In his latest attempt to cosy up to non-Labour voters, Keir Starmer has remained firmly attached to business as the saviour of all. He said:

What works for business, works for Britain. More jobs, opportunities, and money in people’s pockets.

Yes, Starmer said “more jobs” after unemployment has risen to 4.6% – the highest level since the coronavirus pandemic. One of the major reasons for the rise is Starmer’s changes to employer National Insurance contributions (NICs). These impacted businesses who have low hours and/ or low income employees through lowering the threshold of which an employer pays secondary class NICs. The Labour government lowered the threshold of company earnings that qualify from £9,100 to when companies earn just £5,000 per year.

Shambolic approach

This has not only resulted in low employment but also a lower amount of vacancies. Compared with last year, there are 21.2% less vacancies in accommodation and food service and 17.1% less in manufacturing. Chancellor Rachel Reeves has said she wants growth to come from the financial sector, instead of – you know – the actual economy. Meanwhile, finance and insurance vacancies are up 9%. The thing is, economists have long warned that financial sector growth actually crowds out growth in the real economy, stifling research and development while poaching skilled workers from real industries.

A different approach to the NIC rise would be to categorise businesses based on revenue and profits rather than harbouring a regressive tax system for employers. The most profitable of firms in particular can afford to pay higher taxes (and wages) without raising prices.

For example, Tesco employs 326,000 people in the UK and makes profit of £6,150 per every employee (including another around 100,000 abroad). That’s a total profit of £2.7bn on everyday food – an essential – meaning Tesco could pay thousands more each year in tax (and wages).

That’s why it’s laughable that Tesco CEO Ken Murphy is saying that the tax hike is contributing to food inflation. More like greedflation.

Starmer and Reeves changes have instead also impacted small businesses who have had to lower their employees by 21%, with almost 47% of them also citing tax as a barrier to their growth. If Labour had looked at the reality of the market and a company’s revenues and profits, they could have raised tax for big businesses like Tesco, while ensuring small businesses can remain viable.

‘Good for business, good for Britain’ – um what?

Another ludicrous part of what Starmer said is the mantra that “what works for business, works for Britain”. The privatisation of essential services certainly works for business shareholders while they milk profits, but it means higher bills, lower investment and higher borrowing costs for the public.

And let’s not forget the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US that contained Investor-State Dispute Settlement (ISDS) provisions that allow corporations to sue governments for impacting their profits. But of course, “what works for business, works for Britain” in all circumstances. And indeed, Global Justice Now has warned that an accompanying agreement to Starmer’s recent trade deal with India could contain ISDS, impacting both the UK and Indian governments.

By James Wright

This post was originally published on Canary.