Following on from our list of leadership candidate responses, here are those of a selection of think tanks…
John O’Connell, Chief Executive of the TaxPayers’ Alliance:
“Taxpayers will be left disheartened and betrayed by Starmer’s speech, which does nothing to help households who are already struggling under a 70 year high tax burden.
“The prime minister talks about ‘fixing the foundations’ and yet is whistling the same old tune of managed decline that has plagued Britain for decades.
“If this new Labour government is genuinely committed to wealth creation as it claims, it should avoid hiking the very taxes that so ruthlessly crush economic growth, particularly capital gains tax.”
Karl Williams, Director of Research at the Centre for Policy Studies:
“Keir Starmer’s speech exemplifies yet again Labour’s cargo cult economics – the rhetoric of growth, but without any understanding of how prosperity actually arises. Simply sticking a ‘National Wealth Fund’ label on a pot of borrowed money will no more lead to investment and economic growth than labelling another pot of money ‘GB Energy’ will lead to lower energy bills for households. And if, as strongly intimated, Labour uses the next budget to raise taxes on wealth creators, it will show that Labour’s apparent conversion to being a pro-growth party is only skin deep.
Starmer’s speech also contained a glaring omission: immigration. If Starmer is serious about “fixing the foundations”, reviving meaningful growth and restoring trust in politics, Labour cannot afford to ignore this issue. Two thirds of the public think immigration has been too high over the last 10 years, but even with the belated changes to the immigration rules brought in by the last government, legal immigration is set to remain at historic highs. Meanwhile, Labour have no answer to the problem of the Channel crossings other than to rush people through the asylum system and push the costs onto the benefits system and local authorities around the country.”
Maxwell Marlow, Director of Research at the Adam Smith Institute:
“The Prime Minister said that his number one priority is wealth creation. But you cannot become wealthy by taxing wealth-creators.
Last year, the UK saw the second greatest number of millionaires leave the country, second only to China. The abolition of the non-dom status will only exacerbate this trend- many more will leave Britain for Greece, Italy and even France, taking their capital, investments and businesses with them.
We should also caution against any taxes on capital or inheritance in the next Budget. Raising either of these taxes could have a whole range of negative knock-on impacts on the rest of the economy.”
Tom Clougherty, Executive Director at the Institute for Economic Affairs
“The government is softening voters up for a tax-raising budget in October.
“There is obviously a tension between raising revenue and prioritising wealth creation, and that will be especially pronounced when increases to the main, broad-based taxes – income tax, national insurance, and VAT – have been ruled out.
“The remaining possibilities – higher taxes on business, on savings, and on investment – are likely to have an outsized impact on growth, and as a consequence may not generate as much revenue as the government expects.
“It is also important to remember that the incidence of a tax doesn’t always fall on the person who pays it. Workers usually lose out when corporation tax is increased, for example. Significant tax increases that don’t affect ‘working people’ are a fantasy.”