Labour’s Love lost

When I was 16 I joined the Labour Party for much the same reasons Daniel Clarke did; now the former Labour PPC for Eastleigh has joined the Liberal Democrats because he feels that our policies best advance the causes he cares passionately about, social justice, the environment and above all moving towards a Britain of ‘opportunity for all’. One thing I think we still don’t fully grasp in this Party is that for many people the commitment to the Labour Party is often as much emotional as intellectual. In many places voting Labour is almost a badge of identity (due largely to historic class identification) so winning support from ex-Labour voters is as much a question of a emotional as intellectual dialogue. We have to create an emotional identification between our hopes and dreams and the aspirations of our target voter.

It won’t surprise anybody to hear I agree whole-heartedly with that argument but it might interest them to know why I feel the only route for people who share the same concerns as Daniel and me is to oppose this government totally and support the Liberal Democrats.

Taxing Times:

Much has already been written in favour of our taxation proposals and I don’t intend to go over old ground but instead of looking at our proposals let’s look at the government’s proposals. Much fuss and bluster is made about the new 50p rate but little is said about the 0.5% hike in National Insurance Contributions. This is a real tax on wealth creation (as opposed to a tax on already existing income a fair portion of which will not flow back into the system); when the economy contracts people lose their jobs and when it is growing more people are employed. However, when people are employed they spend more and thus more people need to be employed; it thus makes sense that the motor force of any economic recovery is not only keeping people in work but making sure they are able to stay there. Why, then, has this government to levy a punitive tax increase on both employees and employers?

In reality, the rise in NIC’s is as bad as the now infamous 10p tax blunder. A mistake which cost the Exchequer a fair amount of money in itself it might be added and it is a mistake which will cost the British economy dear; and, of course, it is a hike that will hit the lowest earners hardest as even more of their income is taken by the taxman (not to mention the downward pressure on wages that will result). Here we see the ineptitude of the government in full flush as it desperately tries to claw back the money it has spent any which way it can. So, all the good work which was done in regards to introducing a minimum wage is undone virtually in one fell swoop.

Purchasing Problems

We all know where most of that money was spent; on slinging a life buoy to the floundering banking system. However, Labour has refused to take control of the banks outright; call me old fashioned but when I buy something I expect ownership to pass to me. No doubt this was borne of an inbred timidity, a determination that no matter what ‘Old Labour’ shouldn’t be seen as being steering the ship. It however has proved to be disastrously misguided as the banks have taken the money with a Thank You Very Much and used it to write-off the bad debt that they created in the first place or else fund exorbitant pension deals for people who could barely be said to have earned them. We were rightly told that the financial sector needed to function and be saved to lessen the damage on the wider economy but instead of acting in the interests of wider society acted to prop up a system that had already failed; badly and rewarded the people who steered the ship onto the ice

Interest rates have come down so surely that will reduce debt problems? Not if you happen to have a credit card from the Royal Bank of Scotland group as they now charge a whopping 16.9% interest rate on it’s credit card. Remember, this is a company that we allegedly own a 58% stake of; so, as you can see we really got value for money there.

Education, Education, Education

One of the key facilitators of actual movement and social mobility is education and the start and here we see an awful lot of problems with the government’s approach. Tuition fees remain regardless of ability to actually pay them back, so a student who I know personally but shall remain nameless whose family is likely to pay back their fees is treated the same as somebody who will come out of University, struggle to find a job in the current climate, and will thus be saddled with debt from the start (and thus incidentally will be able to contribute less economically).

So, instead of helping those who start from behind the race run with the pack we are saddling all the runners with a lead-filled backpack and those that are ahead stay ahead albeit moving at a slower pace. One of the great boasts of this government is that it would eradicate child poverty and yet again it is a headline-grabbing measure which sounds amazingly like social justice but actually falls well short on delivery, this is because the government is obsessed with the stats and doesn’t watch the ball when it comes to real social movement and prospects.

In terms of boosting families the government would doubtless point to the recent boosts in tax credits and the much-touted Child Trust Fund. However, in terms of how much of this additional money will be seen we are again faced with a question of delivery. Also, with specific regard to the Child Trust Fund we again have a measure which is scattergun. If this government had been inventive then it could have offered large tax breaks to higher incomes providing for their children, paying into a ring-fenced fund and actually given more money to people who need it. The lack of targeting is why these measures make barely a dint in the numbers of children actually in poverty and 3 million children remain so.

Envionmentally Toxic

We all know that the recent Budget provided a paltry £100 million for the eco-towns project and to be totally fair there probably isn’t the money available to invest in renewable energy there was all those years back but the reality is that change has been so piecemeal that this can go on the charge- sheet.

Obsessed as always with targets over delivery the government has enshrined climate change targets into law; however, this is an area where we need to keep our own party honest. The ‘Green Tax Switch’ seems to have mysteriously vanished off of the Liberal Democrat radar. Measures such as a windfall tax on energy companies to cut energy bills are socially redistributive and ones we should champion vigorously.

One aspect of this which may have to be placed on hold is any form of punitive taxation on fuel duties which are not viable and of questionable social justice value until the public transport infrastructure is much better than it currently is; however, this is an area where incrementally changes can be made.

Conclusion

Labour’s problem historically has been to assume it can sustain it’s base in it’s current place and that this is ‘left-wing’ where as true progress demands much more than 50p tax bands. It demands that while some people pay more; others pay less. It demands that the government is truly opening doors for people to advance (this is something Margaret Thatcher realised well-enough when she captured the votes of those Labour voters who aspired to better and didn’t merely wish to be maintained in their current state). To make an uneven surface level some parts have to be flattened and some elevated. The state is in a unique position to truly level playing fields and actually enable people to advance and it is right that this power is used where necessary but only if the state then steps back and provides the space (as well as the guide ropes) needed for people to flourish. Socialism in it’s statist ossification of society is a failure because state’s cannot take the place of the people in a system of government where the state merely represents the people and even then it barely does that.

A government truly committed to Labour’s foundation values should be opening those doors; not slamming them shut like this Labour government is. It is my contention that although we may disagree with individual policy aspects the Liberal Democrats are actually the true standard bearers of progress as Nick Clegg said not so long ago.

By Darrell Goodliffe

Posted in blog archive, Uncategorized
One comment on “Labour’s Love lost
  1. David Weber says:

    Darrell,

    Student loans are essentially deferred taxation. So being “saddled with debt” isn’t actually the prohibiting factor to people on lower incomes going into HE that you claim.

    I dislike tuition fees – who actually asks for them – but as someone on the full maintenance grant I do feel qualified to make some comment about the argument that tuition fees create an exclusive disincentive to poorer students.

    They don’t. They create a disincentive towards every student. Every student, regardless of whether they’re high, low or middle income will either be faced with more up-front costs, or more taxation later on. Middle earners will pay back more in tax than lower earners later on, because they’ll be earning more. So though tuition fees undeniably leave an unpleasant taste in one’s mouth and are a negative consideration when looking at Higher Education, they are not the barrier to social mobility you seem to suggest they are.

    Dave

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