Why Are Starmer and Reeves So Determined to Undermine Britain?

The first shop I visited after a brief holiday was our local delicatessen. After the usual pleasantries, the shopkeeper mentioned his week had started horribly with an alarm at 7:30 am last Monday, alerting him that his shop had been broken into.

The shopkeeper saw through a video link that the burglar was still inside. He immediately called the local police station in Islington, London. No one showed up, and the burglar escaped with hundreds in cash and some merchandise.

This incident isn’t surprising to anyone I’ve shared it with. Such break-ins seem to be common in austerity Britain. The police, similar to other public services, are deprived of resources that were once available without question.

What do we constantly hear from the new prime minister, the chancellor, and their colleagues? The inheritance is appalling, worse than they expected. How do they plan to address this? With more cuts—a continuation of the austerity they criticized when in opposition.

Personally, I categorize people into two types: those who lift your spirits and those who don’t.

Labour’s election victory certainly lifted my spirits and those of most people I spoke with. The downfall of governments led by David Cameron, Boris Johnson, Liz Truss, and Rishi Sunak was long overdue. Although it’s trendy to blame much of the mess on Liz Truss, the serious damage was done by Cameron, who supported Chancellor Osborne’s austerity program and made the historic mistake of calling the EU referendum, and by Johnson, who lowered standards in public life.

Sadly, the new government hasn’t kept our spirits high for long. They seem determined to make people as miserable as possible. They talk about wanting growth but make decisions that seem likely to inhibit it, affecting both consumer and business confidence.

How to deal with the inheritance of austerity, Brexit, and sluggish growth? The great economist John Maynard Keynes emphasized the need in tough times to foster “animal spirits.” This isn’t achieved by promising — or rather, threatening — yet more cuts to public services. Nor is it accomplished by ruling out a return to the European customs union and single market.

Starmer’s promise of closer ties with the rest of Europe is positive but doesn’t go nearly far enough regarding the trading links crucial for growth. The so-called twin-track plan for global trade deals and closer EU ties borders on the absurd. Global trade deals depend on Labour’s meek acceptance of the Conservatives’ alternative to the European customs union and single market, namely, the so-called Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

The government is desperate for new investment, but we no longer have access to the European Investment Bank.

According to business and trade secretary Jonathan Reynolds, this is a “real win” for British exporters. However, the Office for Budget Responsibility calculates that membership would add a mere 0.04% to UK output (GDP) over 15 years. This is trivial compared to the trade losses due to Brexit. Environmentalists have also highlighted that shifting the balance of trade to distant economies isn’t environmentally friendly.

Starmer may promise to “turn a corner on Brexit” and rebuild relationships, but by decisively ruling out what matters for our trading relationship, he misses the point. Moreover, his opposition to restoring free movement in Europe for people under 30 is an insult to the younger generation. The loss of free movement, in general, is harming many businesses.

The British economy became a significant part of the wider European economy after joining the EEC in 1973 and, more so, with the single market membership from 1993. Brexit has resulted in chaos, especially damaging small and medium-sized businesses. Many have given up on exporting to our nearest trading neighbors.

The government is desperate for new investment, but we can no longer rely on the European Investment Bank, which used to contribute significantly to infrastructure projects all over the UK.

I’ve previously mentioned the importance of taking a long-term view of the eventual benefits of productive public investment projects. In her Mais lecture, Rachel Reeves seemed to take an enlightened view on borrowing, contrasting with Treasury penny-pinching.

I commend to her a passage in Proust’s Within a Budding Grove, in which the retired diplomatist, M de Norpois, quotes a French statesman: “Give me a good policy and I will give you good finances.”

Source: The Guardian