Author Archives: Kevin Langford

Kevin has been a party member since June 2017, from Kingston

We should not oppose some stealth taxes

The autumn statement on 17th November will probably provide reassurance for the markets, but bad news in other respects.  We don’t yet know how the unpleasant ‘medicine’ will be mixed, but it will include higher taxes (including stealth tax rises through long term freezes to personal allowances), cuts to services and to government investment, and real terms cuts to some welfare payments.

Elements of our response to the forthcoming statement are easy.  1 The Tories got us into this mess through the Truss shambles, through Brexit, and through the lack of policies to build a decent economy over many years of poor stewardship.  2 We don’t want cuts to services and to welfare.  3 We should increase levies on companies which have happened to have benefitted from the war in Ukraine.  But when it comes to any tax rises that may be proposed in the statement, we need to think carefully.  We need to balance the short term expediency of pointing out everything the government is doing which could be unpopular, against longer term considerations of how to deliver a better society.

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Updating our policies on the climate emergency; the new Tories are also dangerous here

Unfortunately Truss hasn’t yet U-turned on the Tories’ post-Boris backsliding on climate change.  Kwarteng has left the treasury, but we still have Rees Mogg in charge of  BEIS, a secretary for international trade who thinks our net zero commitment is an arbitrary form of unilateral economic disarmament, and a governing party with increasing links with the fossil fuel lobby – including the Global Warming Policy Foundation.

This is frightening – and we need to dial up our focus on the climate emergency.

We agreed a good set of policies on the climate crisis in 2019This does a good job of bringing together the many aspects of the climate emergency, and setting out key priorities.

But a lot has happened since 2019! While the fundamental environmental challenge remains, the economic and political context is different. The wholesale price of gas has increased by 5-10x, and, unless the Ukraine war ends, this is likely to continue until at least 2025. Circumstance and government incompetence has made us all poorer. And after Brexit and the shambles on the economy, attacking net zero may be the Tories’ next trick.    

In that context here are some thoughts to amplify, update, and build on our 2019 work:

Support for insulation and energy efficiency. The costs of having a poorly insulated home have just sky rocketed.  If the state is going to protect people from this (as I believe it should) then reducing how much energy people use is better investment of public money than subsidising the cost of the energy.

Stamp Duty; there should be no stamp duty on houses EPC B and above. If someone buys a house and gets it to EPC B within 12 months they should be able to reclaim the stamp duty. Stamp duty is a bad and unpopular way of taxing property anyway and needs replacing long term. This will phase it out in a way which provides a substantial incentive to increase energy efficiency. 

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Politics of Growth: Bring it on

The best answer to Liz Truss’s assertion that the Liberal Democrats (among others) are in some way ‘anti-growth’ is the truth; our growth policies are better than hers. Fairer, more popular, and more likely to work.

Consider these five points:

  1. The most fundamental consideration for investment and growth is a stable macro-economic backdrop. Truss and Kwarteng could not have crafted a better way of sabotaging the UK’s reputation as a place for investment to thrive. The likelihood of the Tories being out of government may now in itself lead to more positive business sentiment and a more positive outlook for growth.
  2. We back working with our main trading partners in Europe rather than antagonizing them. Joining the single market is near the top of most economists’ lists of actions which would increase the UK’s rate of growth.
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Sorting out the mess

The country already had big issues to deal with before last Friday: price increases that are severely reducing the standard of living for many, a health service which is struggling to cope, climate change which is becoming more visible, and a  war in the Ukraine.

To this the government has added a completely unnecessary financial crisis. Another major unforced error following on from Brexit.

The best thing we can do to help sort out the mess is to get elected and to contribute in some form or other to a sensible and effective government. In this respect at least, the last week has moved us forward.

