Fight on the Economy

In an election any time soon, Brexit will be the central issue. The whole election could be polarized around this, and the Tories will also want to try and mobilize their base around social issues — particularly crime. But with the rank injustices of our society so clear, we should be confident about getting them onto terrain often thought to be their strongest: the economy. We can turn this supposed strength into their biggest weakness.

In 2017, we had a relatively simple plan to achieve this. Its major planks were, first, close down the issue of supposed Labour tax rises by promising that those earning less than £80,000 a year would face no increases in income tax, National Insurance, or standard rate VAT. And let’s be quite clear about this: after nearly a decade of falling real wages under the Tories, we simply cannot turn around to most people and suggest they will have to also pay more taxes. Instead, we would ask those who make more than £80,000 — the top 5 percent — and major corporations to pay for our spending plans; this provided an immediate doorstep answer to the question of “how will you pay for it?”

Second, promise and plan a massive increase in public spending, including £250 billion of investment, and the expansion of existing public services, centered on the idea of universal, free provision. The flagship policy was free university education; the Tories, in a panic after election day, tried to claim (rather bizarrely) that this was a bribe to younger voters.

In reality it represents something far bigger: opening up the idea of education being a right, not a commodity or a privilege, for all to enjoy; of a society where not everything precious is offered for sale; and of a government that is committed to this way of thinking. It acted, in other words, like a calling card: it was a clear, simple policy that told you straight away what a government under Jeremy Corbyn was going to be like. His government would mean ending austerity, decisively. Today, it has helped open up the debate around “Universal Basic Services” — making sure everyone has access to the essentials of life.

Third, we planned to herald the end of neoliberalism by forcing open the question of ownership of major productive assets. We would reverse the historic errors of the 1980s and 1990s by bringing key industries — ones that should never, in a sane world, have been privatized — back into public ownership. It was obvious for years that this would be popular, but it took the bold statement of the manifesto to make that popularity unavoidable.

These planks formed the core of the offer on the economy and, looking at the results, it’s sorely tempting for all of us to simply photocopy the 2017 manifesto for this time round — it was a triumph that shifted, decisively, the course of British political history. But we know the Tories are wise to this: their leadership know how they can beat us on a repeat of 2017. They’ve made no secret of this. Neither Boris Johnson nor his consigliere, Dominic Cummings, have any great ideological compunctions about spending cash if they have to, and they’ll attempt it if they think it’ll shoot Labour’s fox.

Cummings, in particular, is a determined enemy of what he sees as Whitehall conservatism, and does not share the Treasury’s austerity fetish. The new Tory leadership will have some problems trying to deliver on spending increases, of course. The fact that the Tory party at large, including shadow cabinet members, are basically ideological opponents of state spending increases may well stay their hand. The deeper structures of British capitalism, particularly its dependence on financial services, weigh against spending increases.

As a result, we’ll no doubt see yet more recycled cash and ropy figures presented as new money, as we have already on the National Health Service (NHS) spending announcement. And we know that their promised increases to spending are on the back of years of Tory cuts to the same services. It’s essential for Labour to hammer these points home.

But this can only be a first step. It can only be a first step because it’s defensive: it means the fight has been taken onto the Tories’ turf, leaving us to chase after them, explaining why they are wrong. As Ronald Reagan once said, “If you’re explaining, you’re losing.” Johnson and Cummings will be quite happy for us to chase around after their hokey announcements pointing out the obvious deficiencies — or for us to be left in the lurch by any real spending increases they can make. If this happens, it means they are setting the agenda, and we will be lagging.

Setting the Agenda

Instead, just as we did in 2017, Labour must determine the economic agenda. We want Tories chasing around after us and our announcements — just as they had to two years ago. So that means taking the 2017 manifesto as our starting point, and looking to build on it. Of course we’re going to end austerity. Of course we’re going to nationalize water, rail, and the rest. This is just political common sense now: the entire political terrain has moved.

That common sense should, of course, include some bold new policies on how we will end austerity. Labour’s existing plans for how it will manage the public finances create huge opportunities. We have £250 billion to invest through the National Transformation Fund, earmarked for capital spending like transport, buildings, and scientific research. We should be using that pot to go up and down the country to the places that haven’t seen real investment for forty years or more, and talk through how it will make a difference.

