Labour MP Jon Trickett: “A Divided Movement Will Not Win the Next Election”

Jon Trickett

Labour MP Jon Trickett speaks to Jacobin about leader Keir Starmer’s triangulation on the corporation tax and the need for the Labour Party to advance a bold, activist agenda in the pandemic era.

British Labour MP Jon Trickett speaks to the media in London on May 11, 2017. (Chris J Ratcliffe / AFP via Getty Images)

Interview by
Luke Savage

Much has changed in the Labour Party since the devastating electoral defeat it experienced in December 2019. With almost a year at the helm, its new leader Keir Starmer has veered sharply to the right and distanced himself from many of the policies that helped secure Labour’s historic swing in 2017 — much to the disappointment of many rank-and-file members. This week, as the Tories table a budget that will include an increase in corporation tax, Labour’s leadership has put itself in the odd position of opposing the move despite its popularity across the country.

Having first entered the House of Commons in a 1996 by-election following a stint as leader of Leeds City Council, Jon Trickett was later parliamentary secretary to Gordon Brown and would become the first MP to nominate Jeremy Corbyn in Labour’s 2015 leadership election. Representing the Northern constituency of Hemsworth, he has continued to make the case for an ambitious socialist alternative and has helped author several analyses of Labour’s election defeat and what must come next for Britain’s left.

In part one of a two-part conversation, Jacobin’s Luke Savage spoke to Trickett about Boris Johnson’s budget, the politics of corporate taxation, and the need for Labour to embrace a bold alternative. The conversation has been edited for length and clarity.

Luke Savage

The Labour Party’s new leadership is set to mark its one year at the helm, and I think it would be fairly safe to say that it’s taken things in a different direction than many expected.

Many of the party’s positions have shifted considerably from those of the previous leadership. Boris Johnson’s government, for example, is about to table an increase in the corporation tax — a move which Keir Starmer and Labour’s current front bench are, astonishingly, opposing (though there has been some talk Labour could back a gradual increase in the corporation tax). Politically speaking, it’s a difficult posture to understand: many large companies have enjoyed huge windfalls during the pandemic, and the British public overwhelmingly backs a rise in the corporation tax.

What do you make of the Labour leadership’s position and the argument that “now is not the time for tax rises”?

Jon Trickett

When Keir became leader of the Labour Party, we had just suffered a pretty catastrophic defeat, and we then went straight into the COVID crisis. So it’s posing a great and complex series of challenges for the party and the leadership. I give them that — this is not an easy situation to find your way through. When you lose an election, there are several phases you need to go through — some of them consecutively, but quite a few of them concurrently. You need, I suppose, a moment of sorrow and sadness that you weren’t able to serve the country to do what you think is right. More importantly, there needs to be a time of reflection to see what was done right, what was done wrong, why we lost, and then to become an effective opposition — to show that you can change the government and finally to become an alternative government that’s ready to take over.

Now, it depends exactly what your analysis is of why we lost. It seems to me that that determines the character of the opposition, which is then proposed, and then the kind of government which you would intend to be. If, for example, you come to the conclusion that we lost because our policies weren’t popular, then I guess you’re going to change the policies. I think it would be dishonest to argue that every single policy was just automatically the right one.

But it wasn’t the case, and it isn’t the case, that our policies were so unpopular they led us to an election defeat (only in one area, I would argue, and maybe a second one to some extent). We lost principally because of the problem we had reconciling the different voters who were part of Labour’s natural base historically who voted in different ways on Brexit.

Let me come to your question about corporation tax. It’s not clear to me, and I can’t see any polling which shows that the British public voted for the Conservatives purely on the grounds that they were more sympathetic to big business than the Jeremy Corbyn leadership was. And there’s lots of polling which actually says that some of the practices that businesses have adopted were particularly unpopular — employment practices, short-time working, temporary jobs, low pay — all of these are deeply unpopular with the British people, it seems to me, across the spectrum. That’s just where we are, and, of course, it lends itself well to a left narrative.

What’s striking is something which Boris Johnson said. Remember: the division in British politics between Labour and the Tories historically was largely that Labour wanted to be associated with people who work for a living (sometimes in quite poor conditions) on the one hand, and wealthier people and big business, which went for the Tories, on the other. That’s very crude, but that’s roughly how it was. But what did the prime minister say? Well, he said something which you’re not about to print because your magazine is too sophisticated to say “fuck business,” but that is what Johnson said. Now, I don’t believe anybody in the country really believes that that meant the Tories are against big business. But it showed that he felt that he could get away with it in a political culture which is quite suspicious about big corporations.

