Labour cash grab would threaten every pensioner
WE’RE not halfway through this election cycle and already voters have been offered an overload of giveaways: free tuition fees, free transport, even more free healthcare and childcare, and now free broadband too.
No doubt the sun, the moon and the stars will eventually be handed out on a silver platter, but the big spenders in the parties are probably waiting until week four or five to unveil such a showstopper.
Everyone likes free stuff. But the vast majority of people on the receiving end of political promises are savvy enough to know that nothing is really free. Someone somewhere will be paying for services used, whether it’s a taxpayer in a different city or borrowed money that will be paid back by our grandchildren.
Or very possibly, it’s coming out of your own purse. The Conservatives are under pressure, as the party that prides itself on fiscal responsibility, to give the public a glimpse into how they’ll fund increases to education, healthcare and the police through a costed election manifesto.
And from billions to trillions, we’re asked to believe that the Labour Party’s multitude of spending plans for the NHS, infrastructure projects, a “green revolution”, welfare hikes and nationalisation projects are all going to be funded by taxing a few rich individuals and reversing corporation tax cuts. Those latter cuts, incidentally, have not just made Britain a more desirable place to do business, but have had the bonus of actually increasing corporate tax revenue.
When the wealth of “the few” fails to go nearly as far as projected, you can bet “the many” will be picking up the tab.
Odd then, that while the Labour leader paints business as the bogeyman of the British economy – self-interested and opaque – he also considers it to be the lifeblood of his grandstanding plans for public services.
Take Jeremy Corbyn’s proposal for “free” broadband. On the one hand, he is angling to seize parts of BT from the private sector he vilifies and return them to the supposed righteous hands of the state.
On the other hand, he plans to fund universal broadband (partially – this policy is by no means fully costed) by taxing tech firms, using funds generated by big business to prop up services provided by the public sector.
This is a recurring disconnect on the part of the socialists, to understand that wealth creation generated by business is what makes delivering highquality public services possible.
Failure to understand why prosperous, free market countries can offer more to their citizens perhaps explains why Left-wing parties continue to call for burdensome taxes, anticompetitive regulations and a crackdown on free enterprise.
It’s not understood that measures designed to stagnate the economy and destroy wealth will lead to less money overall to be redistributed, shared and used for a social safety net.
But it’s not simply public service beneficiaries who lose out when free enterprise comes under attack. There are rising concerns about plans for nationalisation and what tax hikes could mean for key stakeholders, including pensioners and employees of targeted business.
Labour’s plans to nationalise 10 per cent of large businesses through “inclusive ownership funds”, for example, have been estimated to hit pension funds hard. The law firm Clifford Chance has calculated that British pension funds could lose £31billion thanks to this scheme, a cost ultimately borne by pensioners themselves.
The UK is facing enough uphill pension struggles as it is. The current state pension system is fragile, at risk of underdelivering for future generations and over-stretching the public purse.while reform may be needed for my generation to reap the rewards of saving, it certainly won’t be made easier by undermining the current savings and investments made on behalf of people who have spent their entire lives paying into a system they were told would deliver for them.
Written up by the Financial Times as one of the “biggest state expropriations of assets seen in a western democracy”, Labour hasn’t taken into account the knock-on effect that state ownership would have on pension pots and lifelong savings.
Furthermore, there is plenty of evidence to suggest that a big chunk of corporation tax actually comes from workers’ wages. Punitive taxes on business – be they tech giants or the local corner shop – ultimately transfer to workers and customers.
THIS IS one of the many dangers that arises when you treat business as a faceless institution rather than what it actually is: a compilation of all sorts of people – workers, consumers, investors – who come together and rely on each other to create, innovate, and grow the economy to the benefit of everyone.
It’s become extremely fashionable to attack business; but these attacks are really attacks on people and their daily activity. And while Labour, the SNP, and the Greens are taking a more hostile stance towards enterprise, the Conservatives and Liberal Democrats often seem more embarrassed to defend market success than they do to champion it.
Forcing private business into public hands would result in lots of resources, wealth and value being lost along the way. So it’s up to the non-politicians – to us – to push back s tate grabs and make the case for enterprise, for the sake of the workers, the pensioners, the consumers and the public alike.
‘Business’s wealth creation makes quality public services possible’