strangling us.
Such a tax can be introduced in stages to protect the “asset-rich, cash-poor elderly” and important farmland and would leave the vast majority better off in the short term and almost everyone in the long. It’s a game-changer. Why hasn’t it happened? Partly because of the vested interests of large landowners like the Grosvenor family, who were given copious acreage by William the Conqueror, and whose ground rents are still distorting the London property market almost a thousand years later. Wake up, Labour. This has got to stop.
Second, the bureaucratic state. The NHS is failing — and good on Wes Streeting for saying so. We should move towards a social insurance model with private sector input and a wider shift from cure to prevention. We also need to become much better at big projects, a point made by Dominic Cummings, whose writings on this topic are painfully apposite. This is one area in which we need disruption to the status quo of officials bungling projects and then moving department, with no institutional memory, accountability or learning. It is shocking — in fact disgusting — that this has been allowed to persist for decades. Look at the scandal of HS2.
Third, human rights. As a human rights lawyer you are perfectly placed to say what everyone knows: human rights are one of the great achievements of the West, but tribunals like the ECHR are out of control, reaching ever more eccentrically into areas of democratic prerogative, while treaties like the refugee convention are decades out of date. Despotic states like Russia are fomenting instability in Africa to increase the flow of refugees, knowing that it will put pressure on Europe and louden the drumbeat of populists and fascists. Don’t take my word for it: this is the assessment of Frontex, the official EU borders agency.
My proposal, then: convene a new human rights conference that, unlike the discredited UN body, which is often chaired by human rights abusers, includes only nations that care about these values. This would be on the scale of the postwar watershed, creating a new legal framework, courts and obligations — and would crush the business model of people smugglers by giving nations the absolute right to deport anybody who arrives illegally, thereby opening up space to bring the most vulnerable (who can’t afford the criminal gangs) through safe routes. It would be a game-changer — resisted only by the increasingly deluded human rights lobby, who have become the useful idiots of the world’s despots.
Fourth, corruption. It is a bitter irony that the land of Magna Carta has become a labyrinth of sleaze and VIP lanes. Create a full cabinet position for the superb tax lawyer Dan Neidle to crack down on the abuse of tax loopholes by the super-rich, which doesn’t just create a fiscal black hole but fatally undermines consent for the tax system itself. Also give him a deputy to end the scandal of ministers and regulators going to work for companies over which they recently had oversight — and other forms of legalised corruption, like the travesty of the honours system. Work on abolishing the House of Lords, too.
Fifth, planning. Nimbyism is holding us back from investing in the wires, roads, homes and pipes that knit together a nation and nurture creativity and growth. British investment in fixed capital has been flat bottom of the international league table for decades, stymied by judicial reviews, decades-long consultations and more. The rule of law has become the rule of “nope!”. A reform of planning laws will not destroy our green and pleasant land but save it from the catastrophe of nationally beneficial projects being constantly checkmated by local objections, screwing everyone since nothing gets built. We are being left in the dust by China, India and everyone else; without change, we will soon become the offshoot of another empire.
Other reforms: start a national conversation about rejoining the EU single market, which would give us frictionless access to the vast economy on our doorstep and wouldn’t, in itself, negate the referendum result. Pledge to spend 3 per cent of GDP on defence, immediately. Talk up the achievements of Britain, because we have a proud history and it’s a catastrophe that so many children are being taught to wallow in misplaced guilt. Tackle benefit fraud and rethink energy strategy — we need more nuclear power stations, which have been resisted for decades by scare stories and deluded green activism.
Keir, you’ll have heard many Tories saying this is a good election to lose, given the bleakness of the future. I’d suggest there has never been a more important time to be in power. Britain is snookered by its own neurosis, held back by cowardice and corruption, politicians preferring gimmicks and culture war bullshit to the rational change we need.
Labour will fail if it is incrementalist. Only courage can save us now.