If you were to have six asks of the Labour Party to include in their economic policy what would they be?
I am keen to know.
I make absolutely no promises on any consequences arising.
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Warning: these are ambitious:
1) Complete reversal of all real-term cuts to public spending and in particular social security since 2010
2) a large-scale program of public sector housebuilding
3) a programme for transition to a low-carbon economy within 10 years (Green New Deal)
4) pilot for a basic income scheme, aiming at universal rollout within 10 years
5) expanding the range of universal basic services to include free broadband, free local public transport, universal childcare etc. (note that (4) and (5) will supersede (1) to some extent in the medium to longer term)
6) industrial policy to expand public ownership (particularly, but not exclusively, in financial services)
There are many others but these seem like a good first step.
You’re always an optimist Howard
I hope you’re well
“Complete reversal of all real-term cuts to public spending and in particular social security since 2010“
Well since 2007 spending is up!
No it is not
Look at per head data
Adjust for inflation
And look at what Spending is on and you’ll find your claim is (to be polite) crass
Adjusted for inflation – spending is up from 2007, check the numbers..
But you did not allow for population, did you?
“But you did not allow for population, did you”
Yes absolutely. Check the numbers
The last time I looked that did it stack
Please share your data and sources
1. Fiscal #1: introduce taxes on wealth (some form of LVT above a reasonably large amount) and raise those on income (modest… for super high earners). Politically expedient and redistributive.
2. Fiscal #2: equalize capital gains tax and income tax. You’re not alienating voters you need with this.
3. Jobs #1/ Environ #1: large investment programme in (green) infra in support of accelerated net zero carbon by 2040. I think you can bucket electrification of Northern railways in this with argument in that it reduces driving. Creates jobs and wins votes in the right places.
4. Jobs #2: large investment programme in social housing, probably through beefed-up council budgets, most likely following a review of green belt policy on a per city basis. Political economy of this is tricky and merits discussion in a longer format than here.
5. Environ #2: petrol duty increase, road tax increase, strong tax incentives in favour of hybrids/electric for companies and consumers. ‘Turn our city centres into ULEZ’. Progressive.
6. Educ #1: On Universities, political economy of making these free could be v tricky with older voters. Rather, remove punitive interest rates from student loans and invest in world class primary and secondary education, possibly through introduction of small tax on income modelled on national insurance. Step back here to acknowledge tradeoffs.
Thanks
Appreciated
Unfortunately English Town and Country planning in the first half of the 20th century came up with a number of things that we might all regard as ‘good’ but they probably aren’t and they are certainly mostly eccentric in global terms. Firstly, there was a horror of the ‘urban industrial proletariat’ polluting the English countryside which turned into the green belt policy. I don’t think this actually has much to do with preserving the countryside for us to enjoy at our leisure (especially given English law on private land made it into a serious offence to even set foot on any of it until very recently), but rather was all about putting a cordon sanitaire around the big cities to prevent their expansion. Especially, of course, to prevent London expanding into the leafy home counties. Secondly, there was another horror of what was termed ‘ribbon development’. This is the entirely natural process by which development would occur along an axis of movement. So for example the A8 heading out of Edinburgh towards Glasgow is frequently lined by shops and small offices, tenements in many places and houses spread out from both sides of the road during the last 150 years. Far from being a horror to be prevented at all cost, ribbon development is actually by far the most sustainable as it is ideally served by public transport. When all the main movement is along a single axis it is very easy and cost effective to install a tram line or similar, and there is then little need for other solutions such as the private car. It also allows everyone easy access to the countryside. If you have a corridor of development that is, say 1km wide, then nobody is going to live more than 500m from open country. This satisfies the supposed benefits of the greenbelt far more effectively. The last horror was ‘mixed use’. For some unknown reason we had to clearly separate towns into distinct areas – residential only, retail and office only, industrial only. That of course forces travel for everything. All previous evidence was that cities were mixed use. People lived above the shop, workshops co-existed with houses.
The upshot of ‘planning’ has been that our cities are tightly constrained (which forces up land prices), have become circular which is a very difficult shape to provide effective public transport (unless all movement is in / out of the centre), and out of town developments have leap-frogged the greenbelts but produced estates / retail areas, etc that are almost entirely dependent on the car.
There is also the English obsession with the detached house as the only desirable aim. I say English advisedly given about 50% of people in Scotland live in a tenement flat. Contrary to English prejudices (I have a copy of the 1949 Abercrombie development plan for Edinburgh which identified almost all the tenement areas (for example Marchmont) as slums in need of clearance and replacement) tenements are mostly high quality and very desirable spacious homes with shared gardens. 4-5 storey tenements are actually typical for most of Europe (e.g. Rome, Berlin, Paris), with the resulting density facilitating public transport, local facilities and with land left over for parks and gardens.
So I think we should scrap most of these planning shibboleths and have linear developments along sustainable public transport corridors with a mix of tenement and house living and at a density capable of supporting local facilities such as shops, pubs and restaurants.
Whatever the merits of your planning ideas they won’t get any consideration in England if the government’s white paper on Planning for the Future goes through. I know from personal experience that volume house builders are only interested in profit and keeping costs as low as possible. Quality especially now that building control is privatised, comes a distant third. Developers will only follow demands concerning biodiversity, solar thermal or PV or ‘green’ spaces if they are forced to as they view it as an additional cost.
If the proposals in this white paper go through it will be a developers’ charter and people will be even more alienated than they are now.
