PREVIEW： Brokenomics ｜ Labour & Reform Manifestos
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Summary
In this episode of Brokonomics, we take a look at the remaining Labour and Lib Dem manifestos, and I give my thoughts on what I think of them. I also talk about the Reform and Labour manifestos.
Transcript
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Hello and welcome again to Brokonomics. Now in this episode I thought we'd have a look at the
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remaining manifestos of note, that being of Labour and reform. Last week of course you watched me
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being absolutely tortured by myself reading the Conservative and Liberal Democrat manifestos.
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Now that was a week ago, I've already forgotten what was in the Liberal Democrat manifesto,
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I think it was probably a whole load of 600 pages of eco-twattery. The Conservative one,
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in reflection, I should have given a summing up at the time, but the Conservative one,
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it was just managed to climb, wasn't it? I mean there was nothing, there was no energy in it
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whatsoever, it was defensive, it was okay you know everything is falling apart and we vaguely
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recognise that some of these things are falling apart and we're going to put a sticking plaster
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over it and not actually do anything about the underlying problems. So I mean it was just a
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it was just a woeful, weak, managerialist, you know, let's smooth out the decline, no energy,
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awful manifesto. So it was absolute bloody torture, but I mean they won't be winning anyway.
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Got some more fun ones today, because Labour are almost certainly going to win this election,
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so we need to find out what's in their manifesto and of course reform. Reform are gunning for the
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opposition, they probably won't get it this election, but their manifesto, I'm hoping,
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when we have a look at it, is going to move the window, I would hope. It will start to shift us
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in the right direction. So yes, let's dig into those and I'm on the podcast after this to give
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my reactions on the reform manifesto, so you may have seen some of my thoughts already, but that's
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in the future for me and the past for you and, you know, stuff. Right, so the Labour Party manifesto,
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let's have a look at their top pledges, shall we? All adults to receive a genuine minimum wage
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no matter your age. Yeah, we covered minimum wage last week in the Lib Dem manifesto, and in fact
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also the Tory one, because they're in favour of it now. A minimum wage does not mean you get paid more,
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a minimum wage means it is illegal to have a job if your labour isn't worth over a certain threshold,
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and all it does is it drives automation or offshoring for stuff, or faster adoption of AI,
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or whatever it is. So I don't even know what a genuine minimum wage is, presumably that is a higher
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one, but that is not going to create any jobs, that's just going to speed up, like I say,
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automation or offshoring, so that's a bad idea. Right, increase NHS appointments by 40,000 per week,
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funded by cracking down on tax avoidance. Jesus, right, okay. An extra 40,000 appointments per week
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in the scale of the NHS isn't actually that high. I don't have a figure for what the total amount of
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appointments in the NHS is, but it's a number that looks big that isn't proportionally that big.
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But in terms of cracking down on tax avoidance, can I just point out that tax avoidance is legal?
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It's tax evasion, which is illegal, but tax avoidance is just you avoid paying tax that you
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don't need to, which basically everybody should be doing, including Labour MPs. So, I mean,
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and the definition is, of course, because tax avoidance is legal, but you're just not choosing
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to arrange your affairs in a way that means that you end up paying the maximum possible amount of
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tax that you conceivably could. What even qualifies on that? So, I do like two or three
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days a week here, and I don't work the rest of the week, so am I avoiding tax by not working those
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extra days? I have a lot of money in an ISA, which is a tax wrapper, maybe equivalent to your 401ks
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if you're in America. Is that tax avoidance? People putting money in pensions, is that tax avoidance?
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There's a whole bunch of things that could come under that. So, that is just a vague, woolly, nothing,
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nothing. Okay. Create a new border security command to tackle criminal boat gangs using counter-terrorism
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prevention laws. Now, that actually, I believe the Labour Party might do. The reason being is, I remember
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the last Labour governments, and they used terrorism legislation for pretty much everything, including,
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in some cases, if you took the wrong bins out on the wrong day, they would use counter-terrorism
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legislation to crack down on you. So, I actually believe that they will start using these powers
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willy-nilly for things that they were not originally intended for. So, I believe that one.
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No increase in national insurance, income tax rates, or VAT. Yes, again, another one that I believe.
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This is the whole Blair playbook of when he came in 1997. For the first, was it two? It was either
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the first two years or the first parliament, they kept the Tory tax levels and total spending
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commitments. Now, because the economy had been trending in the right direction, because those
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were back in the days when we actually had a Tory party that believed in conservative things,
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the first term of the Labour government in 1997 was probably the best this country has ever had it.
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Unironically, it was good. The proportion of the state as a share of GDP fell to its lowest level.
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The tax burden was quite manageable. Deficits were minimal. There was a deficit, but it was... No,
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actually, the deficit was virtually nothing at that time. There was a bit of debt, but again,
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it was perfectly manageable. So, again, I believe them on this one, but they will keep it the same.
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And the reason they do that is because Labour have historically got a very poor track record
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when it comes to tax and spend, as you saw these in the later stages of the last Labour government.
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By the time we got into Gordon Brown being the Prime Minister, I mean, tax and spend was way up.
