Keir Starmer won’t fix the economy

Monday, May 27, 2024 at 5:39 PM

Sir Keir Starmer

Keir Starmer is driving home the message that „Labour has changed” but remains a radical party that believes the state should play a substantial and active role in managing the economy, says Elliott Wilson.

Parliament will be formally dissolved this week after Rishi Sunak announced a general election on July 4. While most expected an election in October or November, the Prime Minister surprised Westminster with her timing, but we’ve been waiting a long time for this campaign.

A widely held assumption, supported by polling data, is that Labor will win a substantial majority and Sir Keir Starmer will become Prime Minister at the age of 61. Economist Rachel Reeves, who once worked for the Bank of England, is expected. to be the first female Chancellor of the Exchequer; Jonathan Reynolds, a friendly centrist who spent three years as shadow city minister, is set to take over the trade and commerce department.

But there is no such thing as a foregone conclusion in politics. What are the key economic and business issues Labour’s offers should be examined before you vote?

A fundamental part of its premise is economic stability. To deliver this, Labor has promised to work within current spending plans, rejecting borrowing for day-to-day spending and permanent government tax and spending changes guaranteed in law based on independent forecasts from the Enhanced Office. Budget responsibility. These restrictions are understandable in political terms, as it is a traditional, if not entirely justified, charge that Labor governments are losing control of public spending. However, they have restricted Starmer and Reeves’ room for manoeuvre, and we have already seen pledges such as the party’s £28bn investment in green industries.

Labor is keen to revitalize the UK’s capital markets. Financial Development: A Workforce Plan for Financial Services A new government is committed to encouraging greater investment in UK equity, particularly by pension funds. Reeves also wants to improve and consolidate regulation, and lead the UK in the use of artificial intelligence in fintech and financial services. This combination of creating new opportunities while maintaining strong regulation is known as „securonomics” and is presented as working in tandem with foreign policy.

It’s an ambitious approach, and its aims — high risk-free prosperity, high investment, energy security — can’t be faulted. But Reeves, like shadow foreign secretary David Lammy, has high hopes that Labor ministers are more effective and efficient. Notably, only three members of Starmer’s top team have no experience as cabinet ministers. Labor is urging voters to take more faith.

Finally, there is an industrial strategy, which has the faint title of Playwright Prosperity through partnership. It aims to deliver clean energy by 2030 by creating Great British Energy, a publicly owned investment vehicle and a national wealth fund to rebuild industrial capacity and strengthen national resilience. Starmers’ Labor Party is deeply confident that these policies will „mobilize” and „catalyze” private sector investment.[e] activity that would not have happened otherwise.” Partnerships and collaborations are shown to be essential, and there is an almost frightening eagerness to emphasize that strategy does not represent an antiquated state direction of the industry.

Ultimately, business leaders must decide both the policies themselves and whether they believe Labor can and will implement them. The party tries to propose that relatively modest public investment can stimulate very large sums by the private sector, and that there is happy, frictionless cooperation between ministers, business and trade unions.

Sir Keir Starmer drives home the message that „Labour has changed”, but it remains a radical party that believes the state should play a substantial and active role in managing the economy. However, looking at the last 10 or 15 years, many would not conclude that too much government medicine. Advocates of free markets, a smaller, more agile and efficient state, and the benefit of people keeping as much of their own money as possible should look elsewhere.

Elliott Wilson is the co-founder of PivotPoint

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