First, the Tories are making it easier for us to evict them (if more difficult to deal with the chaos once they have gone). They are backing policies that are both wrong and unpopular. Tax cuts for the rich. Incompetent economic management. Refusing to implement a windfall tax. Fracking. (Winchester, Wells, Lewes, Guildford and Esher are all interesting seats with fracking licences within the constituency or its hinterland)

Second, Labour is adopting reasonable political positions and has not yet messed up.  It would be naïve to assume that the Tories will lose (or that we will make significant progress) in the absence of a decent showing from Labour.  So it is therefore to be welcomed that hey had a largely successful conference this week on an electoral platform with many similarities to ours. There are obviously areas where policy is different, but there is a very large core we agree on. Look at the ‘pre manifesto’ prepared for our conference (Policy paper 149)  and Labour’s conference road map to a ‘Fairer, Greener, Future” and ask how much difference a neutral observer would see.  Conversely consider the clear water between what both parties are now saying compared to the Tories.  We know where we all stand.  (Labour members even voted in favour of PR – though it seems unlikely that this will be adopted by Starmer any time soon.)

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Towards a Fairer Society: Universal Basic Income vs Guaranteed Basic Income

The country faces an immediate cost of living crisis – requiring drastic action. This needs short term measures which can be funded through taxes on the additional short term profits of energy companies or through increase in debt. Measures which wouldn’t be sustainable long term but are needed to address today’s issues.

But we also need a long term strategy to make our unfair society better, and in particular, to reduce levels of poverty which pre-existed the current crisis. The conference paper and the debate on a Fairer Society address this. The paper covers policies which will make society fairer including lifelong employment support, more power to local communities and better workforce protections.

But in one specific area the paper offers a choice – and conference will vote between two ambitious long term proposals to end poverty – a Universal Basic Income (“UBI”), and a Guaranteed Basic Income (“GBI”).

(There is also a third option which reserves judgement until both of these have been fully tested over a number of years.)

The UBI proposal scraps income tax and national insurance personal allowances for everyone of working age, so that we all pay tax and national insurance on the first pound that we receive. That costs anyone currently paying tax £78 a week. The proposal also introduces a new payment to all working age adults of £78 (the ‘Universal Basic Income”) – so if you were previously paying tax you end up in the same place as before, but if you aren’t earning enough to pay tax, you are better off.  The current benefits system is retained but the UBI is treated as ‘income’ under it – so that benefits are reduced; someone on Universal Credit would typically see a net benefit of £35 a week.  This way of delivering UBI is the output of two years of development by working groups – on which I served – and is very similar to proposals by some of the leading think tanks advocating UBI.

The GBI proposal is more directly targeted on ensuring everyone has a decent minimum standard of living. It establishes a commitment over time to get all households to a certain income level, and uses a reformed version of the existing benefits system to steadily increase the amount of this ‘guaranteed base’. An independent commission is set up to hold the government to account in terms of setting the right level over time – in much the same way as has been successfully done with the minimum wage.

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GDP share; a more timely and effective alternative to Universal Basic Income

That’s your bloody GDP. It is not ours’. Thus a Brexit supporter expressed their detachment from the national economy in 2016.

This proposal addresses both the perception and reality behind this comment. It provides poorer households with a bigger share of GDP, achieving a more deliverable redistribution of income than a Universal Basic Income. It makes more people feel that this is ‘our GDP’. It also steers the national conversation about growth towards ‘net zero’.

UBI and its problems

A conference motion calls for the party to campaign for UBI.

But the practicalities mean we are doomed to deliver a very small and disappointing version of a very big and (somewhat) controversial idea. The UBI promise of a reasonable income for everyone is not achievable. Recent work by sympathetic academics has shown how far we can (and can’t) get. Even if we raise higher rate taxes a lot and get rid of personal allowances (so that for most people there is no net benefit) to fund a UBI, we cannot sustainably pay a UBI of much more than £3000. At this level, many poor people would lose out unless all or most current means-tested benefits stay in place – thus forgoing one of the significant supposed advantages of UBI. And even to get to £3000, we would likely have deployed the money from all of our tax-raising ideas on this one concept cutting out anything else we might want to do.

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Defining and measuring strategic objectives for the party

I wrote a piece here two weeks ago discussing the need for long term strategic objectives that would be consistent for 10-20 years and would, alongside our values, guide our decision making and enable us to develop a more focussed disciplined organisation. Knowing what our objectives were, and sticking to them over time would also enable us to rebuild a clear positive public identity for the party – in itself something key to long term electoral success and survival. And as others have commented, more important in the leadership election than the choice of specific policies.

