20 NOVEMBER 2024 | OPINION
Sir Keir – perhaps we should call him other things beginning with K e.g ‘Knockabout,’ the scornful term he used for PMQs last week – was not at the Dispatch Box today. He was returning from the G20 Summit in Rio, far more congenial than the rowdy Commons. Clad in black, ‘Agent K’ schmoozed the PRC’s premier Xi Jinping and, at a press conference, avoided criticising the jailing of Hong Kong’s pro-democracy protestors; perhaps they were ‘far-right thugs.’ Best not to rock the sampan, especially when the incoming US administration may stick an oar into the Chagos Islands handover to China’s friend Mauritius.
Taking his place was Deputy PM Angela Rayner, the toughie redhead, and deputising for Kemi Badenoch as per convention was Alex Burghart, the Conservatives’ Shadow NI Minister.
Once again, the cockpit of the Chamber is less satisfactory when both sides agree. Angie’s opening remarks included a reference to “Putin’s barbaric war in Ukraine. We will stand with Ukraine for as long as it takes.” Even now, few mainstream journalists – other than Peter Hitchens – are prepared to give the history and context to that conflict. It is one that has become especially ominous now that President Biden has (perhaps consciously) authorised Zelensky’s use of long-range missiles against Russia, and the latter has changed its nuclear doctrine to include Ukraine’s backers. Burghart seconded Rayner, as did Daisy Cooper (Lib Dem).
Graham Stuart (Con) aimed a shot at Chancellor Rachel Reeves’ claim to have worked as an economist, but misfired. Perfunctory research reveals that, like former Tory Chancellor Nigel Lawson, Reeves got her Oxford degree in PPE and, furthermore, her MSc at the LSE was in economics. What matters is not the Chancellor’s over-egged CV (since amended) but her policies, and Angie countered with “in the last four months, our Chancellor has shown more competence than the last four Chancellors that were appointed by his Government”. Now, that claim really does need unpacking.
Like her boss, Rayner is fond of repetition: she said thrice that the previous Government had “spent the reserves three times over”. But when she contrasted the (currently modest) inflation now building in the economy with the 11 percent under the Conservatives, Burghart quickly reminded her of Ukraine and Covid, (measures on both of which matters Labour had been strongly supportive).
Reeves’ inheritance tax raid on farmers was a live issue. The Lib Dems’ Daisy Cooper cited a constituent’s family who, if forced to sell land to meet the charge, would find their food production economically unviable. Replying to a Midlands MP on the same problem, Rayner repeated Starmer’s claim that “the vast majority of farms will not pay any inheritance tax”; yet Burghart had earlier quoted the NFU’s estimate that “75% of all commercial farms will fall above the threshold”. Yesterday, Badenoch got a great cheer when she told the farmers’ rally in London that Conservatives would cancel that tax at the first opportunity.
What was John McTernan thinking when he said Britain didn’t need small farmers and would treat them as Thatcher had treated the miners if they protested? Even Sir K had to dissociate himself from that. And what was on ‘posh wellies’ Steve Reed‘s mind when he told the Parliamentary environment committee that farmers should consult their tax advisers if the IHT caused them any difficulty? What if all the farmers sold up and emigrated to somewhere warmer and more sane?
And then there is the ongoing row about the rise in employers’ National Insurance contributions. Speakers for the Lib Dems and Plaid Cymru both raised the implications for care workers, who (as it was said last week) might not get compensation for the increased cost – as indeed could be the case for other Local Authority contracted-out services.
The bigger picture with the NIC debacle is that the Government has to some extent tried to give back with one hand what it has taken with the other, by using additional funding in the case of LAs and the NHS; and by increasing the Employer’s Allowance (a discount of up to £10,500) for small businesses.
But parish and town councils will not qualify for compensation at all and expect the additional cost to them will be £10 million. The voluntary and charity sector, also struggling, estimates that without similar compensation or exemption, the NIC hike will cost it £1.4 billion and impact services. GPs estimate it will cost them £260 million (the poor underpaid and overworked things – seen one recently? Tell Big Chief I-Spy!)
On the whole, the public sector and micro-businesses will be cushioned.
Not so for medium and large private enterprises – compare Scenarios 4 and 5 in this explainer. They face a significant extra burden, in an economic climate that is already difficult.
But they also have the resources and now an additional motivation to accelerate the trend towards replacing people with machines. AI, robots and automated checkouts don’t get sick or sue their employers. Taxing employment may have more success in reducing it than with harmful indulgences like alcohol and tobacco. A Labour government claiming to represent the interests of “working people” may see fewer of those and more of them claiming benefits instead.
Rather than changing the borrowing rules and going for broke, the Government should consider retrenching – on vanity projects like HS2, on foreign aid and foreign war, on expensive new-Eden energy ideas that make our industry increasingly uncompetitive, on ‘restoring our role as a climate leader on the world stage’, etc. We have to cut our coat according to the cloth.
Unless the West succeeds in provoking Russia into nuclear retaliation, in which case pensioners need not fear freezing to death. Shame about the polar bears, though.
