The starting gun has been fired! We’re about to get a new prime minister. Again. But this competition is bizarre.
Labour’s leadership woes and election psychodrama beats anything before this. Of course, it was always going to be tricky for Labour. Whilst they won a huge majority at the last election, Kier Starmer actually managed to reduce the Labour vote by 550,000. Boris won with 44% of the vote in 2019; Kier with just 32% in 2024.
So, the first round of this leadership excitement starts in a by-election in Makerfield. Bookies’ favourite Andy Burnham needs to be an MP before entering the fray, so must win the by-election. Makerfield has been a Labour seat forever, but it went entirely Reform at the local elections recently. But for the first time, incentives are reversed. If you hate Labour’s leader, Kier Starmer (who doesn’t?), then you vote Labour. But if you like Labour under Starmer, you vote Reform.
Burnham is burnishing his credentials. He wants to reindustrialise the North, and renationalise utilities and other industries. He wants to build millions of council houses. And he wants to tax and borrow more. Meanwhile, alternative Labour leader Wes Streeting wants us back in the EU, something Burnham seems happy with.
Council houses is probably OK. Re industrialisation only works for us if that output increases our output per man-hour worked – productivity. Economists will tell you that we need to deploy our assets in a way that increases wealth, not decreases it. Nationalisation? Anyone remember the 70s? The EU? Fancy going through all that again?
But tax and borrow?
Last year, we raised £331 billion from income tax. But we spent £333 billion on welfare. For the first time ever, we gave more money to people not working than we took from people who do work. Around 35 million people pay income tax, but the top 350,000 paid about £100 million. They are leaving, having been pushed beyond their limit, going to Switzerland, Dubai, Monaco, Milan. I know some. They don’t want to go, but having built successful businesses and created jobs, and whilst they accept they need to pay tax, they feel that they are not just having to pay the highest differential of tax in the western world, but they are being punished for being successful. So, whilst it is amusing to watch Labour’s psychodramas from the sidelines, a tragedy for our country is unfolding before our eyes.
