Andy Burnham sheen will fade rapidly (Image: Getty)
One question is beginning to crop up more and more often: what happens when Keir Starmer eventually steps aside? When Andy Burnham is PM, as now looks to be inevitable, what will it mean for Britain? The answer is simple. Very little. Labour’s problems are not confined to one man. They are embedded throughout the party.
Replacing Keir Starmer with another Labour MP will not produce a change in direction. It will simply mean another Prime Minister pursuing many of the same policies that have left Britain weaker, poorer and increasingly divided. The faces may change. The decline will not. The same instinct to tax rather than grow the economy. The same belief that government knows best.
The same obsession with bureaucracy, regulation and ever-greater state control. The same willingness to prioritise ideology over common sense. And once again, it will be ordinary British families who pay the price.
There is, perhaps, another way. If Ed Miliband were ever to become Prime Minister, Britain would discover an entirely new level of economic self-harm. His singular obsession with Net Zero already dominates Britain’s energy policy. Given the opportunity, one could be forgiven for thinking he’d happily drag Britain back to pre-Neolithic times if he believed it would shave another fraction of a percent off global emissions.
Thankfully, that appears unlikely. But even with Burnham in charge one thing seems very likely: more taxes. Rachel Reeves‘ stewardship of the economy has left the Government facing increasingly difficult fiscal choices. At the same time, Labour’s own backbench MPs have shown little appetite for significant reductions in public spending, particularly on welfare.
If spending cuts remain politically unacceptable, ministers are likely to continue looking for additional tax revenue. Rumours are already circulating that a future Labour leader hopeful Andy Burnham could consider aligning capital gains tax more closely with higher rates of income tax.
Labour often presents these proposals as asking the wealthy to “pay their fair share”. It is an attractive slogan. It is also incorrect and one that ignores a simple economic reality. Money moves.
Successful entrepreneurs, investors and wealth creators are not rooted to one country forever. They have choices. Increase the tax burden far enough and some will simply relocate themselves, their businesses and their investments elsewhere.
When they leave, they do not just take their wealth. They take the taxes they already pay. They take future investment. They take jobs. And Britain is left poorer as a result.
According to HMRC, the top 1% of UK income taxpayers contribute around 28–29% of all Income Tax receipts, amounting to roughly £70 billion every year. Whether one likes that fact or not, it illustrates how dependent the Treasury has become on a relatively small group of high earners.
That does not mean the tax system should never change. But it does mean there are real risks in assuming that ever higher taxes will always generate ever higher revenues.
Labour’s instinct is almost always the same. See a successful business? Tax it. See someone creating wealth? Tax them. See investment? Tax that too.
The irony is that Labour always seems determined to claim a bigger slice of the pie while simultaneously shrinking the pie itself.
Economic growth is not created through endless redistribution. It is created by encouraging investment, rewarding enterprise and giving businesses the confidence to expand, employ and innovate.
Britain desperately needs growth. Instead, we have stagnation. We need wealth creation. Instead, we have wealth redistribution.
We need ambition. Instead, we have managed decline.
Whoever eventually replaces Keir Starmer is unlikely to alter that direction. The names may change, the slogans may evolve and the personalities may differ, but unless Labour fundamentally changes its economic philosophy, Britain should expect more of the same.
Labour will almost certainly hold on until the next general election in 2029 rather than calling it early. The question is what kind of country they will leave behind. Let us hope there is still enough left to rebuild.