Anyway, however, it came about, our leadership decided not long ago that its key watchword would be pro-business. Interestingly, [former Labour leader] Ed Miliband once said he was “pro-business but not business as usual,” and our leadership hasn’t said that. So, when it comes to the budget, which is now coming up, there’s quite a complex set of issues to raise about how you deal with the deficit. I mean, every country is running a deficit because of COVID, and it’s true to say that we’re in deflationary times because the economy is contracting everywhere. So there’s an argument to say that, in the aggregate, you shouldn’t be taking more tax than you are at the present.

But for me, that does not necessarily mean that you can’t play around with the different types of taxation: how it’s raised and how it’s used. The Tories have hinted that, on budget day, they will talk about raising the corporation tax. Now, bear in mind, corporation tax only falls on those companies which have made a profit. And, if you made a loss last year and a profit this year, you can trade off the loss against a profit and pay less tax. So when the Tories hinted that they were in favor of maybe raising corporation tax, our leadership appeared to say that they would vote against it.

I mean, it’s become a slightly different position as the days have gone by. But, from my point of view, that is a serious mistake. In a nutshell, it seems to me that if a company has been making huge profits (say from, I don’t know, supplying pharmaceuticals or doing what Amazon has done), that they should pay tax on the superprofits — remember, a lot of them hardly pay tax at all. But that money shouldn’t be used to pay off the deficit, which then has the consequence that the amount of expenditure in the economy as a whole (aggregate demand, as economists call it) diminishes because that simply adds to the deflationary cycle. So, my view is, yes, there should be a corporation tax on all the big corporations who are making superprofits. But that money should then be used to pump up created activity, industrial and commercial activity.

Many of the big companies that made profits are not putting those profits into further productive capacity. There’s been an increase in the amount of liquidity in the banks. Now let’s just think about that for a minute. The big corporations are making profits and then putting them either into dividends but, quite often, into very large accumulations of liquidity in the banks. So what’s happening is the money is going out of circulation, because it’s just going into the bank and being left there. I think in Britain, there’s nearly a trillion pounds sterling in corporate bank accounts.

If you were to tax that money, it could then be used by the government to create productive activity at a time when about ten million people in Britain are either unemployed, partially employed, or are on furlough. So we’ve made the case over the last forty-eight hours that the multiplier effect of leaving profits with big corporations is actually having a deflationary impact. And if, instead, you put that money into investment, into jobs, and into lower-income families, that will have a positive multiplier effect and will create more economic activity.

Luke Savage

It strikes me, looking at this from the outside, that the economics debate and the wider one about the finer points of the policy is perhaps somewhat secondary to the leadership’s desire to differentiate itself from the previous one. Do you think that’s fair?

Jon Trickett

I think that is fair. I think there’s an attempt to triangulate against the previous leadership, which actually wasn’t actively as anti-business as it might’ve been (however, that’s how they were represented). I think the current leadership has come to the conclusion that it was leftism as such that lost us the election, and therefore they have to give a signal to the voting public that the leftist element — within the party, in the Labour movement, and in the country — is gone or has retrenched and been defeated. That’s what I think is happening in political terms. I’ve seen it before with other leaders. However, it’s not working, is it? Because the polling’s quite clear.

The party, at the moment, is going backward, though again it’s complicated because of the problems with COVID. But, look: a divided party and a divided movement will not win the next election. Instead of picking a battle with a section of the party or with the previous leadership, it would be far better to find unity. I think it’s fairly simple. We should put on our banners the notion that Labour is for full employment — proper work, union jobs, permanent jobs, well-paid on a living wage. That’s the way to drive up the economy to reduce the amount of welfare benefits, to get more tax into the Treasury, and to transform the economy — because it needs to be transformed if, for no other reason, than that we cannot go on with our planet as it is at the present time.

You could actually do all that. It would be a virtuous thing to do in fiscal and environmental terms; clearly, it’s better if the workforce is at work. The thing that I’m most anxious about, and have been for a long time now, is the extent to which working people feel that the British establishment — the same is true in Canada to some extent and certainly in the United States  — has turned its back on hardworking people who are being left to cope with deindustrialization with nobody really listening. Now, full employment would require an active state, an active fiscal policy, and real intervention on a transformative scale. I’m not talking here about tinkering around with capitalism. I’m talking about transforming the way it works from top to bottom. A rupture, really, with the recent past.