Dear Financial Voice Reader,

Wednesday 06th November 2019 05:13 EST

Election time. Who will be better for the economy? Who is in your personal selfish interests? Oh, don’t kid me. You want a strong NHS -for personal use don’t you. Well, let’s assume you even think Labour are in the running after their vitriol to India at their Party Conference. Let’s assume you think that it’s worth supporting their candidates who are powerless clearly to do anything anyway to stop such emergency resolutions – so not much use are they?

Let’s play the fun game of which Party would be better for the economy. Hmmm…both major parties want to spend more and make the State the largest it’s been since the 1970s. Why is that bad?

Well, in one sense it’s not. It depends what the money will be spent on. The Tories famously are accused of 13 wasted years from 1951 to 1964 when they were in power for spending on things which did not raise growth.

Labour, well, they are led by a nationalizing socialist, some would say Marxist. So what’s so bad about that? Well, several things.

First, to be able to spend, Britain needs to borrow. To borrow at low rates, it needs a Government the world is willing to lend to. It’s more willing to lend to the Conservatives at low interest rates than it will be to Labour. I tell you that as a financier.

Second, spending on investment projects gives a return. What concerns me about Labour is arch anti-India former Chief Secretary to the Treasury, Liam Byrne. This man cannot pass a week on Facebook without having a go for Kashmir being sperate to India. He was the muppet who wrote ‘sorry we’ve spent all the money’ when his Party lost the last election.

So what about nationalization. Those who remember Labour’s income’s policy and nationalization and have read the Benn Diaries will know they were totally out of their depth and in the end it was the Unions not the Government that was running the country.

The idea of nationalization, just like Marxism and socialism can be seductive to the young, until reality bites and they also read Animal Farm. Human nature takes over. People decide that from each according to their abilities, and to each according to their needs, does not end well in reality when grievances, and envy, and greed are added.

What I do like, is one idea from the economic left which the Conservatives have adopted – wage management ie raising the living wage. But if you are managing salaries, why not rents too? I think we should. Rent caps. What about salaries – no, tried that in the 70s. It didn’t work. Begging unions for ‘pay restraint’ doesn’t work. They are as human and greedy as the hedge fund manager. There, free market competition is the best albeit imperfect controller of salaries at the top end.

Alpesh Patel

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