Why Ed Miliband and Labour could shatter the allure of the UK

First of all, thank you all so much for helping me attain 20,000 views! I never thought that my blog would get this much traffic when I started, so the views have really surpassed my expectations.

If Ed Miliband is elected in the upcoming 2015 General Election, he proposes raising money for the social services such as healthcare and education by taxing the rich more. It is evident that he has not looked at France’s failed social experiment, where the levels of brain drain are at all time high, with the most skilled and most prestigious workers leaving, and ones from other countries not considering coming at all.

Just because Mr. Miliband evidently hasn’t looked at France’s failed experiment yet, that doesn’t mean that I’m going to overlook it. Francois Hollande came to office in 2012, and France’s economic growth has since stagnated from 2.1 percent in 2011 to just 0.3 percent in 2012 and 2013. The allure of France to the rich and powerful has been completely shattered. Would you want to live in a country which taxes high earners at a rate of 75 percent? Granted, Mr Miliband is only proposing taxes of 50 percent to people earning above £150,000 – but then where is the attraction?

We live in a society that is simply obsessed with money, and this intrinsic trait will only be exacerbated higher up on the totem pole. It may be true that Miliband will raise a little more money and cut the deficit somewhat more through this, but when faced with the Conservatives’ long term economic plan, Miliband’s tax falls flat. People will not want to go to places where more of their money is being taken away and handed to the state, plain and simple.

This high rate of tax is only compounded by Mr. Miliband’s proposition of a new mansion tax on homes above £2 million. If you take all of these factors into account, this means that the richest of the rich and the most powerful people in society will not be attracted like moths to the bright light that once was the UK, but the UK will be a giant dark spot where the richest and the most powerful fly away to.

Given that quite a large proportion of the rich, such as the Hinduja brothers, are heads of global conglomerates, if they left the UK and their company subsequently reallocates themselves, unemployment will increase substantially. How would Ed Miliband like to pay thousands of extra sets of benefits?

By Shrey Srivastava

A finance and economics enthusiast, and someone who wants to share his views with the world.


    1. Nicely written Shrey!
      If Ed Miliband contacted me he could find out about a plan that will reform government social programs to generate enough funds to not only cover their own expenses but also create profit to fund other government projects without tax hikes even reduce or eliminate taxes over time. It does have a couple of side effects though.

      It Creates Jobs and Educates People


  1. There have been quite a few studies done re the revenue generated by various levels of taxation. The Laffer Curve being the classic relationship.

    Economics is far from a precise science; often it is coloured by political views and used as a basis to justify what people want to do anyway.Beware the Keynesians who just want to spend more of other people’s money (and build up ever more debt and liabilities – government has a habit of not recognising all of its future liabilities in the quoted debt) on what they think is right.

    Also beware of over reliance on GDP as a measure; its a statistical construct and doesn’t account for the value added by an economy… the classic example being if you pay someone to break windows and someone else to fix them it results in GDP growth).

    Economists and economic theory knows a lot less than it makes out; hence why the 2008 crash wasn’t widely predicted (even though the level of over gearing and associated debt/asst bubbles, meant that when things slowed down, as happened in 2007, debt levels meant the exposure to risk was considerably higher – all we have done since is to try to re-inflate the bubbles).

    Good luck with the blog,


  2. Hi Shrey,
    Great to see you writing on topics important to you and other young people.

    I disagree with your post above mainly because of the, IMHO crazy Tory housing policy. Do you aspire to own a car in a couple of years? Would you think it was a good thing if the price of cars was rapidly increasing year on year so that it was increasing unaffordable for young people? No?

    I fail to understand why ‘helping’ young people to take on every increasing levels of mortage debt is better than having house prices fall to more affordable levels. We are already taxed on housing… It’s called council tax but it tops out at a relatively low level. The mansion tax is conceptually just adding a couple more bands above the existing ones. The world will not come to an end. Wait and see….