It’s a big enough sum to overhaul the economic geography of Britain to the benefit of working people. That’s how we should be thinking about it; but let’s also work on telling people what it can mean in their area, from secure new jobs to ending the disgrace of our clapped-out trains in the North. Everywhere can be a part of the big picture. That means offering clear, specific proposals for key constituencies on what this investment spending will mean for them.

Our fiscal planning was sufficiently tight last time that even the (small-c) conservative Institute of Fiscal Studies estimated we had £21 billion of additional funding for day-to-day spending on things like benefits. If the Tories are going to try and make wild promises about spending, without bothering to show how they will pay for any of it, let’s counterpose them by making serious offers, inside our fiscal framework. Let’s start to use that cash to show how we will reverse benefits cuts and introduce Universal Basic Services.

But this won’t be enough. The Tories will be expecting us to spend more and have planned for it — you can see in the flurry of spending announcements they are already making. We need to open new fronts against the government: ones where they are forced onto our terrain. We need to find places where they will find it either difficult to respond, or where we know their response is easily dealt with.

Climate Change

Fortunately, Labour’s program already has two we can build on. The first is climate change. We need to address the civilization-scale threat climate change represents: first, because we simply have no choice — climate change is a real “do or die” situation; second, because with 85 percent of the public saying they are concerned by what is happening to our planet, we absolutely have to show we have a serious, workable plan to address it. That’s started to happen over the last year or more, with new announcements from the shadow cabinet and big new policies on offer.

But we can go further, and we must. The government’s own legal target now is to reduce carbon emissions to net zero by 2050. This has to be considered a bare minimum for the United Kingdom: yes, it technically matches our international commitments for emissions reductions; no, it does not mean we as a country will be setting any sort of global lead on the issue — and, as the country of the Industrial Revolution, we surely should be doing so.

We can’t be urging developing countries to do more when doing only the minimum ourselves, after 200 years of enjoying the benefits of industrialism. Post-Brexit, Britain needs to define its role in the world. This is how we should do it. Net zero emissions by 2030, as Labour for a Green New Deal are pushing towards, is where we need to get to.

That target would mean an overhaul of how our economy functions. It would mean new jobs and new ways of working: so, when Bernie Sanders promises $16 trillion in funding for his own Green New Deal, and 20 million jobs, why should we stop at only 400,000 new jobs?

Let’s put the effort in to develop a plan for at least one million climate jobs. We know it’s technically feasible — the Campaign Against Climate Change developed a plan to achieve this target five years ago. The Green Alliance has done detailed work on how moving to a “circular economy” (making goods that last and recycling by default) could create hundreds of thousands of jobs in manufacturing and repair.

Politically, one million jobs are enough to say to every person in every single part of the country that Labour will be creating climate jobs in their community. It’s big enough to count. It would mean every single place having a real stake in the Green Industrial Revolution. We should be looking at a ten-year program of investment — from public and private sectors — to transform the economy on a low-carbon basis, and make sure our fiscal rule fits this. John McDonnell’s announcement of a green overhaul of our finance system is a central part of this program.

And since we know reductions in working time have dramatic impacts on the environment, for instance in reducing emissions from commuting, we should be looking to show how we will cut working time with no loss of pay. Far from being an eccentric idea favored only by London intellectuals, trade unions like CWU now have solid policy on looking for reductions in working time, a discussion which is increasingly coming into union bargaining rounds.

Companies across Britain are starting to implement reductions in working time. And it’s very popular in polling, with 57 percent now supporting a four-day week. Official statistics suggest over ten million people currently employed would work fewer hours if they could. Labour should build on the initiative of Lord Skidelsky’s review and start to develop the credible, costed proposals for general reductions in working time without loss of pay — making automation work for people, not against them.

The Tories do have a message on the environment. It’s one they’ve been plugging away at since mid-2017, with Michael Gove as environment secretary. It builds on the work of the Tory think tank Bright Blue, whose polling showed how popular environmental issues were, particularly for the young. Their approach stresses the need for conservation ahead of the systemic and economic challenges, particularly climate change. This is why the Tories have gone all-in on plastic straws, and chase after David Attenborough’s viewers on Twitter.

