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Monday, 24 November 2008

High tax rates will lower competitiveness

Yes, I know this is axiomatic - everyone but Labour knows this. Let's just take the effect on one sector of the economy - private education. As this piece in the Telegraph graphically describes, high earning parents want their kids in private schools, and "Parents would rather crawl over broken glass than take their children out of independent schooling".

Now like them or not, the private schools turn out large numbers of well rounded highly qualified young people. Not to say they don't come out of the State sector as well - some decent LEA schools produce outstanding pupils, but consider that Eton got more GCSE A grades last year than the whole of the borough of Tower Hamlets.

Overall, higher tax rates with no tax exemptions for school fees will tend to depress the quality of pupil output as the private sector shrinks and the poorly performing State sector grows. And of course all the pupils taken out of private education will now have to be educated at the taxpayer's expense. Both ways we become marginally less competitive as a nation.

So long term losses in return for short term electoral gains. Isn't that Liebour all over?


Anonymous said...

>So long term losses in return for short term electoral gains.<

If the papers are anything to go by, it seems there will be very little in the way of electoral gains. I've yet to see any newspaper present Darling's announcements in a positive light - even the Grauniad is pretty equivocal about it, tending more towards criticism than endorsement.

I've long held the view that you express - namely, that Labour is devoted short term tactical advantage while ignoring or failing to understand long-term strategy(*)- but I am beginning to think that their recent activities won't deliver even a short term boost. Broon gambled, I would posit, and has lost big.

* = compare Labour's sclerotic and schizophrenice "thinking" on the economy these past twelve years with the Tory policies of the Thatcher years that delivered *decades* of growth and prosperity. That is the difference between Labour and Tory when you cut away all the bumph - one party thinks a generation ahead while the other can't think beyond the next five minutes.

Anonymous said...

Labour's measures make it more difficult for people to afford decent education?

I think you will find this is a feature, not a bug.