PINSTRIPE

I love elections - a cross between a good pantomime and the world cup.

The final night is fun but what I like best is the politicians laying out their promises and trying to sell themselves to us.

Sometimes a politician gets skewered by the media, Diane Abbott’s woeful grasp of figures comes to mind. At other times their carefully crafted nonsense crumbles under the spotlight - Nicola Sturgeon’s squirming as she tries to explain why an independent Scotland joining the EU won’t have to join the Euro (all new members have to agree to do that) by falsely comparing it with Sweden’s position (not in the Euro because members of the EU at the time the Euro was created don’t have to join the single currency). Red face, rise in hectoring voice tone, flat on face. Lovely.

For business though the highlight so far has got to be the Labour Party Manifesto. I have read it, all 128 pages and, rather to my surprise, I loved it. Why, because it was so wonderfully honest. None of the Tony Blair middle way tripe this time but straight to the happy La La Land of true socialism. Private Enterprise bad, Public Sector good. More workers rights, more rights for the unions (that nice man Mr McCluskey), more pay, higher taxes, more holidays, renationalise the water industry, a huge increase in corporation tax. The list just goes on and on. Nearly £50 billion of extra spending at a time when the UK’s annual fiscal deficit and stock of debt are at worryingly high levels, largely as a result of the last Labour Government’s car crash in 2008.

The whole Manifesto is deeply hostile to business. Business must be restrained, mend its ways, kow-tow to the unions once again and pay vast amounts of extra tax. 40 years of hard won progress in terms of economic sanity undone in one booklet.

The Labour party’s plans appear to be properly funded in that the vast increase in spending is matched by equally vast increases in tax falling on two evil groups - businesses and the rich or, to be more accurate, those earning over £80,000. In fact the plans rest on two complete fallacies.

First, that tax and spend works. It does not; time after time around the world the great socialist experiment comes to a shuddering end because people and businesses alter their behaviour, perfectly fairly, so that they pay less tax. The result is that the higher tax rate increasingly translates into a declining tax take.

Added to this is the damaging effect on efficiency of the removal of profit from the provision of public services. Profiting from the provision of water or rail services is not some sort of naughty activity, the profit motive is what delivers more service for less money. Can those who created the Labour Manifesto really not remember how rubbish our publicly owned railways and utilities were before privatisation?

The second fallacy is that there are free hits in terms of taxation which effect business but do not actually affect real people. This is nonsense, businesses employ people, make investments, pay suppliers and pay dividends to people who hold their shares as part of their savings for retirement. If more of business’ revenue is taken away in tax then something has to give, probably employment, real people will really suffer.

The Labour Manifesto, honest though it is, has me almost yearning for the return of Tony Blair. I never thought that would happen.