What Labour needs after UKIP

Thursday’s elections were about 4 things – distaste for the conventional political classes combined with immigration, Europe and welfare. Nothing of course to do with local elections which they actually were.

UKIP is certainly flavour of the moment, but talk about the birth of permanent 4-party politics is almost certainly exaggerated. This is still the mid-term arena in which fancy thinking can be indulged in and it’s also the middle of the worst economic crisis for a century which has been appallingly mishandled, so understandably people are cynical, bewildered and angry.

But whether that mood persists till the next election when UKIP policies (or rather non-policies or whatever-you-want policies) are relentlessly dissected and when serious decisions have to be taken about the long-term future of the country, is quite another matter. The elections do however pose a significant problem for Labour.

The problem is: what does Labour stand for? It has rightly discarded New Labour neoliberalism, but not yet put anything resonant in its place. In one sense there are a lot of policies there already.

Labour has already promised to repeal the NHS Bill, build 125,000+ homes and regulate private rents, promote a Living Wage for public sector workers and shame the private sector into following that lead, offer a minimum 33-40% cut in tuition fees, limit rail fare increases to 1%, re-ompose the 50p rate of income tax for the super-rich, impose a mansion tax on the rich, repeat the bankers’ bonus tax, reverse the bedroom tax, scrap Workfare and replace it with a ‘compulsory’ Hobs Guarantee, offer a VAT cut or a ‘temporary’ VAT holiday, implement the High Pay Commission report in its entirety, scrap Ofgem and bring in proper energy price regulation, break up the banks and set up a National Investment Bank, and support mining communities and clean coal technology. That’s quite a list, but it doesn’t cut the ice it should.

What is missing is not more policy, but two or three key exciting ideas which really resonate with the public and set the pulse racing a bit. I would suggest three which are inter-connected.

The first is: we will end austerity. Endless cuts have not only failed but are now clearly counter-productive – they have driven the country into semi-permanent stagnation and the deficit is actually growing. Instead of cutting spending, we will grow the income, kickstarting the economy by investing to put a million people back to work within two years. How will it be funded?

Point 2 is: without any increase in public borrowing whatever, we will tax the hyper-rich. In the last 4 years alone after the crash, the 1,000 richest Britons (those with wealth over £80m, just 0.003% of the adulot population) have increased their wealth by £190 billion.

If this were made subject to capital gains tax, it should yield £53bn, more than enough to get the country back on its feet. Third, the biggest social problem in Britain today is lack of social housing. We should commit to build 50,000 affordable houses in the first year, 75,000 in the second, and 100,000 in the third and thereafter.