The response to the piece might be summarised as “Yes this would be fantastic, but no it’s not really achievable”.  In particular there was scepticism about whether it was possible to move from rather general objectives (5 of which I suggested in my piece) to objectives with enough clarity and measurability to deliver the promise of focus, effectiveness and a long term electoral identity for the party.

This is one step towards showing that this challenge may be answerable. I have taken the five general objectives I set out (relating to climate change, fairness, education, the quality of political discourse, and the UK’s relationship to the world), given them a little more definition where necessary, and proposed how we might measure progress against them (say when we are looking back on the previous 15 years in 2035).  

Let’s start with the objective in relation to climate change – because this is the easiest to define (if not to deliver!)

“Promote /stick to the path to net zero for the UK (by 2045) and the world”

This is as clear as one could reasonably expect. It is not perfect (eg there are important debates about what exactly net zero means for the UK) but it is good enough for long term orientation. It is a long term objective which is not going to go away and needs sustained focus. It is not something we expect the current government to deliver without continual challenge and pressure from us and others. It is measurable.

Can we provide a similar level of clarity for my other proposed candidates for strategic objectives?

Consider fairness.

“Make the UK fairer” is a good general objective – in that it conveys crisply an important priority for our party, which many people will buy into. But it needs small print. Of the many things this might mean I suggest that in 2035 we should be asking ourselves as a party what we have done to;

  1. Reduce the number of people in poverty by 25% – this needs an agreed measure of poverty – of which there are many (a further blog by someone with more specialist knowledge!) and;
  2. Increase the number of those born into low income families who, later in life, are in the top half of the income distribution.

My third proposed objective was “to create one of the best and most inclusive education systems in the world”.

How would we know in our hypothetical 2035 review if we had done this or were moving towards it?

  1. Our schools would be performing well in an international context –eg as measured by the OECD;
  2. The proportion of working aged people who have achieved good further education, apprenticeship or university qualifications would have risen;
  3. We would have at least retained our current high proportion of globally top ranked universities.

Fourthly I proposed we should aim “to keep the political debate in the UK open, honest and fact based”.

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Leadership candidates could and should set out what they mean by UBI

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Universal Basic Income (UBI) has many attractions as a policy. It is radical, an easy concept to explain and – depending how it is implemented – may be progressive.

Both our leadership candidates are backing it. Neither has been as specific as they could and should be about what they are proposing. There is enough economic analysis available for it to be perfectly feasible for them both to be more specific.

The fundamental question is whether we can afford a level of UBI which is worth having and does not create lots of losers, particularly at the bottom end of the income distribution if means tested benefits are withdrawn or modified.

On the economics, our candidates refer mainly to analysis completed by Compass, a think tank promoting UBI.  This is the most detailed recent economic work that is publicly available on a UBI for the UK.  The work has some gaps (which it acknowledges) but it does us a big service by showing the relationships between costs and benefits, and by considering properly how different income groups are affected.

It is not honest to say blandly that the Compass analysis shows that ‘UBI works’.  But it does show what the constraints are, and means our candidates could say more precisely what they are proposing.

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Strategic objectives June 2020

Our election review concluded – we lacked vision, relevance and strategy in 2019. In this context, I want to return to Michael Kitching’s piece (“However beautiful the strategy you should occasionally look at the results” – Op-Eds April 25th). He makes several important points arguing that we need a greater focus on delivery and more effectiveness in execution. But most importantly, he argues for clear long term strategic objectives. As he points out, a framework for allocating resources to constituencies is not a strategic objective; it is tactics. Stopping Brexit was not a long term strategic objective for the party; it was a policy (albeit a good and extremely important one) with a limited shelf life.

Our key strategic objectives need to be consistent for 10- 20 years. They, alongside our values, structure and guide all decision making. They cannot be given up because someone else moves onto the territory. They should not be the kind of objective which becomes outdated either because no-one any longer wants it, or because it relates to something that has already happened.

Posted in News and Op-eds | 21 Comments

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