David Vance SubstackRead More
Labour MP for Peckham Miatta Fahnbulleh is known to be a close economic adviser to he who will shortly become our next Prime Minister – Andy Burnham! So if we understand what she thinks that may give us a clue as to what he is thinking!
She has outlined an outlandish set of proposals that if enacted would dramatically expand the state’s role in the British economy. That’s the Fabian idyll! Whilst framed as solutions to “inequality” and “climate change”, many of her ideas would undermine all economic growth further whilst deterring any investment, and repeating all the mistakes of past nationalisation experiments.
Welcome to Andy’s world!
Central to her vision is a wealth tax combined with yet another windfall levy on oil and gas. Fahnbulleh also pushes for mass nationalisation of land, transport, and energy, alongside the nationalisation of banks and the creation of taxpayer-funded “green” banks. She would block private lending to high-emission businesses and penalise banks for carbon-intensive loans – measures that could ruin our energy security and innovation at a time when reliable power is already strained.
Naturally, tax changes feature heavily: extending National Insurance to investment income, scrapping the upper earnings limit, and hiking capital gains and dividend taxes to income tax rates. A cap on consumer credit charges is thrown in for good measure.
On housing, she suggests tripling the stamp duty surcharge to 9% for multiple homeowners and raising it for non-residents. Perhaps most striking is her call for a “minimum income guarantee” for everyone “except the rich”and the forced sale of existing businesses to employees.
All of her mad proposals betray a deep suspicion of private enterprise and markets. History proves large-scale nationalisation leads to inefficiency, higher costs for taxpayers, and declining service. Punitive taxes on capital and wealth are likely to encourage avoidance, capital flight, and reduced investment – hardly ideal when productivity growth here remains sluggish. Forcing companies to sell stakes to workers sounds is sheer communism and will deter entrepreneurs and complicate business operations.
While Fahnbulleh’s focus on inequality will chime with some on the left, her agenda appears totally detached from fiscal reality and the competitive pressures of a global economy.
Britain already faces high public debt and sluggish growth. Implementing such an expansive programme would likely require sharp spending cuts elsewhere or even higher borrowing, with ordinary workers ultimately bearing the cost through slower wage growth and fewer opportunities. In short, the markets will expose all of this economic insanity regardless of how good it makes Labour MPs feel!
In seeking to remodel our economy along these full on interventionist lines, Fahnbulleh’s ideas will cause more harm than good. When you stand back and look at it, this would be a return to 1970s-style economic planning. It will fail and so will Burnham IF he embraces any of it.
Whether he will or not remains to be seen, but the probability is that he will pivot towards this economic direction and that will make us look back on Rachel Reeves has almost a Thatcherite!
