In an article published in March, I suggested that there were an awful lot of similarities between the policies pursued by the present Labour government and the previous Tory administration. Another previous Tory Prime Minister was infamous for declaring that there was no alternative to her policies back in the 1980’s. That was nonsense then of course, just as it would be today, to suggest that there are no alternative to the policies pursued by Reeves and Starmer. So, what could they be doing?
Ethically grounded policies
As a starting point, it might be useful for Reeves and Starmer to have their policies more firmly ethically grounded than they seem to be at present. At a Labour Party conference in October 1962, Harold Wilson famously said the Labour Party is a “moral crusade or it is nothing”.
Reeves and Starmer might do well to remember that, if they had done so they might have avoided some of the mistakes they have made so far in office. By cutting the Foreign Aid budget, cutting their environmental commitments and cutting support for the disabled, they are not following the idea that the Labour Party is a moral crusade.
We all know that the Tories left a difficult economic situation behind, but there are many more morally decent policies they could pursue.
Here are just a few of them that could be used, without breaking the bank:
Community Wealth Building policies
It has been rightly pointed out on numerous occasions that the present Labour government is letting the North down. This is quite ironic as they would do well to examine the kind of community wealth building that Preston Council have been pursuing for nearly 15 years now.
They are looking at how the procurement process can be made simpler for potential suppliers to bid for opportunities and, also how the procurement of goods and services can benefit local communities. This means keeping wealth within Preston and not allowing it to leak away to wealthy shareholders elsewhere.
Social value
Other aspects of community wealth building include and emphasis on social value, giving “benefits for the local area, such as employment, skills, real living wage, environmental impact, and greater wellbeing”, democratising the economy with the greater opportunities for all, with the development of cooperatives and economic inclusion. Another aspect of community wealth building includes the paying of the Living Wage.
Here is a ready-made, one might even say oven ready, policy which the Labour government could roll out across the country, giving local people a sense of empowerment, while making the country a better place to live. It is surely no coincidence that four years ago, when Labour had a disastrous local election campaign, the Labour vote held up well in Preston. Such a policy would cost little but could bring large benefits both socially and politically.
The Treasury Green Book
To be fair to Reeves, she has talked about reforming the infamous Treasury Green Book. This book skews government investment towards London and the Southeast. It must include a lot more than simply tinkering at the edges, in some shallow performative manner.
Unless the Treasury Green Book is either completely reformed or abandoned altogether, those places which desperately need investment from the government. Their government after all will continue to be left behind and resentments will continue to fester.
A Just Transition
It was hoped that the election of a Labour government would help to facilitate a just transition to a greener, fairer economy. And yet the commitments to green investment have been continually scaled back. What is worse, it seems that the labour government have become embarrassed about even talking about them, with Ed Miliband firmly sidelined at present.
If Reeves continues with her iron-clad fiscal rules, complying with a Treasury orthodoxy that has been seen to fail for years now, this much-needed investment will fail to materialise, and the opportunity for what could be a boost to many ‘left behind places will similarly be lost.
Reforming council tax
If the government really need more money and after 14 years of Tory misrule, then there is one easy way to find it. The reform of Council Tax.
It was discussed in March this year, that the Council Tax should be reformed because the system is “riddled with exemptions, discounts, and reductions based on a range of criteria such as household income, age, and the presence of dependants. This creates a labyrinthine system, that requires teams of council staff to administer and assess. For example, the working-age council tax reduction scheme is based on income bands, and household size. Requiring detailed calculations and complex application forms. Single-person households, students, and apprentices must apply for specific discounts, often involving extensive paperwork and declarations.”
In my view, I have been convinced that either homes should be rebranded or a new income-based tax should replace the present Council Tax. No such re-evaluation has taken place since 1991. This could have the double advantage of both raising much needed revenue, while also being fairer. It is therefore regrettable to read that Local Government minister, Jim McMahon, ruled out any such changed in March this year.
He was reported saying that while local government had been “flexible and agile when it comes to change and the pressures that brings, we do need to be careful that we are managing that in a way that’s reasonable. Today is about stabilising the system, getting the multi-year settlements in place, resolving the underlying formula and making sure that we have a sustainable local government at the end of parliament.” So, no changes seem to be imminent. This is despite the government being voted in on a mandate of change. And the continuing inequalities causing resentments, which could easily lead to the rise of the far-right.
A targeted wealth tax with the money raised ringfenced
Another way of raising revenue would be in the form of wealth taxes. In March 2023, Tax Justice outlined six ways by which they claim that the wealth taxes could raise £50 billion for the Treasury:
- Apply a 1-2% wealth tax on assets over £10 million, raising up to £22 billion a year.
- Equalise capital gains with income tax rates, raising up to £ 15.2 billion a year.
- Apply national insurance to investment income, raising up to £8.6 billion a year.
- End the inheritance tax loopholes that benefit the already wealthy, raising up to £1.4 billion a year.
- Reform the rules on non-dom status, raising up to £3.2 billion a year.
- Introduce a 4% tax on share buybacks, raising approximately £2 billion a year.
Such a move would no doubt result in howls of outrage in the press, but Labour could find a way around that by clearly stating how much was to be raised and ring-fencing it for investment in the NHS and other public priorities, which would be popular with the public.
It could be framed as a patriotic tax and an opportunity for the very wealthy to contribute to national recovery after the Covid-19 pandemic and other recent setbacks.
Plus, it would show those who feel abandoned by the politicians that Labour is listening, and are serious about rebuilding the public realm, and that government can help them. People need more faith in democracy right now, before they turn to drastic and destructive alternatives.
Defeating the far right
Perhaps what Labour is most clearly not demonstrating is a positive narrative about the kind of country they want the UK to be. There needs to be a narrative connected to a feeling of belonging, which can be both inclusive and based on the principles of fairness, solidarity and tolerance, which Labour traditionally stood for.
As George Monbiot and Peter Hutchinson point out in their book, The Invisible Doctrine, “steering people away from fascism…requires an answer to the need for belonging.”
They go on to suggest that that need can be answered by what they describe as a bridging network. Bringing people together from different groups. I believe that the policies outlined above can lead to a fairer society. One in which all people can have a feeling of belonging.
What many who are drifting towards the far-right perceive is sense of injustice, but it is being directed against the wrong people.
They are correct to feel aggrieved. As long as the media and politicians go on pretending that the real enemies of the British people are those who travel in small boats, rather than private jets, they will continue to drift towards the far-right. It is time for Labour to recover the idea of being a moral crusade. They need to start doing more to make Britain a fairer and more decent place. Then and only then, can the far-right be shown up for what they really are.
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