John McDonnell
Labour's bad for business and is set to wreck the housing market
This speech was given to the Builders' Merchants' Federation.
As Shadow Secretary of State for Trade and Industry in the early years of this Labour government I used a simple catchphrase every time I spoke - I had learned something from the Blair spin machine! It was "Labour is bad for business".
At the beginning few agreed with me. They bought the Blair rhetoric that this Labour government was different - it was going to be low tax, modest regulation, business friendly - a kind of Tory lite. It never looked like that from where I was sitting.
After all they began as they meant to continue, with a windfall tax on the utilities, higher taxes on motorists, and a big boost to regulation especially in the labour market.
50 tax rises later everyone can see what a bogus prospectus they were sold. If Labour was a quoted company they would have been done for misleading shareholders a long time ago.
They smashed pension funds with their £5,000 million tax raid each year. Not only did it hit revenues in the funds, but it helped undermine the stock market, accounting for £100 billion of the losses on shares held by the funds. No wonder most business' pension funds have huge black holes today. They all have the name of Gordon Brown on them.
They demolished the telecoms industry which was flying high at the time, with their staggering £22 billion mugging, making them pay silly prices just to stay in business to have access to the radio spectrum they needed.
They beat up the motorist, fleecing him and her with sky high fuel tax and congestion charges to pay for all the restraints and speeding cameras they wanted to put in to make our lives a misery.
Now it's your turn in the building and property industries. Gordon Brown seems to want to do to housing what he has done to pension funds and shares. He cannot tolerate private savings or prosperity, so he wants to tax house prices to the same oblivion that he has done to pension funds and telcos.
He has already started, with his swingeing increases in Stamp duty. It's already working in London, where prices have been falling for some time. He is likely to hike Stamp duties higher still, is looking at capital gains tax on the main home, and is likely to hike Council taxes on second properties even more than he is lifting them generally. He will not rest content until he has wiped the house price rise out of the family budget. He seems to want a world of negative equity, where people have to suffer under a weight of accumulated debt and look to the state for income in retirement.
As a Conservative politician it is tempting to keep quiet and let Gordon do his worst. The quickest way back for the Conservatives would be a Labour induced collapse in the housing market, which undermine most family finances in this nation. But I am not that selfish. I don't want to see your industry suffer as others have done. You are facing enough hassle from regulation and higher taxation already. So I say to the Chancellor, "Watch out. You could bankrupt the housing market, just as you helped to undermine the pensions market. You will reap a bitter political harvest if you do."
This government has shown you can tax too much. There are no limits to the amount of money they can waste. Your industry is struggling with higher National Insurance and a massive increase in regulation. Join me in opposing moves to wreck the housing market - it would do you even more damage.
So I still say "Labour's bad for business". Now most businesses people agree.