      1. Of course it works, it works fine. Take a bastion of open border free trade like Singapore. The majority of property in Singapore is government owned, Singapore Airlines (Awarded the Best Airline for 23rd Consecutive Year) is government owned, 17% of the Singapore stock exchange is made up of government linked corporations (that’s owned or partly owned corporations), and yet Singapore is often held up as a golden child of free market capitalism. When our own government sells off national assetts, half the time the buyers are companies owned or part owned by other states. I don’t know about you, but I pay my gas and electricity bills to EDF, which is mostly owned by the French government. I hop on a tube train to work and back each day run by TFL, a government organisation. When I get to work my Research Science is funded by EU funds, which are the consequence of pooling lots of different government’s funding. When I get sick I use the NHS. I was educated in a state owned primary school, secondary school and college, as well as a publicly funded university. All developed civilized societies are mixed economies marrying the best bits of socialism and capitalism together, and they don’t have to be in opposition. London would not be a global centre for capitalism without TFL. New private enterprises and entire industries are born out of government R&D. Businesses are run by publicly educated workers. In all of these cases you could leave it entirely to the private sector with no socialist aspect, but that would be bad for business.


      2. The problem with that is when the balance shifts too much as it will if Labour come to government, socialism would wreck the country. Taxing the rich more does not suddenly make the poor richer – that’s absolute tripe.


      3. P.S. https://www.youtube.com/watch?v=T4zmDb_Sj4Y
        Watch the second half of this video to see Zac Goldsmith (a Conservative MP) explaining when you should and shouldn’t privatise. Also some great stuff about the difference between corporatism and free market capitalism. Markets are not equillibriums, without any regulation they tend towards one supplier holding all the cards, because it’s in the incentives of all suppliers to circumnavigate competition wherever possible, and form a monopoly.


  3. You absolutely exposed why countries like Denmark and Sweden, with their high taxes, are such hellholes for the majority of the population, while the zero-hour workers of the UK are delighted to live in a country that caters to the rich and powerful. But hey, you’re just a 14-year-old private school brat that lacks empathy for people not born into the same privileged social class. You don’t know anything about life outside the upper-class bubble. But then again, that’s nothing new to Britain…


    1. If you’re able to reason this out, what did Labour do that was good from 2005-2010? What did Blair do that was good in his 2 terms in charge? Sometimes it seems as if this country never learns. You absolutely CANNOT say that the 2 million new jobs created by the Conservatives were all from the people in the so-called “upper-class bubble”, can you? And if you want to talk about the zero-hours contracts, those are only a 1/3 at most of all of the new jobs created under the Tories. Moreover, did you know that the majority of the population are in favour of zero hours contracts?

      Labour presided over the slowest growth in 50 years, they produced the fastest decline in British manufacturing since manufacturing began, they left us mired in the longest recession since the war, they bequeathed maybe the largest deficit in peacetime history, and they handed over a debt so huge we will still be repaying it when the earth is swallowed by an expanding sun, a cosmological termination which might therefore come as some relief.
      On to foreign policy. One word. Iraq. Two words. Iraq, Afghanistan. Lots of words: 100,000-300,000 killed, 2 million refugees, the humiliation of the British army, the grotesqueness that was Alastair Campbell, and the complete destruction of any trust in what any government will ever say about going to war in the future.
      Which leaves education. Oh, how Labour chuntered on about education. They often liked to say the word “education” an astonishing three times in a row, just to show how much they were doing with education. And what were they doing, apart from spending many billions of pounds on spinny chairs for deputy headteachers?
      Here’s what they were doing: they were sending our schoolkids plummeting down the international PISA education rankings, and now, as we know, ensuring English youngsters are amongst the worst educated in the western world – and the only young people with an education inferior to their grandparents. Finally, I’m pretty sure the 34% projected to vote Tory on May 7 are not all from the “same privileged social class” that you speak of. I’m looking forward to a discussion with you. 🙂


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