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Nadhim Zahawi portrait

Nadhim Zahawi is a member of the BIS Select Committee, the Party’s Policy Board and MP for Stratford on Avon.

I used my last column to give six reasons why I’m optimistic about the result of the election. But since then something’s been bothering me. What if I’m wrong? What if, one day in May, on the slenderest of majorities, Prime Minister Miliband trips over the doorstep into Downing Street?

So this week I decided to gaze into my crystal ball and contemplate a very different future for Britain…

The Miliband Government gets off to a shaky start in May 2015. Ed Balls’s first Budget sees the top rate of income tax restored to 50p, the Coalition’s planned cut to Corporation Tax scrapped and the introduction of a Mansion Tax on homes valued at over £2 million. Yet when Balls outlines an extremely modest programme of spending cuts, a major backbench rebellion ensues. Commanding a majority in the House of just three, Miliband is forced to make concessions. By the time of the Autumn Statement, with the unions threatening to cut off funds and set up a new Syriza-style party, Labour has formally abandoned deficit reduction.

Facing annihilation at Holyrood elections, Miliband begins 2016 with a set-piece speech to the TUC in which he talks about being a ‘Thatcher of the Left’ and commits to a course of radical economic change.

In the 2016 Budget he introduces a ‘predator’s tax’, levied on the profits of all energy and financial services companies (an exception for mutuals is negotiated on behalf of the Co-Op Bank). The top rate of tax is increased to 55 per cent and the Mansion Tax is expanded to cover properties worth £1 million. The Budget also allocates funds for the creation of an Office of Responsible Capitalism, a vast quango employing 5000 staff and chaired by the newly ennobled Lord McCluskey.

The Office has the power to impose fines and sack the management of any business it judges to be ‘predatory’. It’s also tasked with setting what it regards as a ‘fair price’ for rents and energy bills each year. Business leaders who criticised Miliband during the 2015 election campaign are immediately put under investigation by the entirely independent ORC.

For a few months, Miliband is buoyed up on populist tide of banker-bashing and left-wing fervour. Emboldened, the Labour Government decides to settle some unfinished business. Their 2016 Education Act abolishes England’s 164 remaining grammar schools and also removes Shakespeare from the National Curriculum on the grounds that he is ‘elitist’. One town, Stratford-upon-Avon, heroically resists, staging sit-ins and protest readings of the Bard in Stratford’s three grammar schools.  

Then in 2017 disaster strikes. A financial crisis in China, triggered by the implosion of its shadow banking system, sends shockwaves round the world. The ailing Eurozone tips back into yet another recession, dragging Britain with it.

Britain’s public finances, already under huge pressure from the mass-emigration of top earners and the cost of re-nationalising the railways, rapidly deteriorate. Unable to secure the votes to resume deficit reduction, the Government’s borrowing costs inexorably begin to rise. So too does unemployment, exacerbated by the UK’s inflexible labour market, which now requires all large companies to pay the Living Wage and create five new apprenticeships for every worker they make redundant. By the following year, unemployment will have reached 15 percent with no sign of peaking.

The Labour Left demand a massive Keynesian stimulus package and Balls attempts to borrow £200 billion from international markets. But with a run on the pound and UK bonds downgraded to junk status, no-one will lend to a Britain which is now a byword for political chaos and anti-business sentiment.  

In desperation, Miliband and Balls attempt to sign us up to the Euro, in order to access Eurozone bailout money. Brussels agrees in return for Britain giving up its rebate and signing up to a new Treaty of Federal Union. A campaign of mass civil disobedience organised by Jacob Rees-Mogg forces the Miliband regime to put it to a referendum, to which the answer is an overwhelming ‘No’. Immediately after, a vote of no confidence is held in Parliament and lost by the Government.

The Conservative Party gears itself for battle in what will be the second most important election in a generation. This time it cannot afford to lose.

Yes, I’m exaggerating, but not by all that much. It would be foolish to look at the global economy today and conclude that there is no risk of another big financial shock at some point in the next five or ten years. Even if Labour stick with their stated plans – and history puts that in doubt – we would still be dangerously exposed. It’s equally true that there are tendencies in the Labour Party who would love to see something like an ‘Office of Responsible Capitalism’ with the power to arbitrarily punish any business they didn’t like the look of. Under Miliband, they are closer to power than they’ve been in my political lifetime and it’s absolutely vital that we stop them.

50 comments for: Nadhim Zahawi MP: The pound scrapped. Grammar Schools too. Lord McCluskey in charge. The nightmare of a Miliband Government.

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