IEA responds to Sir Keir Starmer’s speech on the economy
IEA Chairman Neil Record quoted in the Daily Express
Julian Jessop quoted in City AM
Responding to Sir Keir Starmer’s speech on the economy, Mark Littlewood, Director General at free market think tank the Institute of Economic Affairs, said:
“National crises and emergencies inevitably lead to an extension of state intervention in the economy.
“Political elites typically seek to retain their powers and control over the lives of ordinary people even when the immediate crisis has passed. It is disappointing that Sir Keir Starmer seems committed to this course of action.
“A strong economic recovery will require the private sector to be freed from the ever higher burdens placed on them by Westminster. Taxes and regulations need to be cut, not increased. The enormous hole in the government’s finances will require state spending to be reduced, not hiked, over the coming years.
“There will need to be a full examination of the ways in which various institutions have dealt with the Covid crisis. Some will have been efficient, but others may need drastic reform.
“However, Sir Keir Starmer appears to have already decided that the main lesson to be drawn from the pandemic is that politicians and bureaucrats need to be given even more money and power, despite the fact that we have some of the highest death rates and the most state controlled bureaucratic healthcare system in Western Europe.”
Dr Kristian Niemietz, Head of Political Economy, said:
“Sir Keir Starmer notes, correctly, that Britain was one of the worst performers in coping with the pandemic. But the main lesson he draws from this is that we need a much more active and interventionist government. This is a clear case of ‘Coronfirmation Bias,’ the practice of seeing the pandemic as a justification for one’s own pre-existing worldview.
“It is simply not true that economies with larger public sectors were any better prepared for the pandemic. Italy and Belgium have much higher levels of public spending than the UK has, but their Covid death toll has been just as bad as ours. Meanwhile, some of the best-prepared countries, such as Taiwan, Hong Kong, Singapore and South Korea, have considerably lower levels of public spending than we have.
“There are lessons to be learned from the pandemic. But the idea that we need a larger state is not one of them.”
Professor Len Shackleton, Editorial and Research Fellow, said:
“Sir Keir Starmer’s speech was a wasted opportunity.
“The British Recovery Bond idea is a gimmicky distraction and offers no extra funding which the government could not obtain by other means. There were standard demands – higher benefits, bigger pay rises for the public sector, consulting with the unions – which have been made by Labour politicians in opposition for decades.
“There was a chance for Sir Keir to make specific constructive and helpful proposals. How, for example, does he propose care homes be funded? What companies does he think the taxpayer should invest in, and why? What precise measures does he propose to ‘reduce inequality’, to build back ‘sustainably and securely’? What does a ‘partnership with business’ actually mean? ”
“I’m afraid this was just a standard political speech, delivered in an uninspiring format.”
Notes to editors
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For further reading on why we risk learning the wrong lessons from the pandemic, click here.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.