Thursday, 5 November 2015

Labour can become the progressive force for change

In a previous article I laid out the background to my own political compass. The belief that there is  something fundamentally wrong with a society predicated on vast inequalities, not just in the distribution of wealth, but also of opportunities.  For too many decades we have accepted that the interests of the poorest are inextricably woven into making the wealthy richer. Rather than being appalled by the enormous wealth concentrated in the hands of so few, we are asked to reify it - cast it in political stone.

There is a kind of impossible dream scenario that holds because some people become rich everyone else could too 'if they tried' or put their mind to it, or became entrepreneurial. There is a minimum of truth in the tale, but it is a false prospectus. It is a prospectus that holds the poor responsible for their own poverty. In recent decades we have worshipped those who make money rather than those who create things, or at best we have left  unquestioned the way in which such wealth is accumulated. When the accumulation of wealth becomes an end in itself you have to question what it is for. When wealth creation is predicated on abusive exploitation of the poorest, then it is a matter of social justice.

I should say that I have no problem with people being very rich. I do have a problem with some being very poor and with the way the poor are treated, and I do have a problem with how wealth is accumulated.

The society in which I grew up was palpably unfair.  Much has changed since, but the vast inequalities of opportunity persist.  The Labour party must once again find a clear voice to address poverty and inequalities of opportunity. Social justice must once again form the core of what Labour is about.  But that requires, not simply a wish list and bashing the rich, but  the development of a coherent strategy for government. 
Labour is nothing if it is not a crucial part of the movement that challenges unfairness, or as Harold Wilson  would put it a 'crusade' against poverty.  But whilst the problems are old, old solutions will no longer work - not least because voters won't accept them. A simplistic message of tax and spend is not one voters will support. Or at least they show no appetite for such an approach.  This presents a dilemma for Labour.  It cannot be addressed by ignoring the problem. We need a new narrative. 
Curiously, Mr Cameron is right for all the wrong reasons.  Tackling poverty is predicated on a growing economy and wealth creation. That is necessary; but it is not in itself sufficient. Unless there are profound structural changes in the economy, then a growing economy simply makes the rich richer. Growth predicated on making the poor worse off, as will be the case under this government, is simply an unfair economic settlement.

Growth predicated on cuts in welfare is simply making those with the greatest need pay for the wealthy - a further redistribution from the poor to the rich. This was the approach of the previous, coalition government and now the Tory government. Trickle down economics if successful at all is simply that, a trickle, a drop in the ocean whist the gap between the rich and the poorest grows ever greater.

We don't need trickle down. We need a lifting up, with a genuine approach to fair earnings and fair costs. We need to move to a genuine 'living wage' with concrete policies to enable this. Just as occurred with the introduction of the minimum wage, there will have to be supportive measures to ensure it doesn't affect jobs.  We will need to work with businesses to ensure this works. This is one reason why Labour must work with and not generate a negative narrative about business.  Labour is the party of business because it wants to put people back to work with genuine jobs, and to develop the skills needed to make businesses grow and be competitive. Labour is the party of business because it wants to create sustainable growth.  We need to harness growth but also ensure that it is the ordinary working people who benefit from that growth. There is no reason for this to be business unfriendly. Moving to a living wage makes economic sense. It is key to deficit reduction. Tackling the causes of benefits is the best way  to decrease the welfare bill and reduce the deficit. The causes of the benefit bill going up are low wages and job insecurity coupled with high housing costs.

Moving to a living wage will in its turn reduce the benefits bill and increase tax revenues. The arguments for cuts in tax credits provided by the Tories are at best disingenuous, at worse purposefully deceitful. They put the cart before the horse. A living wage in 2020 doesn't compensate for cuts in benefits now. It is a false and deceitful prospectus. It is a political trick - a trick that went wrong for the government.

We need a fundamental change in the balance of power and privilege. We need a society predicated on fairness, and not one predicated simply on 'wealth creation'.  Wealth creation is essential but it is also necessary to ensure all have opportunities to benefit from it. This is why we need to address the distorting effects of the unfettered housing market and extortionate rents.  Once again, if we tackle rents we will reduce the benefits bill.  Social justice is good economics.

We need to address the housing shortage by building affordable homes and generating social housing - housing for homes, not for profit.  Is it affordable? Yes. The cost of HS2, which many argue is unnecessary and damaging to the countryside, is estimated at £42 billion.  Building social housing for rents working people can afford will help lift people out of poverty and provide opportunities for young families. The cost of not doing this will be ever spiralling housing costs pushing decent homes out of reach of ordinary families.  It will also stimulate the economy providing jobs and infrastructure. It will increase tax revenues and draw down the deficit and national debt.  This is investment for sound social and economic gain. It is sensible economics.  We pumped in billions to rescue the banks, we need now to invest to build the real economy, providing jobs and prospects for our young people. 
This is why we need to hear more about our social aspirations - better educational opportunities for all our children, better housing for all our families, better hospitals and social care for all our people. This can be done, not by get-rich-quick economics founded on an insecure housing boom and private debt, but by growth and investment in skills to meet the demands of the 21st century. Labour can be the party of progress, once again transforming Britain.

The dragon that will not roar is taxation. Labour needs the courage to talk about redistributive policies. This does not mean punitive taxes. It means fairness in the tax system.  Austerity has meant that the poorest have paid the price for the banking collapse.  That is unfair.  A further £12 billion of cuts in benefits will hit them further.  This is unnecessary and unfair.

The poorest 10% pay as a proportion of their income  more in overall taxes than do the top 10%.  Indirect taxes hurt the  poorest most and effective marginal rates make advancement difficult and this iw is why we must address the issues at these margins. 
Wealth creation and redistribution are not mutually exclusive. Labour needs to develop a distinctive message that will appeal to a broad section of voters who I believe are fed up with our politicians dancing on a pin head. 'They're all the same' should be countered with 'oh no they are not'. 
This is not a question of 'left' versus 'right'. Labour has become trapped into avoiding the central issues they should be challenging because they have been afraid of being seen to shift left. But I have met many people who want to tackle unfairness, injustice and poverty and who would not regard themselves as 'left wing' or even socialists. 
I recall a seminar at Balliol College Oxford back when the 'gang of four' had set up the SDP breakaway from Labour. The invited speaker, Shirley Williams,  made the point that the problem with Tony Benn was that he wanted an irreversible shift in the balance of power and privilege. She regarded the 'irreversible' bit as indicative of an undemocratic society. It was an interesting point of political philosophy. Yet surely the purpose of the Labour party of which she had once been a leading member was, and is, to bring about a fundamental shift in the balance of power and privilege.  But what kind of democracy is it that is based on an effectively irreversible inequity in the balance of power and privilege? What kind of society is it that can allow the poorest to get poorer whilst the rich get richer? 
All this is why Labour must challenge the premise that massive cuts in benefits are necessary to 'cut the deficit'. They are not. What is necessary is to increase revenue. Making the poor poorer in the end increases the burden on the health service and increases welfare dependency not reduce it. It is the cuts in social care in the last five years that have produced the biggest strain on the NHS.

To blindly target £12 billion of cuts in benefits without having considered where they would fall and what the consequences would be is a shocking indictment of the government strategy. Labour should have none of it. Labour needs a clearer message and voice for that message. It must now develop a new narrative for change. Labour can once again become the progressive force in British politics.

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