It’s certainly transformative what the
Labour Party is suggesting here, and I think it’s important to be clear that this is not just about tax and spending; this is about the state getting deeply involved in much more of the private sector than it has been, certainly since the 1970s, and perhaps since the 1940s, with respect to, say, telling banks which branches they can’t close; setting minimum wages for a quarter of private sector workers and about 60% of young people, and dramatically improving labour regulation. All of those things are utterly different from anything we’ve experienced in many, many decades.
If you take what’s here at face value, then much of it I think is unprecedented even in the 1970s. This is a level of state intervention that probably goes back more decades than that.
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We clearly know from today’s leaked Labour manifesto that they’re looking at spending a very, very large amount more than the
Conservatives will. We’re looking about an additional £25bn a year on infrastructure spending; an additional £10bn a year or so to cover the impact of getting rid of university tuition fees; we’ve already heard that they’re looking at spending another £7bn or £8bn on other aspects of education. And then, I’m afraid I haven’t got through the rest of the manifesto, but there’s obviously an awful lot other promises in there. How much that adds up to, I don’t know.
On the tax side Labour have suggested a very big increase in corporation tax – increasing it by about 40%, about one percentage point of national income, which we were quite amused to see they’d described in their manifesto as asking companies to pay a little more. And they’ve said that they will increase tax on those earning over £80,000 a year but we have no details of that yet.
That is, in terms of taxes and spending, a dramatically different picture.