It's back to work day for most in the UK, Keir Starmer included. If he had any sense, he'd have one priority for 2025, which is making the UK government work again.
This is the audio version:
This is the transcript:
It's back to work day for most people in the UK today. And, I suspect that Keir Starmer is amongst those who will be returning to his desk with a long list of things to do. My problem is that I think that Keir Starmer's list of things to do will not be those things that people in this country want him to do.
Keir Starmer is dedicated to the grand gesture, the political plan, and the desire to leave a legacy, even though he's only six months into office already. But the simple fact is that most people in this country want something very mundane from him. They want a government that works. That is not what he's going to promise us in 2025.
I know that because Rachel Reeves has already told us the money to make government work isn't going to be made available. That is ludicrous. It means that everything he plans for 2025 is bound to fail in the way that he wishes to do it. And that is unnecessary because the government can create all the money it needs to deliver what we, the people of the UK, want.
So, what do we want?
Well, we want an NHS that works, don't we? We want one that can begin to clear the backlog, not with a few extra appointments a week, which is what Labour has promised – not enough to make any significant difference to the backlog of appointments that it's got to deal with. We want the NHS to have proper funding. We want the people who work in it to be paid well enough and to be resourced sufficiently that they aren't living in perpetual stress and wishing as a consequence to leave at the first possible opportunity and flee to Australia where pay and conditions are better.
We want the same of education. We want education to work. It's not a big desire, but it's one that is not being delivered. We want teachers to be paid enough. But we also want them to work in conditions which are not so stressful that they, too, are willing to leave the profession for which they trained to look for anything else to do, rather than face a roomful of children who need an education which they are more than able to supply. to supply if only the government properly resourced them to do so.
We need Keir Starmer to address social care, but Wes Streeting has told us that won't happen until 2028, which in effect, means it won't happen forever because, by 2029, Labour will be out of office.
We want Labour to tackle the repairs that are needed to our infrastructure. Blow creating lots of big new projects, except some housing, please. Let's deal with the potholes. Let's deal with the schools that are falling down. Let's deal with the hospitals that are falling down. Let's remedy the failure of the Tory years. Because if Labour doesn't over the next five years, starting this year, then it'll be so much worse by the time somebody else gets into office in 2029, with no commitment to make those repairs at all.
And, whilst Keir Starmer's about all this, he might do some other things that could help this country to work. He could redistribute income and wealth. I wrote the Taxing Wealth Report in 2024 to demonstrate precisely how he could do that. I demonstrated that it's possible to raise more than £90bn of extra tax from the wealth in the UK each year. Now, nobody would want to do that. That's too big a sum for anybody to want to raise in additional tax. But what I provided to the Labour government was a series of choices that they could make to ensure that money was reallocated from those who have an excess of it, which we know they have because they save it, to those who have a shortage of money, which we know they have because they're in debt.
And if that happened, we would get economic growth, which is what Keir Starmer says his goal is, although he's never able to explain why.
And he could transform the rules on pension saving and ISA saving to ensure that the capital that is required deliver the Green New Deal that we need if we are to tackle climate change would be readily available, and it would be a really easy thing to do. But again, it's not clear that he's going to do all of that.
So where are we? We have a government that isn't willing to tackle climate change, that isn't willing to tackle inequality, that isn't willing to tackle the problems in government services that we all know exist because we can see the evidence all around us.
We have a government that isn't willing to create the money that is required to do these things. That isn't willing to change the tax system to create the well-being within our economy that we all want to enjoy and could enjoy if only the government was willing to act.
Keir Starmer has a to do list that is as long as your arm that would make government work, that would make our economy work, that would make us feel better off. But I very strongly suspect that, unlike most people who will be returning to work, who have come back with increased vigour and a desire to make their lives a bit better in 2025 - because 2024 wasn't great, was it? - I suspect that he's returned thinking that it's all about the big political gesture, keeping the left at bay, and nothing more than that.
Keir Starmer, that's not your goal for 2025. Nor is balancing the budget. And nor, actually, is growth for no good reason. Your job is to make government work. Now get on and do it.
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Did you see the recent OBR prediction of 2% economic growth in 2025, because “in most economic models, higher public spending boosts the economy more than the tax rises needed to pay for it”. Words fail me.
Why do they fail you?
It’s the stupidity of the claim, and it’s coming from supposedly intelligent people. They can’t project, back fit or see the extremes such as what happens when you run the number up to close to 100% of GDP. It’s not even clear that they’ve thought about the causes of growth.
The stupidity is that of the person who projects crass projections onto what I say.