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But I actually believe that they will keep the tax levels where they are to begin with.
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But, of course, they're planning on multiple years in government.
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Cap corporation tax at 25% throughout the Parliament.
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Actually, it should be lower. It should be lower than at least Ireland on 12.5%,
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so we get that inward investment. But, OK, at least they're not going to raise it.
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Launch great British energy with a windfall tax on oil and gas giants.
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Oh, God, OK, this is stupid. So the reason this is stupid is because the oil and gas companies
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basically work on the commodity cycle where over a 10-year period, at some point they're losing money,
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at some point they're raking it in. And you have to sort of look at it over the whole commodity cycle
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to assess where they are. And what happens is every time they are in an upswing,
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most recently because we did silly things with Russia by cutting them out of the energy markets,
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or at least we're cutting them out of our energy markets, which we didn't.
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Actually, we just let the Indians buy it off them and then sell it to us at a markup.
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But anyway, so the energy prices got out of hand.
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As a result of that, because the price of energy went up,
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the energy companies looked like they were doing very well and Labour started talking about a windfall tax on them.
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You can't look at it in any isolated year because you need to take into account there is that lull in the middle.
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And also, the other reason why the energy companies are doing well is because they're not reinvesting
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So it used to be the case that the energy companies would spend a large proportion of their profits
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prepping, discovering and prepping new sites to bring online.
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Government, Western governments in recent years have said to them,
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stop doing that because we're going to run down the production of fossil fuels.
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So they've basically been told that there's nothing that you can do with the profits that you'll generate.
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You can't reinvest them for the future. You have to either pay them out in dividends or share buybacks.
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So again, it's giving this elevated look of what the profitability in the sector actually is.
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And it's not realistic to just cut them out over the phase that they've been talking about cutting them out on.
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Crack down on anti-social behaviour with more police and youth hubs.
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but the problem we've got police is they're all graduates now.
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It used to be the case where a lot of people coming out of the military would then go into the police
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and the Conservatives, who are not Conservative in the slightest and must be destroyed zero seats,
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decided to get rid of the army personnel coming in
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and instead just have a bunch of washy, wishy graduates.
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And they don't know anything and they've been indoctrinated into left-wing thought and they're awful.
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So I don't mind in principle more police as long as they're not a bunch of these wet graduates.
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The problem is we have a different mix of young people in our cities
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and the New Britons like to stab people, which is probably all I can say on that one.
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Hire 6,500 new teachers by ending tax breaks for private schools.
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You should get more tax breaks for sending your kids to private schools
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because it alleviates the burden on state schools.
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Why can't you just take what the government would have spent on a state education
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and get that off your tax bill if you're going to a state school?
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In fact, they're doing it the other way around.
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So all it will mean is at the margin, more people will not do...
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I mean, and you might have school fees of like 30 grand a year.
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You're going to get a lot of people who are like,
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Especially with the debasement that we've experienced as well.
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So you're just going to get people moving over to the state system and greater burden there.
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So you'll need to hire those teachers anyway and you'll get a net sum result.
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This is on the assumption that young people vote left wing.
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And as we covered last time, if we're going to be doing stupid stuff like national service
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or we have a global elite who is desperate to get us into war with Ukraine,
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then actually there's a good argument that everybody should have the vote.
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Because if we get into a world war, it's going to affect them.
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Of course, in isolation, votes for 16-year-olds is silly because 16-year-olds don't know anything,
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But it might not go the way that they think it's going to go.
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Because it didn't with Germany, the German elections recently, the Euro elections there.
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A lot of the younger people voted for the more, what they would consider far right.
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So, yeah, well, anyway, that's in the manifesto.
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Right, introduce free breakfast clubs into every primary school.
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OK, so breakfast clubs are where basically you can drop your kids off at school like an hour or two early
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That's not the direction we want to be going in.
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So school budgets are incredibly tight and often the only way they can make the budgets add up
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So if you make them free, you're cutting off a revenue source for the schools.
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And also, if you make them free, a lot more people are going to attend them.
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And therefore, you're going to have to have a lot more staff in because you've got ratio requirements,
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So what you're doing there is you're depriving primary schools of revenue
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and the marginal bit of revenue that can make the difference because their budgets are very tight.
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And you're pushing up their wage bill substantially.
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So that is going to mean, well, that's going to be an unfunded promise then, isn't it?
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Remove hereditary peers' voting rights and set a mandatory retirement age of 80 in the House of Lords.
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Well, the hereditary peers, I mean, there's not many of them left in the chamber anymore anyway.
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And the ones that are left are genuinely quite sensible in most cases.
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And in fact, far more than the average member of the House of Commons.
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So if anything, it should be the other way around.
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Get rid of the House of Commons and just keep the hereditary Lords.
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All right, now let's whiz through the rest of it, shall we?
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Absolute commitment to the UK's nuclear deterrent.
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Well, I don't know what a NATO test means in this context, but I can tell you what NATO is.
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A lot of people think it's a security alliance.
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So when you join NATO, you have to basically standardise your gear to NATO standard, which means you have to buy all new rifles, ammunition, a whole bunch of things need to be brought onto the NATO standard.
