ALEX BRUMMER: Keir Starmer’s claim that Labour are the real wealth creators is pure hooey. Their policies risk killing the lifeblood of our economy

Now we can be clear – despite Work‘s endless promises not to raise taxes, Keir Starmer and his shadow chancellor, Rachel Reeveswill worsen the pain if they are voted into government on July 4.

Not only that, they are planning an attack on Britain’s entrepreneurs, making their promises to be business friendly and generating investment rubbish.

Rather than being the party that creates wealth, there is a grave risk that Labour’s old-fashioned socialist agenda will actually drive business abroad, destroying consumer and business confidence.

Labor has courted many business leaders over breakfast over the past year in what has been dubbed a ‘smoked salmon and scrambled egg offensive’.

But it is fascinating to note that, as the possibility of a Labor victory grows, not a single FTSE100 company boss has offered public support for Starmer.

Keir Starmer (pictured) and his shadow chancellor, Rachel Reeves, will add to the pain if they are voted into government on July 4,” writes Alex Brummer

Labour’s Rachel Reeves (pictured) has courted many business leaders at breakfasts over the past year

A senior banker told Alex Brummer (pictured) yesterday that he fears a combination of higher corporate taxes and Britain’s obsession with regulation will drive new wealth out of Britain.

A senior banker told me yesterday that he fears a combination of higher corporate taxes and Britain’s obsession with regulation will drive new wealth out of the East. Asia and the Middle East to New York and other financial centers.

Having seen both the Conservative and Labor manifestos, it is clear that there is only one party that understands the need for lower taxes – and that is the Tories.

I accept that Rishi Sunak’s election campaign is deeply flawed. For example, a promise to cut one or two pence from income tax would have been more effective than his promise to cut a further two percentage points from workers’ national insurance.

But whichever way you look at it, the Conservatives’ promise of £17 billion in further tax cuts to boost ambition, entrepreneurship and employment is light years ahead of Starmer’s ‘pinch the seeds of the wealthy’ manifesto.

Labour’s new ‘triple lock’ – a promise not to increase VAT, national insurance and income tax – is smoke and mirrors. The reality is that her obsession with ‘closing loopholes’ is nothing more than taxation through the back door.

For a start, Labour’s ridiculous class war on independent schools involves an immediate breach of its own promise, as it means imposing a 20 per cent VAT surcharge on every student’s tuition – a clear attack on the excellence of education.

Labor Party Leader Sir Keir Starmer and Deputy Labor Leader Angela Rayner after the launch of his party’s manifesto

A heckler is sent packing as Labor Party leader Sir Keir Starmer launches his party’s manifesto

Labor leader Sir Keir Starmer with his shadow cabinet

The tragedy is that three successive economic shocks – the great financial crisis, the pandemic and Russia’s war against Ukraine – have hit public finances. Successive Chancellors believed that there was no alternative but to raise taxes.

This level of taxation now amounts to 37 percent of the economy’s total output, making it the highest level of taxation since the 1940s.

Moreover, the overall burden is expected to continue to rise, thanks to the freeze on inflation-proof tax exemptions until 2028-29 and the increase in the head tax paid by companies from 19 percent to 25 percent, introduced in the wake of the pandemic. .

But at least the Tories are showing that they really believe in cutting these awful interest rates as the economy recovers.

In contrast, Labour’s manifesto is decorated with higher levies.

Around £5.2 billion will be raised in a new attack on the ‘non-doms’ – those who spend a lot of time in Britain but have their main residence abroad – and those who have used perfectly legitimate tax avoidance methods.

What Labor fails to understand is that wealth – such as that controlled by non-doms – is ‘footless’.

Not only will the policy drive money and savings into tax havens, we should remember that many countries, including Portugal, are now offering tax-free housing to the wealthy in the hope of encouraging new investment. Why would they stay here?

Shadow Secretary of State for Climate Change and Net Zero Ed Miliband unveiling plans for a ‘Mission-Led’ Labor government

Labor Party Leader Sir Keir Starmer delivers a speech as he unveils plans for a ‘Mission-Led’ Labor government

Reeves and Labor would have us believe that tackling tax evaders is a painless exercise. And that it is the wealthy tax fraudsters who can afford expensive advice and who will pay most of the deficit. The reality is different. HMRC’s real target will be small businesses and sole traders whose lives have already been made a living hell by finicky VAT inspectors.

In contrast, the Conservatives are trying to give Britain’s self-employed people a break by abolishing their National Insurance contributions.

This article has often criticized private equity and the destruction caused by companies such as Debenhams and healthcare institution Southern Cross.

But for every failure there are private equity successes, such as the financial group Worldpay, which emerged from NatWest after the 2008 banking crisis, and the retail chain Pets At Home.

Much of the continent’s private equity industry has chosen to base itself in London’s Mayfair and the Strand, along with offshoots of US giants Blackstone and CVC.

Their presence brings a flow of money to London-based IT, business and financial advisors. These are some of the reasons why the City of London is the world center for wholesale banking, serving major customers such as financial institutions, government agencies and corporations.

Labor leader Sir Keir Starmer talks to journalists aboard his campaign battle bus

Labor leader Sir Keir Starmer holds a copy of his party’s election manifesto

Labor Party Leader Sir Keir Starmer at Mornflake Stadium

The Labor manifesto opens up the possibility of ending the current system, in which private equity barons pay a maximum of 24 percent capital gains tax on their income. It could amount to a haul of £565 million, which could easily convince private equity leaders to break new ground.

Then take the British oil and gas industry, which employs more than 200,000 people in Great Britain. The largest players, Shell and BP, are among the biggest investors in greener technologies, from EV charging stations to the development of hydrogen as an alternative energy source.

These industries already pay more than 75 percent of their income in windfall taxes and other levies. Yet Labor is proposing to close what it calls ‘loopholes’ with a sweeping increase in levies, taking the tax rate to an eye-watering 78 per cent, which would reportedly raise a further £1.2 billion.

The result could be that new drilling is halted and jobs in the energy sector are shifted to cheaper locations.

Reeves has said she will not be given a budget with immediate effect when she moves to Downing Street on July 5. Instead, she will wait until fall.

Maybe. But the course of events is predictable. When she arrives at the Treasury – should Labor win – her officials will be armed with the latest forecasts, which will undoubtedly show that if her spending ambitions are to be achieved, there will be no alternative but to raise taxes.

So if taxes on ordinary working people really need to be avoided, then I suspect that all capital gains will be targeted.

Tax breaks on retirement savings can also be attacked.

Yes, Sunak and the Tories could have been bolder in their attempts to reduce our tax burden.

But they recognize that reducing the enormous amounts of money we hand over to the tax authorities is a powerful incentive to work harder, get back to work and invest.

Starmer’s claim that Labor are the real wealth creators is pure nonsense.

Their policies will undermine investment, scare businesses and risk killing businesses and entrepreneurship – the lifeblood of our economy.