Keir Starmer: Labour has changed. No rise of Income Tax or National Insurance?

 

There was a candidate in times past standing for election in Latin America. He said that he was going to build roads that could allow motorists to save money. The brilliant idea, he said, was to build one side of the roads going upwards and the other side of the roads going downwards.

Massive investment in salaries in the public sector and in Welfare without spending a penny? Somebody will have to pay for it.

'Read my lips', was the catch phrase of President George Bush Sr.

Monies for salaries and welfare will have come from somewhere - either from borrowing or from higher taxes or from both borrowing and higher taxes. There is no way out. Father Christmas promises will not do. Public budgets will have to be financed with sound economics or we will end up having Britain as the new Slough or the new Birmingham. What was the emergency measure approved for Bimingham? A rise of Council Tax to try to shore up a bankrupt authority that, in spite of tax rises, was forced to stop offering vital services.

We are at a crosswords. Grant Shapps made promises about defense that cannot be delivered - not even by cutting down other vital sectors of the administration. The fact remains that Britain is unfit for war because Britain does no longer have the industries that supported strong military capabilities. But things are a lot worse than that. In a country with more than 60 million people, the numbers of those serving in the Armed Forces are below 70,000 and those capable and fit enough for combat are far below than that. So the Conservative proposal in terms of bringing in National Service are not just a realistic solution, but the only solution available. Keir Starmer should be asked about how you can fight a war without Armed Forces.

 

Rachel Reeves: Do you increase salaries across the public sector without raising taxes?

 

Just hours ago the Labour Party launched an attack against Conservative policies regarding National Service and possibly concription because of the cost of such policies. But after that, Labour Shadow Chancellor of the Exchequer Rachel Reeves stated that a Labour government would increase salaries across the public sector. Well, how much will it cost to increase salaries across the public sector. I reckon that it would be a lot more than National Service or Conscription.

Right before an election the mountain of contradictions rises on a daily basis. Just before Rachel Reeves spoke about salary increases in the public sector, Keir Starmer said that he would not get rid of the two children cap when it comes to Children Benefits in spite of the fact that he would want to do so. I guess the Labor Leader was thinking about cost of getting rid of the two children cap.

Services are necessary, but services cost monies that need to be paid with higher taxes at a time when interest paid on public borrowing is extraordinarily high. Labour says that it will not implement austerity, but you cannot promise to pay high interest on public borrowing and raise salaries without increasing taxes. And if you start increasing taxes, you can guarantee that companies that pay higher taxes are going to turn those higher tax payments into higher prices to balance the books. There is also the danger that higher taxes will lower consumption thus affecting the monies that the state can collect as taxes. Higher rates and lower amount of monies coming to the Treasury. And what about companies that are struggling to make ends meet? Less customers coming through the doors and higher taxes pushing up prices are not a recipe for success.

This is the way it works. If you collect 100 Pound as taxes and suddenly prices go up, then you will collect 100 Pound as taxes but only nominally. You are going to be able to buy less with your 100 Pound. State employees will be getting salaries that are worth less money in spite of nominal increases.

If you are paying 2500 for rent and suddenly the cost of renting goes up to 3500 then your salary has actually been devalued. Nominal increases will make things a lot worse.