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So part of the reason why NATO has expanded so much is because of the lobbying effect of the defence contractors who supply the NATO gear.
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And whenever a new country comes in, they then have to start spending billions on this buyer's club to get their gear compatible to the NATO standard.
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So an expansion of NATO is absolutely not what we should be talking about.
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Yeah, again, that's just meaning that we're channelling more money to a handful of defence contractors who will then lobby for that.
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Create a new border security command funded with the Rwanda funding.
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We spent £300 million on it and we sent two volunteers out.
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Whether you could create a new border security force for that, whether you could reclaim that £300 million, I don't know.
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Secure a new security arrangement with the EU for real-time intelligence access.
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Is it for all of the new Europeans who are coming in from places that end in Starn and now want to run around chopping our heads off and stabbing us?
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Or is it about going after people who disagree with the EU leaders politically, people like us?
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Establish a new returns and enforcement unit with a thousand additional staff.
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I mean, we should get the whole British Army working on that.
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The first line is move the current budget into balance.
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So we're spending about 1.2 trillion at the moment.
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No, 1,230 is about what we're spending at the moment.
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90 billion is roughly the deficit that we're on at the moment.
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So they're going to move to a balanced budget, aren't they?
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So it's probably not going to come down to that.
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So do you want to get rid of a bit over half of that?
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Get rid of all of the disability stuff and all of that stuff.
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So if you're going to move the budget by 90 billion,
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And also, as we talk about on Brokeconomics a number of times,
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we have an expansionary debt-based fiat money system,
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which cannot tolerate a shrinking money supply.
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Actual inflation is going to be well above that.
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I mean, we might get interim periods of a low inflation print,
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the whole name of the game at the moment is debasement.
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How can we debase the money supply as quickly as possible
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And in turn, shrink the real value of our debt.
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So no, you're not going to keep the inflation target.
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Well, you might keep the target, but you're not actually going to do it.
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No increase in national insurance, income tax rates, or VOT.
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or at least they live here for only a proportion of the year
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and they spend most of their year somewhere else,
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if you just put up taxes, people will pay the taxes.
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Right, close the loophole on private equity capital gains tax.
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because what it does is it causes capital to become static
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rather than move around to where the innovation is occurring,
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because people would rather hold on to a substandard investment
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But again, they're taking the wrong approach on this.
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Right, modernise the HMRC and tackling tax avoidance.
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Well, as we talked about, tax avoidance is perfectly legal.
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Right, support businesses for a stable policy environment.
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that the rules aren't going to change all the time
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and they couldn't stop adding to the policy environment
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and I can't see what's going to be any different this time.
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and promote a pro-business regulatory framework.
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How are we going to have a bloody national wealth fund?
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Carbon capture and green hydrogen manufacturing.
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Yes, okay, so let's deconstruct this one a bit.
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Investing in tech, well, that's not the job of the government,
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but you can set up a low corporate tax rate environment
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that makes people want to innovate here and reduce capital gains tax
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so that capital can be deployed here so that tech organically grows in this country.
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To give you an example, back after I retired and I was kind of knocking around,
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I ended up helping out my local universities on some business advice
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for the tech companies that were coming out of the universities.
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And to a man, every time one of them got some serious traction,
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but a more friendly regulatory environment than we have here.
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So you need to tackle those issues if you want to encourage tech here.
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Ports, yeah, never say no to a bit of port infrastructure,
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but that port infrastructure will probably be used to ship in Chinese TAT to here
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rather than us doing any manufacturing because you're not addressing that.
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Gigafactories I like, big factories, they basically just mean,
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but how are we going to incentivise people to base their manufacturing here?
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I would have done that for the corporation tax thing.
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because steel and chemicals require vast amounts of energy.
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And this is why Germany was predominant in manufacturing and steel
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because they had access to very cheap Russian energy.
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they had old Soviet-era pipelines supplying gas into Berlin and places like that
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and therefore they could do things like steel and chemicals.
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the Nord Stream pipeline bombing has come along
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and Germany is now incredibly suffering in this.
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How are we in the UK with our high price of energy
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going to do steel when we've got a high energy cost
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and we are deliberately trying to increase energy costs
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And that's for carbon capture and green hydrogen manufacturing.
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Undertake a review of the pension landscape and do what?
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Demographics, time bomb is in the process of blowing up at the moment.
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which is an interesting point in itself actually
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because Labour clearly expect, like the rest of us, to win.
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So they could have gone the way of having a bumper manifesto
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And that is helpful because then when you want to push something through,
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it's much easier to get it through the press, public opinion
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and the House of Lords and any other sort of jurisdictional challenges
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or judicial challenges that might come along if it's in the manifesto
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because you can just say, look, I've got a mandate for it.
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They've gone the other way and they've gone through
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And I don't think that they are light on things that they want to do.
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They're just light on things they want to tell us about.
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They're going to undertake a review of the pension landscape
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I mean, if it was consistent with your point about tax avoidance,
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you would stop people putting money into ISIS and personal pensions.
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