ANDREW NEIL: Almost everything Trump said this week will involve a world of pain for Labour, effective immediately... and Lammy & Co's nauseating grovelling won't help one bit
Labour ministers must have watched Donald Trump’s inauguration speech last Monday through their fingers and with mounting dread.
Perhaps I ought to write ‘should have’ rather than ‘must have’ because I can’t be sure they appreciated its full, deadly import for them and the policies they’re pursuing, such is the ignorance of the Europe-loving Team Starmer when it comes to matters American.
So let me mark its card: almost everything Trump had to say will involve a whole world of pain for the Labour government, effective immediately.
So far the British Government has been most concerned about the prospect of across-the-board Trump tariffs on our exports to America.
Ministers with previously no time for the US-UK special relationship have been bigging it up in a desperate attempt to win a ‘carve out’ exemption for Britain from any tariffs levied on Europe. Even the King was dragooned into sending Trump a congratulatory message referring to the special relationship.
The grovelling has been nauseating.
Foreign Secretary David Lammy, who once referred to Trump as a ‘woman-hating sociopath’ and a ‘racist Ku Klux Klan and Nazi sympathiser’ to boot, now trills about his ‘incredible grace and generosity’.
Whereas Lammy once saw the President as ‘deluded, dishonest, xenophobic and narcissistic’, he is now deemed to be ‘funny, friendly, warm’. Pass the sick bag, Alice.
Deputy Prime Minister Angela Rayner once described Trump as a ‘buffoon’ who deserved ‘no place in the White House’. Now our great guru of geopolitics (and multiple homes) opines sagely on the need ‘to build on the special relationship’.
![So far the British Government has been most concerned about the prospect of across-the-board Trump tariffs on our exports to America, writes Andrew Neil](https://i.dailymail.co.uk/1s/2025/01/24/18/94485775-14322399-image-a-12_1737741944877.jpg)
So far the British Government has been most concerned about the prospect of across-the-board Trump tariffs on our exports to America, writes Andrew Neil
![As Trump cuts taxes, energy prices and regulations, the Starmer government will take us in the opposite direction on all three fronts, says Andrew Neil](https://i.dailymail.co.uk/1s/2025/01/24/21/94490347-14322399-image-a-7_1737752415925.jpg)
As Trump cuts taxes, energy prices and regulations, the Starmer government will take us in the opposite direction on all three fronts, says Andrew Neil
Those who think Trump is impressed by any of this don’t know him. He’ll lap up the fawning but he won’t forget the egregious slights (and those around him won’t let him forget). He owes Britain no favours when it comes to tariffs and none is likely to be given, even if his main target is the European Union, which runs a £140 billion trade surplus in goods with America – exporting more to the US than vice versa – (trade with Britain is broadly in balance).
In truth, tariffs are the least of the British Government’s worries. Starmer’s bizarre efforts to give up then lease back the Chagos Islands will be the first bust-up. Under Trump the US will simply not allow Britain to hand over the sovereignty of such a strategic asset to Mauritius, a Chinese ally.
There will be a humiliating climb down in which Lammy will discover just how ungracious Trump can be in a confrontation. It will sour Anglo-American relations for some time to come.
But the Trump administration represents a threat on a far broader front. Trump aims to consolidate America’s economic supremacy with lower taxes, cheaper energy and much less regulation of business.
It’s worth noting that the UK already has higher taxes, much higher energy prices and a far stricter regulatory regime for business than America.
That explains why America has rebounded back from the pandemic downturn far more robustly than Europe. The US economy is now 12 per cent bigger than at the end of 2019, the eve of the pandemic. Britain? We’re only three per cent bigger. Europe doesn’t fare much better. France is up 4 per cent, Germany is up zero per cent. The Eurozone as a whole 5 per cent.
![Donald Trump takes the oath of office during his inauguration on Monday, standing with wife Melania](https://i.dailymail.co.uk/1s/2025/01/24/21/94490357-14322399-Donald_Trump_takes_the_oath_of_office_during_his_inauguration_on-a-4_1737753533557.jpg)
Donald Trump takes the oath of office during his inauguration on Monday, standing with wife Melania
Trump wants to go further and faster on all three fronts, leaving sluggish European economies, like Britain, in its dust. At 21 per cent, the US tax on business profits is already lower than Britain’s 25 per cent.
Trump wants to cut it to 15 per cent, well below any other major economy.
