Last week, Labour leader Keir Starmer warned that Poland is set to overtake the UK’s economic growth by the end of the decade. This claim isn’t just scaremongering. Since 2010, Poland’s economic growth has averaged 3.6 per cent per year compared to the UK’s measly 0.5 per cent. If this trend continues, the average Pole will be £500 richer than their British counterpart by 2030.
Poland’s economic transformation started with “shock therapy” as the Eastern Bloc started to collapse. The country needed a swift transition from a planned economy to one masked on free markets.
To grow Britain’s economy, we urgently need policies which prioritise spontaneous, bottom-up economic activity —rather than top-down state intervention. For all his talk, the Labour leader has shown little willingness to do so.
Starmer has vowed to support the corporation tax increase to 25 per cent — while Poland has signalled no intention of abandoning its 19 per cent rate. The UK must do more to make itself an attractive destination for foreign investment and UK entrepreneurs, particularly as neighbours like Poland and Ireland intend to retain competitive corporation tax rates.
Likewise, the Labour leader led the chorus of criticism for reducing the top rate of income tax to 40 per cent last year. If he thought that proposal was radical, Poland’s 32 per cent top rate might blow his socks off. Although Starmer supported reducing the basic rate of tax by 1 per cent to 19 per cent, that is still a far cry from Poland’s 12 per cent rate on income below 120,000 Zloty (£22,400).
Poland’s competitive tax rates are complemented by its top ranking among all countries for ease of doing business across borders. Rather than emulating the Poles by promising to take advantage of new free trade opportunities, Starmer – like the Sunak government – has dogmatically insisted that British industry should be protected in future trade negotiations. This only serves to prevent Britons from enjoying the ease of trade across borders which has been a key feature of Poland’s growth.
As with the high-spending Conservative government’s of the post-Cameron era, Starmer seems to care little about reducing the national debt. In fact, he has pledged new spending commitments on clean energy, schools, and the NHS.
At just over 85 per cent, the UK’s debt-GDP ratio dwarfs Poland’s at 46 per cent. Emulating the pro-growth Poles in this area would mean not only scrapping those commitments, but also embarking on billions worth of cuts to existing spending.
Of course, it would be inaccurate to paint Poland as some kind of liberal utopia. The governing right-wing populist Law and Justice Party’s attitude towards LGBTQ+ rights and judicial independence is a blight on Poland’s flourishing liberal experiment. EU investment in the country has been extensive and its tax system is overly complex. Nonetheless, we must learn from Poland’s friendliness to foreign and domestic investment if we want to kickstart our own economic miracle.
While Polish workers have long-sought economic opportunity in the UK, we may soon see Britain’s disenfranchised youth drawn to Poland’s bustling economy, cheaper cost-of-living, and less burdensome tax rates. Starmer is right to highlight Poland’s rapid rise, but if his vision is to emulate our eastern European friends, he must deliver the policies to match it. That means our own course of shock therapy, one which decreases the size and scope of government, and allows individuals to flourish.
Source: City AM