Keir Starmer has been vague about where the money for his plans will come from. The answer is our wallets and bank accounts. Dominic Frisby reveals what the taxman will target next
The latest polls show Labour on course for such a thumping majority (with less than 50% of the vote – how rubbish is first-past-the-post?) that it will be able to do what it likes. There is scope for a lot of invasive government. Despite Starmer’s purges, and his clear intention to present Labour as centre-left, there is still a socialist mindset within the party that does not respect personal property. It feels entitled to it. So today I want to explore what Labour might do, especially if the socialist-leaning instincts in the party come to the fore, and consider ways you can protect yourself.
The party intends to produce “500,000 new, skilled jobs in the industries of the future” as part of its energy plan and put “13,000 more police on the streets”. It hopes to pay “doctors and nurses overtime to work evenings and weekends” and give the NHS “the staff and technology it needs”. Labour’s plans have one thing in common: they require spending. Yet taxes as a percentage of GDP are already at an 80-year high and debt as a percentage of GDP is close to 100%.
Where’s the money going to come from? About that Labour has been vague, which makes sense: the less specific Starmer is now, the more scope he will have to do what he wants when he comes to power. Labour has pledged to move the “current budget into balance” and “ensure debt is falling”. We appreciate the thought, but there is not a hope in hell. Deficit spending will continue, as it has for decades, and the national debt will rise. So there is one thing that is guaranteed: the pound gets further debased. It will buy you a lot less in five years’ time than it does now. Whether we see the 33% declines in the pound’s purchasing power we have seen since 2020, I’m not sure, but declines are nailed on.
Yes, sterling is holding up moderately well in the foreign-exchange markets, which know Labour will win, but that is just comparing it with other fiat currencies. Own plenty of gold and bitcoin and use such “non-government currencies” as your savings vehicles. They will outperform sterling quite comfortably by the time of the next government.
What Labour desperately needs, moreover, is growth, which is hard to achieve when government is expanding, which it will, and taxes are rising. Which taxes, though? Labour has promised that t