In Britain, you start to pay the 40 per cent higher rate of income tax at just over £50,000 a year. In America, you don’t pay the highest 37 per cent federal rate of income tax until you earn more than £500,000.
Trump wants to cut income taxes further. No wonder an increasing number of British high-flyers are looking across the Atlantic as the place to build their careers and their fortunes.
Almost 11,000 millionaires and multi-millionaires left Britain in the past year in search of friendlier tax and business climes. That exodus can only gather pace as Labour pursues the exact opposite of the Trump agenda with higher taxes, soaring energy prices and more stifling, costly regulations.
Britain’s punk Left says good riddance to the rich. It is too thick to realise that Britain’s tax base is walking out the door.
Contrary to the Left-wing populist belief that all big earners are parasites, our tax revenue base is hugely dependent on them.
The top 1 per cent of earners account for 30 per cent of income tax revenues. The top 0.1 per cent pay over 10 per cent of income tax revenues. If they go in ever greater numbers – as they will – then everybody else will have to pay more tax.
There was an indication that this has at last dawned on Chancellor Rachel Reeves when she started talking in Davos, Switzerland, where she was schmoozing (unsuccessfully it seems) big business at the annual World Economic Forum, about making her new tax regime for non-doms less onerous.
I can understand why she’s revisiting this since, as many of us warned, her changes will likely result in less tax revenue, not more.
But she’ll only tinker. The die is cast. The wealthy are leaving our shores in increasing numbers, taking their tax revenues with them – in marked contrast to America where I can assure you that, far from an exodus of millionaires (bar a few virtue-signalling Hollywood luvvies), Trump is laying down the welcome mat for more.
The talk in Davos was not just of people relocating to America but of companies and even company headquarters. A major spur is cheap energy. The cost of electricity for American industry is about a third of that in Britain, which now has the highest industrial electricity prices in the world. No wonder our heavy industry continues to be hollowed out.
In just the past three years, the British production of chemicals, cement and electrical equipment, all heavy users of electricity, has plummeted by between 40 and 50 per cent, as companies closed because high energy costs meant they couldn’t compete – or fled to lower cost countries, such as America.
Trump aims to give America an even bigger advantage by encouraging more drilling for oil and gas (‘drill, baby, drill’) and ending state subsidies for expensive renewable energy.
It makes UK Energy Secretary Ed Miliband’s obsession with decarbonising our electricity grid by 2030 even more otiose – a curious crusade of national self-harm.
Miliband and his acolytes claim that, though Britain now accounts for less then 1 per cent of global CO2 emissions, we must set an example for the rest of the world to follow. But far from being the Pied Piper of Net Zero, we’re increasingly on our own.
The world’s three biggest producers of CO2 – China, America and India – are all set to increase their emissions by far more than any conceivable compensating British cut. China and India continue to open new coal-fired power plants on an almost weekly basis and Trump’s America is all in for fossil fuels.
Nobody is following our example, not even those who profess support for the Net Zero mantra, such as Luiz Lula da Silva, the Left-wing president of Brazil, where oil production has risen by more than 30 per cent in the past decade; or the former poster child for all that is green and woke, Canadian Prime Minister Justin Trudeau, who has presided over a 25 per cent rise in oil production. Even President Biden, who liked to talk the green talk, increased oil and gas production to maintain US self-sufficiency in fossil fuels.
Yet our Energy Secretary refuses any new drilling licenses for oil and gas in the North Sea, regards fracking as unconscionable but doles out multi-billion pound subsidies for more renewables.
The conceit is that renewables are cheaper. The reality is the opposite. The more our electricity generation depends on renewables such as wind and solar, the more expensive it becomes, which is why the Government keeps on having to subsidise it.
Huge rises in fuel bills will soon be dropping through our letterboxes to pay for the multi-billion pound upgrade of the national grid to cope with all the problems the intermittency of wind power causes to the power supply.
Unlike America, the high cost of energy is crippling what’s left of our industrial base. It will soon be down to a rump.
Labour boasts about new digital developments to replace the heavy industries. But it does not know what it’s talking about. It’s often thought that digital businesses don’t consume anything like the energy of the old heavy industries. Nothing could be further from the truth. Sophisticated computer banks and data centres are voracious consumers of electricity.
