He argued that companies ploughing profits back into technology, skills and jobs should receive “aggressive breaks” through the tax code.
The Iceland chief demanded that the government’s new jobs and career service must have “one brutally clear measure of success – sustained employment.”
Lord Walker’s paper, entitled “Our moral and economic duty to make the Labour Party the party of work,” went further, calling for significant reductions in the overall size of the state.
“The expectation of increased state intervention has had disastrous consequences over time,” he wrote, noting that the tax burden was on course to hit a post-war peak without corresponding savings being made elsewhere.
He highlighted that when Tony Blair entered Downing Street in 1997, public expenditure accounted for 38.5 per cent of GDP, a figure the OBR now forecasts will reach 44.9 per cent in 2026-27.