Ed Miliband must take into the election “a vision of a much more equal and sustainable society” said a letter by figures from across the Labour Party on Monday. But what does that mean?
It is easier to unite Labour members on a vision of decentralisation and bold ideas than have agreement on what they mean in practice. The big divide within the Labour party now is between centralisers and decentralisers, wrote Jeremy Cliffe on Monday.
If that’s the case I put myself firmly on the decentralisers turf. But what could such an agenda mean? Here are some thoughts.
1) Break up the Treasury and give financial power to cities
This would signal not only how far Labour is willing to decentralise and trust local decision makers, but also help rebalance the UK’s growth and development outside of London. Many think that Jon Cruddas’s speech to NLGN was spot-on but will largely be stymied by an overbearing Treasury.
Major metropolitan areas are now the Labour party’s voting base: the party must actively think about how to expand them and give them the power to innovate and expand. We need more and bigger cities outside of London. Create a Department for Cities. It would be good economics and good politics.
2) Robin Hood Tax and Land Value Tax
As economies change and the world becomes more globalised, our thinking and approach must change too. An income tax isn’t just increasingly outdated (it mostly ignores wealth and assets) but inadequate in a world of complex financial instruments.
A Labour government must shift emphasis from consumption and income taxes to a financial transactions tax, which would generate a much needed additional revenue (over £30bn at conservative estimates) and limit wild financial speculation. Similarly, the idea of a Land Value Tax has been praised all the way from the OECD and IFS to IPPR and Class. It would also, as the IFS says, “remove a damaging bias against property-intensive production”.
3) 200,000 homes a year is not even vaguely enough
Nothing illustrates the timidity of Labour’s current pitch to the current electorate than the promise of ‘up to 200,000 houses a year by 2020’. Shelter, Crisis and other housing charities say we need 250,000 new houses a year, just to keep up with demand, let alone fulfil pent up demand from the past.
Labour should be aiming for 300,000 houses a year at least. Remove the cap on council borrowing for housebuilding; devolve housing benefit to councils and let them build houses with it. Unfortunately, Emma Reynolds’s plan to let councils sell off land for self-building will mostly help the well off. Labour should use money from a Robinhood Tax to build a new generation of affordable-housing stock from 2015.
4) Nationalise the railways
It’s ridiculous that the Labour leadership cannot bring themselves to say this: let the rail franchises expire and bring them back into public ownership. But they should not be run under the traditional top-down model, rather a co-op system where workers and management committees work together. If we want a more German system of consensual industrial relations then this is would be ideal.
5) Create a ‘public option’ for energy consumers
Labour cannot afford to nationalise energy companies, but it can offer consumers a ‘public option’, run by a mutual that puts the interests of customers first. The public is largely unaware of Labour’s long term plans for reform of the energy market beyond a bills freeze. This would bring the issue back to focus and illustrate to consumers how Labour will bring their bills down over a longer period of time.
6) Reverse the hike in tuition fees
The government’s hike of £9000 has been a disaster in many different ways: from debt write-offs to uncertainty at universities. Ed Miliband’s hope to bring it down to £6000 was once again a half-measure. We need an unambiguous pledge to reverse the hike entirely in a bill introduced in the first 100 days of a Labour government. Fund it by cutting Trident.
7) A Living Wage pledge
I’m only putting it here in case someone accuses me of ignoring this issue. There’s little I can add to this.
8) Department for consumers and economic reform
Milibandism, if it stands for anything, is about broad economic reform and helping people with their cost of living. Let’s signal this clearly by creating departments that will focus solely on these two mammoth tasks. Turn the Office of Fair Trading into a Department for Consumers, with proper teeth to not only ensure people aren’t being ripped off, but that their information is being protected online.
There doesn’t have to be a tension between a bold vision and a ‘retail offer’ for voters on the doorstep, but that requires Ed Miliband to go beyond vague speeches of intent to specific policy that shows a desire to offer real change.