I have this rather cloying feeling that most of our politicians accept that we are heading further to the Right and I think that many of them – supposedly free of ideology now as Anthony Giddens suggested in these post Thatcherite times supposedly (except that it is actually market ideology) – will just adapt and survive in that context.
They do not understand perhaps that the politics of ‘no new ideas’ is what leads to this state of affairs – that they are manufacturing it themselves; that they are part of a self-fulfilling prophecy that did not need to be this way.
One can only see it for what it is: a tragedy.
“Leadership is another word for preparation.”
(Vijay Prashad)
Morning Richard, one claim that I have heard as a counter argument for why no main stream political party cannot/won’t go against neoliberalism, for example taxing the rich and more public spending, is because we are part of the global financial system. So by going anti-neoliberalism, it risks the rich people pulling their money out of our system and going to another neoliberal country, and causing (at least in the short term) a financial collapse in the country.
How accurate of a theory is this?
This is a genuine question by the way, from me who does not have economic expertise. Hopefully the question is received well. I see myself as a social democrat but would like to know how feasible other economic solutions are.
Thank you
I see no risk
Money goes where a return can be earned. Everything else is secondary. Good public services create wealth. Most of the G7 have taxes higher than us, some by some way. There is ample room for us to move up in government spending. To claim otherweiuse is just wrong.
Thank you and makes sense.
For sure the current system is failing as well, so raising taxes on the rich/corporations and more money creation by the government, to enable public spending has to be an optimal option currently anyway.
Interesting how your video you shared on the ‘American empire’ demonstrates how China have a hybrid system of public ownership/spending with private sector (50/50) and they have reaped the rewards.
Now no steer Starmer’s recipe for the NHS? Continue with the hollowing out of NHS services by giving more to the private sector.
Honestly where is the vision?
There is none.
I am an MMTer so wholly agree that money not only should be but must be spent. Especially after 15 years of austerity – all that happens if government creates less money is that we all have less money.
But – as Richard well knows – it depends on not over-extending the limited resources available in the economy. Money is not the issue for the NHS but the number of doctors and nurses are and it will take time to train more if more are needed.
The point was raised at this year’s MMT conference in Leeds when a physician presented his wish list for unlimited money creation. Richard, you may know of John Seddon who has applied the Toyota method to services and estimates that half of what we spend on the NHS is wasted. It goes into what he calls failure demand rather than service demand. Creating more money into the NHS will not help if it finances more failure.
Warren Mosler ended the conference with a plan to get rid of the finance sector that is largely parasitical – not as Rachel Reeves thinks, a ‘crown jewel’:
1) a permanent zero interest rate
2) unlimited fixed-price shares
3) fully ensured bank deposits
4) no tax-advantaged savings
The point is to eliminate speculative trading (gambling) from the economy. It is not a question of battling to tax wealth but to prevent it from accumulating in the first place. And re-regulating private banks would be helpful too.
There are ample unemployed doctors and vast numbers of nurses who might be induced back in the right circumstances.
The issue is not human resources here.
Your claims fail. Money is the problem.
And, politely, if you think half of what the NHS does is wasted then you are very sadly deluded about what people ask it to do. If they tried being healthy we could spend maybe 50% of what we do. They don’t.
I am not convinced someone peddling misinformation on the scale you are is making a useful contribution here.
That’s pretty blunt, Richard and not very encouraging of open debate.
I started with the statement that more should be spent – I did not claim that money is not an issue. After 15 years of Tory rule it most certainly is – all across the economy as you state.
Are you aware of John Seddon’s work at Vanguard? It’s just a friendly suggestion you might want to educate yourself. To your point, his main message is that you have to look at the whole system, including wellness as well as sickness – diet, exercise, etc., and that failure-demand comes from sub-optimization caused by management interference in what should be a person-centric system measuring person-centric outcomes.
I assume you must be aware of Warren Mosler, one of the MMT founders? Or do you disagree with the thrust of MMT’s contribution. I understand you know and have spoken alongside Stephanie Kelton?
Perhaps further comments on what you think might be ‘disinformation’ might be warranted. Again, your final statement is a bit broad and dismissive, don’t you think?
Very politely, you have arrived here being massively patronmising, not finding out a thing about what I have done, or written, or spoken to and worked with, and then tell me what I do not know.
My assumption that you do not do your research but pontificate anyway looks to be entirely justified.
For the record, Randy Wray once said I was the only person outside the MMT core group who had ever contrinuted to MMT theory. But that does not mean I always agree with Warren Mosler, as he wul;d confirm.
Call again when you have done your homework, ionclduign the fact that my comment on the NHS made clear I undertsand Seddon and why his ideas don’t work.