The statement Keir Starmer should make
5 min read
After hugely disappointing local election results, in a world that feels as unsafe as it has in a generation, in the face of huge challenges to our political, economic and social systems, the government needs to be bolder.
The uncertainty created by President Trump creates an ideal opportunity for a reset.
Happily for the Prime Minister, I’ve written his statement for him.
*Begins*
Mr. Speaker, thank you for giving me the opportunity to make this statement to the House.
As Honourable and Right Honourable colleagues will recall, my government was elected at a time when, although war was raging in Europe, the Western alliance remained robust, and the United States was willing to carry a disproportionate share of the collective burden. This is no longer the case. Our American allies, not unreasonably, now expect us to shoulder a higher proportion of that burden, not least when it comes to preserving a possible ceasefire in Ukraine. This has implications for us at home as well as abroad.
When I became Prime Minister, I inherited the worst economic legacy bequeathed to any new incumbent of No 10 in recent times. Our assumption then was that, by bringing a stability that has been absent for too long, and by overseeing far-reaching reforms in areas such as planning laws, we would be able to turn the economy round and – finally – achieve the growth the country so badly needs.
Though this task was never going to be easy, we believed it was one we could accomplish without raising the taxes paid by working people (DO NOT READ OUT: that was a silly pledge, and we should have known better).
This is no longer the case. Europeans need to step up to the plate and take greater responsibility for their security and the security of Ukraine. Growth is proving elusive. The world is as unstable as it has been since the last world war. And the British people, quite understandably, are getting frustrated.
Given these fundamental changes and following long and careful consideration, I can announce today that the pressing needs of the current moment require a fundamental step change in our attempts to reform this country. Economic strength at home is not merely desirable to satisfy the legitimate aspirations of the British people, but crucial if we are to develop the resilience and military capabilities we will need (DO NOT READ OUT: and, after all, what’s the point of a whopping majority I don’t use it?).
First, we need to find ways to raise the revenue the country needs, but to do so in a way that ensures the heaviest burden falls on those with the broadest shoulders. While our system of taxing income is broadly progressive, the way we tax wealth is not. Wealth increasingly determines life chances. Whilst UK incomes have stagnated in recent years, the UK’s net wealth – the vast majority of which belongs to the top 10 per cent of Britons - has increased from £2.9 trillion in 1995 to £12.2 trillion last year, yet we raised less than half of one percent of that in tax.
And wealth is particularly tied up in property. Yet, remarkably, insofar as we tax property wealth at all, we do it in irrational and unfair ways. But we no longer enjoy the luxury of acting as we have always done. We need to raise revenue now. Which is why I am announcing today a one-off capital levy of 2 per cent of net household wealth.
For the longer term, I am also mandating the creation of a commission to assess how best to replace the current, regressive council tax system, based on house values over thirty years ago, with a fairer system that will raise much-needed revenue. The government pledges to legislate to introduce the new system by the end of this parliament. At the same time, we will scrap the stamp duty that merely serves as a disincentive for people to move house and worsens our housing crisis.
And while fixing our economy, so too must we fix our politics. We know that, for many years now, trust in politicians and our political system has been at rock-bottom levels. We also know that people tend to have more faith in local politicians than national ones. So, we are today also launching a commission to investigate the best ways to devolve not only power, but also cash, to local and regional government. At a time of crisis, we must renew the contract between the government and the governed.
So, too, much we renew the social contract. For too long, we have tolerated the absence of a fair system for social care, preferring instead to turn the issue into a political football. Yet as the Burnham proposals of 2010, the Dilnot proposals of 2014, and the Theresa May plan of 2017 showed all too clearly, we basically agree about the nature of the problem, as well as the broad outlines of a solution. Louise Casey has been asked to come up with a strategy, and I am looking forward to her proposals. In the meantime, though, I pledge to fully implement the Dilnot proposals for social care funding. Kicking this issue into the long grass is simply inappropriate given the challenges we face.
I do not say any of this lightly. These are major decisions with major consequences. But circumstances require bravery. The gradualist approach we adopted after the last election was fit for purpose in normal times [DO NOT READ OUT: it wasn’t, but Trump gives us a perfect excuse to ditch it]. But these are not normal times. Our security and that of our friends and allies is threatened, and responding to that threat requires bold action. The British people are becoming impatient and expect this government to deliver. By renewing our economy, the links between government and the people, and our social contract, we will be well placed to address the challenges that confront us.
I commend this statement to the House.
*Ends*
Anand Menon is Director of the think tank UK In A Changing Europe.