![Almost 11,000 millionaires and multi-millionaires left Britain in the past year in search of friendlier tax and business climes, with more expected in the wake of Rachel Reeves's Budget. Pictured: The Chancellor at the World Economic Forum in Davos](https://i.dailymail.co.uk/1s/2025/01/24/21/94480235-14322399-Almost_11_000_millionaires_and_multi_millionaires_left_Britain_i-a-1_1737752792800.jpg)
Almost 11,000 millionaires and multi-millionaires left Britain in the past year in search of friendlier tax and business climes, with more expected in the wake of Rachel Reeves's Budget. Pictured: The Chancellor at the World Economic Forum in Davos
![Energy Secretary Ed Miliband who claims that, though Britain now accounts for less then 1 per cent of global CO2 emissions, we must set a green example for the rest of the world to follow](https://i.dailymail.co.uk/1s/2025/01/24/20/94468265-14322399-image-a-5_1737752049038.jpg)
Energy Secretary Ed Miliband who claims that, though Britain now accounts for less then 1 per cent of global CO2 emissions, we must set a green example for the rest of the world to follow
![Britain may have left the EU but, under Keir Starmer and Rachel Reeves it is now firmly ensconced in the slow lane of European economies, writes Andrew Neil](https://i.dailymail.co.uk/1s/2025/01/24/20/94490343-14322399-image-a-3_1737751888055.jpg)
Britain may have left the EU but, under Keir Starmer and Rachel Reeves it is now firmly ensconced in the slow lane of European economies, writes Andrew Neil
Trump was able this week to announce a half-trillion dollar investment in artificial intelligence infrastructure for America (it rather dwarfs the measly £600million investment Reeves boasted about bringing back from her recent trip to China) because the three big-tech companies involved – OpenAI, SoftBank and Oracle – know they can count on plentiful, reliable supplies of cheap power.
Contrast that with Britain, where Miliband’s net zero nonsense means power which, though the most expensive in the world, is far from secure because over-reliance on intermittent wind and solar means the national grid operators sometimes have to ask industry to shut down for a while – to say nothing of the growing fear of blackouts. Why would a high-tech multinational locate its data centres in the UK with all these issues when it could go to, say, Georgia in the US sunbelt, which is currently installing an extra 20 gigawatts of electricity (a third of peak demand in Britain) to meet the demands of AI investors? Miliband’s Net Zero zealotry risks killing Britain’s nascent AI efforts at birth.
If Miliband’s energy follies don’t strangle new business then red tape almost certainly will. Trump says he will ditch ten regulations for every new one introduced. It is the prospect of a bonfire of red tape that has business excited again about America.
There is no excitement about Labour Britain, with a government keen to align us back into the EU regulatory structure.
European regulations have already stymied AI on the continent. It beggars belief Team Starmer wants to take us back into them.
We now live in a world in which America innovates, China imitates and Europe regulates. I have even heard the panjandrums of Brussels boast about how the EU is a ‘regulatory superpower’. Well, good luck with that. I know of no precedent for massive regulation leading to growth or prosperity.
Yet even as the competitive threat from Trump’s America looms large for all to see, Brussels doubles down. It is about to roll out a ‘corporate sustainability reporting directive’ and a ‘corporate due diligence directive’.
Taken together they are designed to force companies based in the EU to apply EU rules to their global operations, a clear imperial desire to regulate beyond its borders.
Is this really what Starmer wants to take us back into? Perhaps it is. As Trump deregulates, the British Government is introducing European-style labour market rules which will cost business an extra £5 billion a year, by its own estimate. As Trump cuts taxes, energy prices and regulations, the Starmer government will take us in the opposite direction on all three fronts.
We will be the poorer for it. Along with the rest of Europe, we will stagnate while America ploughs ahead, taking much of our best and brightest with it.
At the same time, Trump will be knocking on our door demanding we up our spending on defence from the current meagre 2.3 per cent of GDP. His latest demand for 5 per cent is just a bargaining position (even America spends nowhere near that, nor has it any plans to do so) but he will not settle for Labour’s current pathetic position that it is aiming for 2.5 per cent – at some unspecified date in the future.
In truth, given Starmer’s chosen rocky road for the UK economy, we will struggle to get to 3 per cent of GDP, which would be a decent amount.
Britain may have left the EU but, under Starmer-Reeves it is now firmly ensconced in the slow lane of European economies.
That is where the rest of the world sees us, including Trump.
The gap between American growth and prosperity and ours will only become more glaring, exposing the folly of Starmer’s strategy and eventually it will be the undoing of him.
Even if Trump gets it only half right, America is in for another Roaring Twenties. As for Britain, we’d best steel ourselves for another Lost Decade.