They don’t, however, want to address the systemic challenges because, fundamentally, they are Tories and they believe the system should carry on much as it is. The result is that you find the prime minister stating his concern for the loss of the Amazon solely in terms of biodiversity loss. This is a weak spot for them: electorally, we need to look like we have the big answers to the biggest single-issue humanity faces today, because they have not. Labour’s made a great start, now let’s raise our sights.

Ownership

The second strategic weak spot for the Tories is around what has been called the ownership agenda. The question of ownership is central to Labour’s new economic thinking. As Mat Lawrence from Common Wealth has written, the two governments since the Second World War that truly transformed the economy focused on changes in ownership. Under Clement Attlee in 1945, 20 percent of the economy was moved into public ownership; under Margaret Thatcher in 1979, that achievement was reversed via privatization.

We want to go further: a fundamental transfer of wealth and power in favor of working people, their families, and their communities. That will mean transferring privatized assets back to the public sector — under democratic management, with workers and consumers having their say.

But it will also mean going beyond this point and starting to place the wealth of our society under common, democratic, and decentralized forms of ownership. It means local governments owning renewable generators; or community-owned solar generation; or worker-owned firms; or platform cooperatives, like a “People’s Uber,” owned and managed by the drivers.

In short, it means the transformation of the entire economy to the benefit of the great majority — not only by taxing the rich to pay for our public services; not only by investing to rebuild those places battered by forty years of neoliberalism; but also by giving people a real, shared stake in our economy.

There’s been a growing excitement about the possibilities amongst activists and Labour members, and veritable intellectual ferment in developing analysis and policies. But it’s not quite yet filtering through into day-to-day political discourse. To make this happen means developing a language and a rhetoric around the ownership agenda — so that, for instance, we don’t have to call it “the ownership agenda.”

It’s right that the Preston Model has become a benchmark for activists, for Labour councils, and for what you might call the policy-curious. Likewise with community wealth building and, increasingly, the Inclusive Ownership Funds (IOFs). But let’s face it: none of these are phrases that yet trip off the tongue for all those we have to convince to vote Labour next time out — and, to be honest, I’m not sure I would ever expect this wonkish language to work in that way.

But if we can put together a language that people can get hold of, and combine it with clear, practical demonstrations of what Labour’s ownership plans will mean to them, their families, and their communities, we can start to seriously shift the debate onto terrain where the Tories will never dare challenge us.

The IOFs are key to this. The Tories might, like they did under Theresa May, have a bit of flap about putting workers on company boards. They might introduce, as George Osborne did, tax breaks for employee ownership. But they will never actively go out and transfer shares of the ownership of major companies into the hands of their workers.

Ownership isn’t an abstract thing. It has real, material consequences. Thatcher didn’t just break up the public housing stock in this country through Right to Buy. By offering council tenants their homes at a discount, she gave people a real, material stake in changing ownership. (And then, by refusing to let councils reinvest the proceeds in building more stock, she undermined the principle of mass council housing itself, thus paving the way for today’s housing crisis.)

The IOFs mirror Thatcher’s scheme by steadily transferring ownership of major companies into the hands of their workers. Every year, 1 percent of the largest companies will be transferred into a pot, owned collectively by every worker in that company.

It is a shift towards a form of decentralized collective ownership, and is intended to help fundamentally alter the basis on which the economy in Britain operates. And because these workers will hold the shares, not only will they (like any other shareholder) begin to set how the company operates, they’ll also receive dividends. In other words, the IOFs create a real, material stake and incentive in seeing the transfer take place.

At present, the dividends available each year are capped at £500 — which, after years of falling real wages, would make a massive difference. It’s a big chunk of a family holiday paid for, for example. This matters. But if we really want to get the Tories on the run — and we do — let’s look at raising that cap to (say) £1,000 or £2,000. Johnson and Cummings won’t be able to touch that. They won’t dare to insist that the biggest companies hand over shares to their own workers. They can wheedle, and cajole, and offer bribes. But they won’t insist.

The IOFs are the cutting edge of our transformational program for the British economy — and they can be a vote-winner. But let’s get the language we want to use to cover this, and the rest of the ownership agenda. “Right to Own” has an appealing ring to my ears, but let’s do the legwork of finding out what works with people, and do it quickly.

This is a hugely ambitious program: end austerity, invest everywhere; deliver a million green jobs for a Green Industrial Revolution; put wealth and power back in the hands of ordinary people. But the next election won’t be won with anything less.