Saturday, 12 September 2015

Corbyn will win today - what can we expect?

Fragmentation of the traditional Labour Party will follow - and a power struggle between the centre left and the far far left that Corbyn embodies.
Several of Corbyn’s proposals have been tried over the decades and left a trail of political destruction. Ask low-paid workers in Stockholm or Manhattan if his proposed rent controls are a good idea. Ask Zimbabweans how “People’s Quantitative Easing” worked out for them.
Under the present Chancellor two things have happened on tax. The 45 pence rate is higher than at any stage [bar the last 14 days] of the Blair Brown governments 1997-2010.  The present Chancellor has also made sure that the best-paid have been shouldering a greater share of the burden than at any time in history. Why? Because he cut the top rate of tax from 50%. Lower tax rates lead to higher tax revenues; this is what John F Kennedy referred to as the “paradoxical truth” of taxation. But it’s one that Corbyn is ideologically unable to grasp. A student of tax could also look at France who tried to raise taxes to 75% with disastrous results for the tax take which fell dramatically, as did job creation, entrepreneurship etc.
There is also a significant number of former Labour voters who think that the PM is doing the right thing by the economy, by stopping benefits for those who refuse to work or reducing the benefit cap below £26,000. Fuller details in Fraser's article here: