Along with so many other members – and former members – of the Labour Party my thoughts in the second half of 2015 have been much absorbed with how to respond to the new direction it has chosen to take.
I have never pretended to be tribally Labour. My affinity is more to an idea of social justice than to a Party which once manifested its delivery and contains elements which hope to do so again. So I do not have to pretend, now, that I have not asked whether Labour remains the Party for me. My analysis – right or wrong – is that the path the Party is set upon may well lead – indeed without change is likely to lead – to permanent electoral oblivion. I also believe I could have more influence on Government policy were I not a member of the Labour Party. And the choice between working to save the Labour Party and working to better my country seems to me no choice at all.
What has kept me in the Party is the hope that Labour might again choose to manifest itself as a machine for delivering social justice. That, and a dogged attachment to the idea of good governance. Challenge, transparency, accountability, honesty, representation, diversity: it is a (rather lawyerly) adherence to an idea of how good policy is formed and implemented and overseen that has kept me in the Party. Not because I think Labour has any monopoly over those qualities – it absolutely does not – but because good Government depends upon good governance and good governance demands good opposition. And, enfeebled though its capacity to fulfil this role presently is, Labour is the only opposition the country has.
So I remain to try and cause it to so manifest itself again.
It has been said, and often, that candidates other than Corbyn offered little in Labour’s leadership elections. I think this is broadly true. But it is much less damning than might at first be thought.
Cooper, Kendall and Burnham thought they were competing against each other – and would have time after victory to put together a policy offer. This is, of course, exactly how good ideas are made. They do not spring fully formed from the mind of some mythical leader. They emerge from a process of deep and iterative thought. As I listened to the early leadership hustings what I most wanted was to hear someone with the courage to admit that they were still embarked on the journey of finding out what the solutions were.
And Cooper, Kendall and Burnham did not see until it was upon them the Corbyn steamroller. And then it was too late to respond. And in this, of course, they were mistaken – but they were far from alone.
And although I do not know what they were for I have little sense of what Corbyn’s Labour is for either. His appeal in the leadership campaign was primarily to higher spending and a largely unarticulated notion of change. Since his victory his more lavish policy offerings – for example, closing the so-said £120bn so-called tax gap or ditching the so-called £93bn of so-called corporate welfare – have (rightly) been shelved. And the gruel that has been replaced them has largely been drawn from Labour’s 2015 Election Manifesto – that and the policy platform of Stop the War.
But whether or not you think this analysis fair, what certainly is fair is the challenge laid down by those who remain supporters of Corbyn’s brand of politics: what is Labour’s rump for?
I have tried to engage with others in the rump to formulate a mode of responding to this challenge – and I will continue to. I hope something emerges soon – because I believe time is short. But for the meantime I will write personally, offering some tentative thoughts here and elsewhere. I should say, in particular, that I am very grateful to the New Statesman’s political blog for giving me the space to write. I hope they will continue to – especially as I wander further from my area of professional expertise.
So in the coming months – at least as time allows, because my workload in the coming months is especially heavy – I will write on some of conversations I believe the Party should be having. I hope to write on the following themes.
What do we want from our State?
Whilst ‘anti-austerity’ may unify us internally – although I sometimes wonder whether this is only because the expression is so open textured that we can march in uneasy step behind it – I think it is (and rightly) electoral poison. To the public at large, it neatly articulates their fear that Labour would deliver more spendthrift Government. To the taxpayers of today and tomorrow who must fund it, it is an undifferentiated appeal for a bigger state. Its appeal to that part of the electorate might be compared to the appeal to those who must suffer it of (some amongst) the Conservatives’ desire for a smaller state. Both are unprincipled and both are wrong-headed. But the difference is that the Conservatives realise this and do not campaign on it.
Instead, we must start by identifying what we want the State to be. We must make the case for it to exercise those functions. And what delivering them properly would cost. And if the result is spending more then we will at least have a principled basis for explaining why that is the right thing for us to do as a society.
What should be the relationship between business and society?
If I rub my crystal ball, this emerges as the defining political question of our time. As our lives fall into ever greater and more uneasy thrall to the power of money, what as a society can and should we ask of those who have it? How can we ensure business works for all of us? It is this question – and its answer – that represents perhaps the one great opportunity open to the Left. It is space that the Right is politically unable and financially unwilling to occupy. Scepticism of whether business has our interests at heart is both deep-rooted and widespread. We all sense – even if we find it difficult to articulate them – the ways in which money has come to corrode values that all of us hold dear.
But there are yet further levers open to sophisticated Government for ensuring that business behaves in all our interests. And a carefully modulated argument – challenging but not oppositional – for developing and wielding those levers would, I believe, deliver real electoral gains. Only Labour can persuade voters that it is on their side – but it still has to do so.
What should our tax system look like?
As the world changes, as wealth continues to cascade up, adhering to fewer and fewer hands, the Left must plan for more than accretive changes to rates and bands of taxation. The case for examining whether we get value for money from the very substantial sums of revenue foregone through tax reliefs – handsomely in excess of one hundred billion pounds per annum – makes itself. Inheritance tax must be replaced by a system which is both fairer and more fiscally meaningful. And Labour cannot forever turn a blind eye to the possibilities of taxing wealth rather than squeezing ever more from income. Unless the pattern of wealth accretion changes – and I do not think it will – there will come a time when this question is no longer the right question to ask, but instead is the only question. Labour must be ahead of the curve. The starting point, it seems to me, is to ask whether wealth taxes might give us greater fiscal autonomy: is capital more or less inclined than income to flee our borders.
But Labour’s narrative around redistribution has wrongly fixated on tax alone.
The housing market, too, increasingly functions as a system for redistributing wealth, regressively, from renters and other non-owners to those who have property.
The planning system creates scarcity – less than 10% of our environment is built on with half of that ‘built on’ as subordinate garden – and thereby preserves and enhances the wealth of those who own property to the cost of those who do not. The consequences for those who cannot hope ever to own a house in our Cities – and for the economies of those Cities – and for the money we have left for productive investment – do not need to be spelled out here. But a bold reform of the planning system should not be a mechanism for delivering further wealth to those who own the land upon which new houses might be built. Labour must ensure that the bounty that planning reforms occasion is shared with the State. So that the State can deliver the infrastructure investment that those reforms necessitate – and which will deliver prosperity to other regions too. This can be achieved by taxing planning gains.
The labour market might also be seen as a redistributive mechanic.
If you erode the pay and protections offered to employees you make it easier and cheaper for business to engage them. The result (as we have seen) is an increase in employment of marginal quality to the cost of those who lose bargaining power and the benefit of those protections. On the other hand, where you drive up the price of labour – for example by increasing the statutory minimum wage – you can reduce the propensity of business to employ, distributing from it and those not in employment to those who are. This should not, either, be what Labour is for.
Labour needs to have a honest conversation about these effects. I do not ignore apple pie truisms about the need to create a highly skilled and productive labour force. But we must also have a conversation around where to draw a line in the sand. How can we ensure dignity in the labour market for the low skilled? As a society what is the baseline quality of employment that we will permit business to offer to workers? The right answer will be the familiar product of a marriage between principle and pragmatism. But it must come from these questions – not a wilfully myopic outbidding of the Conservatives on the level of the minimum wage.
So these are the themes that interest me. I will write more on them.
But I am only a lawyer – and a tax lawyer at that. There are others more suited than me to develop these – or further or better ideas. My modest goal in the coming year is to contribute to or precipitate a conversation. If your vision of the Labour Party is that it is a machine for delivering social justice I would like to issue to you an invitation. Please respond, here or elsewhere. It really doesn’t matter where. If the ideas are good, and well expressed, people will find them.
All of this means I will do less in the way of scrutiny of the Conservatives’ tax policy.
It is easy to stand on the sidelines and criticise – and after all we have so many targets to choose from. But although vigorous opposing may serve the purpose of making us feel better about the ugly reality of not being in Government, we should not fool ourselves into thinking that it is any replacement for the process of articulating our own, positive, vision of the society we would like to see and create. It is only by presenting that electorate with a better vision than that the Conservatives’ offer that we can hope to bring about the change we would like to see.
Thank you for this. I look forward to your ideas being fleshed out over the coming months.
Interesting and insightful – thank you.
I think though that I would ask a further question, similar to yours.
What should be the relationship between the state and society?
The Left has a propensity to conflate the two – I think that no longer works, if it ever did. Neither, it seems, do you. You mention planning and tax reform as priorities, yet these are things which are, and always have been, within the purview of the state. Since it has, we agree, been unable to regulate these areas to the satisfaction of either of us, or to the good of the country as a whole, and shows little sign of changing that, perhaps less and more sophisticated regulation is required.
Perhaps, even, more simplification, with as much as possible being left the market (which is, after all, just all of us acting in aggregate) to decide.
Not because the market is perfect, but because government appears, all too often, to be much worse.
So, smaller government may well be better government. I have little optimism that either side understands this, though, or will willingly give up the power they have accumulated.
But the tribalists on all sides will go on voting for them anyway.
Very interesting and a good read, thank-you. I agree with much of what you say, and would be interested in how you would respond to the usual critique of some of your ideas, specifically:
– Taxing wealth and/or imposing stricter conditions on employers would lead to capital flight and a reduction in the number of jobs; therefore lower welfare overall
And a couple of other questions if you would indulge me:
1. Is it possible/plausible to apply different bases of taxation to businesses, dependent on the type of activity? E.g. applying a uk turnover tax to Uber, Starbucks etc
2. Why is the general view of taxing non-productive (or less productive) capital (wealth, inheritance) so negative? The Tories represent it as a tax on aspiration, a position that has much traction with the electorate. But surely these taxes represent a more coherent approach to maximising productivity and therefore overall welfare. Could labour campaign on increasing the ‘pool’ taxes by delivering much lower ‘flow’ taxes? Or would this be seen as too politically radical?
3. The elephant in the room for the electorate seems to be immigration. From a pure labour demand/supply equation, increased immigration benefits the employer (business) over the supplier of labour (the working man). Does Labour’s internationalist stance conflict with its historical drive to improve the lot of the working man?
Thanks in advance if you have time to consider these.
Good questions all. In some haste as am in NZ, and it is past my bedtime, the real problems with taxing wealth are practical rather than conceptual. Whether wealth flight is more or less likely than income flight is, I think, a really important question. Obviously there are some types of wealth that can’t flee – like land and businesses. But it requires real thought and I will come back to it.
I’m encouraged and relieved to see you’re prepared to persevere with Labour. Personally I come from the tribal side but I’ve been having the same internal debate. My fear is that the Party lacks the talent in Parliament to give it the intellectual and practical weight to overcome internal opposition and external scepticism.
I’d like to address one key fundamental (with a policy proposal) that you highlight in your superb piece above.
The relationship of the state to the individual, and the state to individuals collectively, has evolved. Forty years ago, 40% of the working population were employed by the state, now it’s about 20% and probably falling in the years to come. Work, welfare, the position of women, housing, and other factors central to economic wellbeing have changed hugely, and so have attitudes about individual economic liberty.
It’s no longer possible or desirable, I think, for the state to have ambitions to shape lives as it once did so directly and, even more significantly, the public looks unwilling to entrust government to a party that explicitly seeks to redistribute wealth. While reducing inequality must remain central to Labour’s mission, how can it do so without threatening, or appearing to threaten, the lifestyles and freedom of choice of the ‘many’ (because let’s be honest, the many are at least comfortable, if not without some precariousness). The ‘many’ work in the private sector – and probably feel that Labour attacks on private wealth/wealth generation are likely to impact directly upon them.
Reducing inequality and improving lives must not therefore be seen to be about ‘taking sides’ – telling (or implying to) one section they can only be better off at the expense of another. Rather, we should be reducing inequality by empowering and enabling individuals to overcome their circumstances.
Labour must put the tools to achieve greater personal and family prosperity into everyone’s hands. It’s not new or even particularly radical to talk about the state as an ‘enabler’, but so few policies ever seem to achieve it at a practical level. The practical answer to our individual and collective economic challenges is ‘Skills’. Individuals get stuck in jobs they hate or aren’t really cut out for; people are excluded from labour markets; they get into a rut or find they can’t advance due to sclerotic or unsupportive employers; our economy suffers huge productivity challenges; short-termism and dividend-focused businesses fail to invest; we suck in labour in areas where we can’t fill skills gaps. Our nation is, in short, failing to provide skilled labour and failling to allow people to fulfil their ambitions.
At the same time, quitting a job or doing a course at weekends or evenings is not a practical option for many. Loss of income and/or cost implications of course, transport, location, rule it out.
Labour should provide for a huge expansion of adult education, offering incentives to business to allow workers time off, sabbaticals, evening and weekend training, etc. Short and longer-term courses should become a standard part of our employed lives. Interest-free loans, top-ups to wages, guaranteed minimum incomes while on courses – there are various ways to fund people while they train. We should accept time out of the labour market to improve and learn new skills as a matter of course. We must be brave in allowing people to quit their jobs to do courses without them losing all their income; we can work with employers to develop skills that benefit them without getting into a stale argument about subsidising private wealth.
Labour’s relevance in the 21st century depends on it being able to identify with aspirations (the dread word) that everybody shares: to do what one wants, the ability to earn more and do nice things, and provide security and opportunity for one’s family. No longer a paternalist party of the poor, but treating everyone as a grown up, focused on removing barriers.
Generally agree, though harder to agree that the ABC Three were postponing ideas rather than bereft of them.
Their platform was surely “carry on triangulating” and they were all rather too tolerant back then of austerity for the poorest – rather than growth for benefit of the broad population – as a means of balancing the nation’s books.
I am particularly interested in proposition of taxing planning gain. Contribution from developers has been much reduced from an already low 2010 level.
It is now very hard to find affordable never mind social housing anywhere in the mix of planning applications and master planning documents. And the path of the UK proportion renting (largely from the PRS rather than RSLs) has crossed that in France as it rises steadily.
Thanks Matt. That’s really helpful. I was having the same conversation with Frances Copolla on twitter about the state as enabler in the context of basic income; but adult education is another fine expression of these principles which are important but tough to articulate in concrete policy terms.
I’d go for much of what’s said above but, as noted, the ponderers and current doubters / stickers-on-ers are multitude, and perhaps we need less an ‘invitation’ than a (or several) platform/s to express our thoughts…. many of us are saying things, but few seem to be listening.
For me the most fundamental thing of all is that the state protects those most in need of protection [http://hilaryburrage.com/2015/11/04/eradicating-female-genital-mutilation-book-launch-4-november-2015/ – comment towards end]; and that does indeed mean we must ensure that everyone has access to the education, health care and so on that all people need…and beyond that it means the fair and efficient distribution of resources and power in business, research, environmental and personal services policy, housing and much else.
In other words, a decent society in which the command of resources does not also equate to the unbridled command of power – which might also be said to be a society in which an informed electorate results in a democracy which really works.
And yes, I do believe that the Labour Party should (but is not really currently) be the vehicle for this ambition.
So… where are the platforms from which the voices of the ‘worried committed’ may speak out? There’s a role here for the people who wanted to be Leader but now aren’t. They could enable and nurture the forums for proper debate and progress, before it’s too late. .
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Would it be possible to set 2 minimum wages?
A lower one for companies fully tax compliant with no “dodgy” international tax minimising methods and a higher one for the likes of Google/Starbucks etc..
Most people just aren’t interested in politics. Witness turnouts in byelections where it appears the majority don’t care to have an MP until the next General Election comes round ( that would save some money! ).
Rather than trying to make politics interesting and engaging, Labour should try to keep politics boring. They should promote policies to provide public goods and that deal with externalities ( economics text book definitions will suffice for this ). That pretty well covers what the State is for.
And get out of everything else – because given how disinterested people are they need to be also aware of what the State is not for.
“Instead, we must start by identifying what we want the State to be. We must make the case for it to exercise those functions. And what delivering them properly would cost. And if the result is spending more then we will at least have a principled basis for explaining why that is the right thing for us to do as a society.”
This is pretty old for 2016. The cost is the real resources used. All spending in the UK generates about 90% induced taxation and 10% savings after the spending.
See for example:
It’s quite simple. A large proportion of the public (the swing voters) want a party that they can trust with the economy, who aren’t bastards.
Economic trust is paramount. A swing voter will not vote for a party that they do not trust with the economy. When faced with two parties they can trust with the economy, they will vote for the least bastardly.
Currently that’s why the Conservatives are doing well – while everyone agrees that they are bastards, they are the only party that swing voters trust with the economy and thus hoover up all the swing votes. If Labour could be trusted with the economy this would change.
The other three Labour leadership candidates understood this, but made the mistake of thinking that party members were swing voters and would vote accordingly. They are not. For them, bastardness is more important than economic competence and thus it may be that the Labour membership will not elect a leader who can be trusted sufficiently with the economy to challenge the Tories.
A really interesting blog with plenty I’d agree with, but I’m not completely convinced by your point re ‘anti-austerity’ toxicity. Perhaps you’re right and we’re past the point where the electorate can be convinced of an alternative to austerity (or austering messaging), but it seems to me that to tacitly or overtly support this provides Labour with two problems.
The first is that austerity is bad policy, and if we start as you say from the position of what we’d like the state to be/do, it is very likely to fail as an economic strategy. The second is that it reinforces every single Conservative argument. Labour may not be able to win if it is seen as spendthrift, but it certainly can’t win by supporting policy that seems perfectly designed to undermine its record in government.
To say we shouldn’t run on a platform of anti-austerity isn’t to say we should support cutting spending. There is a positive case to be made about what kind of State we’d like to see. We should be championing the bit that the public wants – better NHS, public libraries, no foodbanks, better infrastructure in the Regions, a thriving New Economy, and so on – rather than the bit the public doesn’t want – i.e. just saying we’d like to spend more.
I have thought about your post for a few weeks. Like you, I am a tax advisor: like you I am left of centre. I advise clients how to mitigate tax but I also worked for HMRC for 3 years as an anti-avoidance advisor, only leaving when made redundant at the end of my fixed term contract due to austerity measures. I saved many £100ms due to my policy and enquiry work. Yet I also changed law for the better to support business. My CV doesn’t mean I have the perfect background, but equally from that summary, I’m not obviously left or right wing.
But It physically revolts me to consider voting Conservative. At a time when fiscal money is tight, to remove the ‘Spare Room Subsidy’ to those who by definition are amongst the poorest in society but allow IHT relief on properties for some of the wealthiest, is wrong. To even consider reducing tax credits demonstrates a lack of awareness of reality by the group of posh boys. I have never, will never, could ever, vote Conservative. I have gone to my local polling station and spoiled my ballot rather than voting Conservative (local election – one conservative and one independent l). I have known this as an article of faith since I first voted in 1983.
We can ignore the LibDems here – they ate currently not electable collectively and probably individually. (For transparency l, I was a member of the SDP from 82-87 and I’ve voted LibDem tactically, living in a Conservative stronghold, Labour long way third). However, could I vote for Corbyn’s Labour? I was a member from 1995 to 2009. No I can’t. I am very pro-European. I am also instinctively but I accept not rationally, pro-Trident. I am anti-austerity but that doesn’t mean opening the floodgates. There is nothing in Corbyn’s Labour that calls to me.
Many (rightly) say that the national economy cannot be equated to a household. They then say that those that do are wrong. However, whilst economically it may not be correct that may not be the right political argument.
Let’s accept that we can use household income as an analogy – Therefore, it wasn’t that Labour maxed the credit card, or didn’t fix the roof; Labour tied us to expensive gym memberships and car leases – we then lost our jobs.
That doesn’t mean we can’t borrow now – almost every homeowner borrows multiples of income to buy long term assets, such as our houses. We should be upfront, proud and voluble about so doing – (we need to invest for the future and max the cards to do so) but we need to be equally strong about looking at every penny of spend, (including tax reliefs as you and the Murph have said), to make sure it gives value for money. That also includes wages of public sector employees as much as we wish it didn’t.
What political party do I want? The most left wing that can be elected. One that is for social fairness – which requires decent pensions, health and social services, that welcomes refugees because we can afford it, that gives educational opportunities for all, regardless of income. But that requires both economic competence and the electorate to believe that there is.
For all the ‘we just have to put it to the British people, a true socialist view and they will elect us’, that has never been the outcome. I entirely accept Corbyn’s absolute belief and integrity but would I rather have the true faith in exile, or Tony Blair? Apart from Iraq, Tony Blair every single day. Fair to say, ‘is there somewhere in between?’. Dunno – but I would rather go 5 degrees to the right, than 1 day of Conservatives in power.
I do not see Corbyn and McDonnell ever giving me a policy portfolio which I could support (I accept I could be wrong). I also do not believe they can present themselves as being economically competent because they have given so many hostages to fortune in the past.
Thanks. I’m flattered to have written something sufficiently interesting to have engaged you for that period.
This is all very interesting and useful, but I see the immediate issue being the EU referendum. I’m very pro EU and think it’s critical that the UK is in there fighting for influence etc. What really worries me is that Labour’s disarray will stop them making cogent arguments for Remain and if Cameron is not seen as having got a “good deal” then the Leave argument will run away with the campaign, with Labour not having enough weight or authority (or maybe even coherence) left to counter it. I know there are many on the left who are equivocal on the EU, but I’ve never heard an argument that leaving would in any way improve social justice.
I agree with that. Influencing the result very important. And a thoughtful left out of power would wonder why a rampant right is so keen to escape the constraints the EU imposes… But given timings, it’s not something I presently plan to write about.
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I enjoyed your article but this is my take on a couple of things…. Given that the labour party pushed through revolutionary ideas in the beginning and given that those ideals are now being eroded on a daily basis..surely the new labour should be taking us back to basics and starting again. You talk about business and its aims. Frankly you are right in that it is solely driven by greed,with no regard for the ordinary people caught in its snare of zero contracts ..small contracts..leaving employees with no ability to negotiate a better future for their families as no mortgage company gives to someone classed as part time whether they work a ninety hour week or not..So in busy times the employer can hire and withdraw as he chooses.. This is about employers looking after themselves with no thought for others just as it was in the beginning.. It has not changed from the days when the men stood huddled on a corner being chosen for a days work…A basic right to work and to be able to better yourself..not become a slave for greedy employers who have fooled the government that they cannot afford to give people a full time well paid and decent days work.The labour party must have been founded on the labour of others and surely they have to believe that these sort of practices are wrong for all of our society, leaving the electorate feeling trapped in a system akin to slavery.In the matter of taxation which you also mention,once again the ordinary man has no escape. He pays tax and insurance from his weekly or monthly wage…tax on his car..tax on his clothes…entertainment…death…birth..you name it…He has no place to hide his earnings and the government gets right in there…On the other hand the government seems to be afraid to investigate and collect from big business and small companies who also dodge their responsibilities..I might add..the checks and balances are not in place to weed them out either. My own view of a labour party is not social justice. It is a party of intelligent human beings who are honest and that they will never be able to be bribed by some big greedy corporation to take decisions detrimental to the nation. A knowledge of an honest party who will tell the people how jt is…The crucial thing is that the leader of such a party is intelligent honest…and surrounds themselves with like minded people who only have the interests of this country on the agenda….The farce which I have witnessed in the commons and the recent attack on the present leader shows a total disregard for his mandate from the members to be there..Regardless of your opinion… The rally cry of the labour party should be foremost on each members mind…So to finish. The party must be pulled together by like minded people..They then form a strategy to move forward. Then they put that strategy to the people in the election. The leader must be given the respect of the party in order to make that happen…The crucial thing for labour is to make the public aware that they have the ability to work out finance..as for some reason they keep getting mocked for the down turn when in fact it was the little men in suits who thought up the idea of giving people without jobs at all mortgages and destroyed through greed the financial structures…There are so many more points that I personally could bring up but it seems to me that the labour party will remain unelectable only because the membership of it will not unite..fight..and put all their goods out on the table.. It really is time for a revolution..not where we run around rioting but where we have the ability to sit down and look at where our country is heading ..how to get there and the pitfalls to be faced on the way…So many wonderful people who can put that package together and lead the way..My call to labour is get the job done as soon as possible and start to show the way to the electorate before its all too late…