The cost of living crisis has tested the Tory economic model to destruction – driving families into fuel and food poverty, hiking the cost of rents and mortgages while cutting real wages.
Now, in an act of madness, Liz Truss has punched a £72 billion hole in Britain’s finances. Her new chancellor Jeremy Hunt is coming for big public spending cuts just to plug the gap.
So this is an emergency. There’s already pressure on Labour to rein in its spending plans.
In a period of turmoil, with Putin using energy prices to destabilise our democracy and the Tories in chaos, Labour will certainly need to stabilise government finances.
So, on top of the proposals Labour has already announced, I want to see us produce draft legislation to close tax loopholes worth £157 billion a year, in order to spend the extra money on revolutionising health, social care, local councils, defence and the green transition.
We need, on principle, to start taxing wealth as well as incomes, and adopt the steeply progressive tax principles of the successful post-war Labour governments.
We need to promote redistribution through every channel: rising real wages, universal basic services, making the essentials like transport and social care cheap or free; reform welfare and the tax system to create the beginnings of a basic income scheme; and invest massively in social mobility, through skills, education and training – with targeted support for the poorest towns and communities.
To do this, there’s no avoiding it: the share of wages in the economy will have to rise and the share of profits will have to fall. To reduce Britain’s reliance on foreign investors, who can pull the plug on any government they don’t like, we need to stop exporting wealth and start investing in the wellbeing of our communities.
We need to reform the everyday economy to make work for those who work in care, retail, construction and maintainance secure, rewarding and productive – not simply because it’s the right thing to do but because it’s the only way to boost growth.
And we need to remove the special interests, cronies and lobbying companies from the machinery of government, at council, regional and national level.
With the Tories plunging communities into fear and hoplesness, we don’t just need to win an election. Like the Attlee government of 1945, we need to establish a new consensus: for an economic model that puts people and planet before the interests of speculative finance and the fossil-fuel lobby.
That’s why we need to win big – so that whatever crawls out of the wreckage of the current Tory party can never again inflict the misery and hopelessness on working class people.
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