This also relates to what Labour should do economically:
It should come up with economic policies that give hope to the young that their voice/needs are being heard and their lives will improve;
It should strengthen local government by properly funding it and stopping its dependence on central government (with a change in the voting system to get rid of FPTP)
It should rebalance the economy so that it improves the lives of ordinary people rather than rewarding privilege;
It should educate the public by using examples that everyone can relate to so that its proposals are not drowned in a sea of dire predictions about the ‘deficit being left for future generations’
It should base its economic policies on the likely future (climate change, more IT, more automation, pandemics, geopolitical rows) not on what we have now or some mythical view of what Britain used to be.
It should have the needs of citizens forefront on deciding what it does.
Whilst not a policy I would suggest that before setting anything on paper they should put an understanding of MMT as a top priority. Seeing the world through the MMT lens makes appreciating what is possible and what the real constraints to spending are far easier.
However, so far it’s been a case of you can lead a horse to water but you can’t make him drink.
Indeed….but it will be in my list
An opening statement to their detailed policy offering along the lines……
“Policy is constrained by real resources not money. Labour pledges to use our natural resources sustainably for the benefit of all and to nurture or our human resources to deliver the goods and services that we all need to live full lives. Money would be the servant not the master of a Labour government”.
Beyond that I am fairly relaxed….. but I would, perhaps, emphasise how COVID has made us realise who really are “key workers”- medical professionals, delivery drivers and many, many more. The minimum wage should be raised and where the state is employer, there should be a commitment to “fair” pay.
I may shamelessly borrow that paragraph
I’ll break my rule of not commenting here to applaud your suucinct and powerful statement. It captures the essence of the social democracy that has been part of me since I first encountered politics and economics, but was never able to articulate. Thank you.
Clive Parry.
Spot on!
1. Endorsement of MMT. Specifically – the government creates the money. It’s spending before taxation. The national debt isn’t a burden, nor is the deficit. The U.K. government can’t go broke when using GBP.
Without this first step then there can be no real further steps. Labour just remain singing from the same hymn sheet as the Tories and the neoliberal nightmare continues.
2. A government job guarantee. This isn’t workfare and doesn’t end the welfare state. This has to be seen as a backstop instead of currently having unemployment as a backstop.
3. Building of affordable housing. This housing should be owned by the state. Maybe some mixture of council/housing association/government. Ending of right to buy this housing in areas of the U.K. where this still applies. I would include in this not for profit flats for students.
4. Plan for a Green New Deal. You know what this is Richard, as you wrote it.
5. Better regulation – of the City of London, payday lenders, accounting. This whole connected area that has had light touch regulation for years.
6. Increase employment in the fabric of society, and increase their pay, better their conditions. Jobs like NHS, social care, childcare, elderly care, policing, council services.
I like that
Priorities for the Labour Party would be as follows:-
* That it recognises the country operates a Double Currency (Government and Bank created money)
* That it understands the reasons why it does this (Single unit of account currency stability, optimising the economy, and ability to switch to greater use of public works in times of crisis, examples being war, pandemics, global warming, etc.)
* That it understands that both government and banks create this money from thin air
* That it understands the difference between aggregate demand and targetted or effective demand:-
http://www.levyinstitute.org/pubs/wp_542.pdf
* That it understands we are now in the age of instantaneous electronic money exchange and this opens up opportunities to use this technology to use taxation in a targetted manner to optimise the economy
* That it recognises all the above is beyond the understanding of most voters and seeks to form an Economy Optimising Partnership with experts who specialise in the manipulation of government and bank created money to agree a common set of principles for optimising the UK economy. In doing so there is the recognition this will remove the unproductive political rhetoric revolving round the use of the UK’s Double Currency.
I fear you are way beyond political comprehension
I hate to say that….
What other choice is there the monetary system is way to complicated for most voters to understand?
The problem is it is way too complicated for politicians to understand
OK I see where you are coming from.
One thing I was going to add before I saw your comment is that when you explain to most people that sovereign governments are capable of creating money from thin air the immediate reaction is there’ll be hyper-inflation. (They say this completely oblivious to the facts that lax under-writing and banks ability to create money from thin air has been causing hyper-inflation in the UK for nearly five decades!)
After reading Pavlina Tcherneva’s paper on aggregate and targetted demand it’s clear the hyper-inflationists have a point here in that politicians who merely see dealing with deflationary effects requires raising aggregate demand in a broad brush rather than a targetted manner will likely trigger abnormal inflation in certain sectors of the economy and less sophisticated economic interpretation will immediately see this as a consequence of government ham-fisted interference in the economy.
http://www.levyinstitute.org/pubs/wp_542.pdf
My question therefore then becomes how can the UK rescue itself from an economy in decline unless government politicians works with the private sector in partnership to identify the strategic use of money creation to optimise the economy? The voters certainly aren’t going to come up with these strategies many didn’t and still don’t understand the implications of Brexit four years on!
My answer is, of course, that there needs to be coop[eratiomn through a Green Investment Bank
I have long rejected the scatter gun approach e.g. blanket capital allowances
My argument for an Economy Optimising Partnership is not I think too different than the circumstances that led to the National Monetary Commision in the United States which ultimately led under a Democrat government to the Federal Reserve Act which established the country’s central bank known as the Federal Reserve:-
https://www.federalreservehistory.org/essays/jekyll_island_conference
https://fraser.stlouisfed.org/files/docs/historical/nmc/nmc_243_1912.pdf
I’m sure if Americans can get themselves organised to devise better constraints and methods to optimise their economy then so can British politicians and of course addressing climate change through a Green New Deal financial structure able to issue financial instruments very much ought to be part of such a partnership agreement.
I can see the whole logic
It is also implicit in the Green New Deal Bill before Parliament right now, which I framed
1) Jobs guarantee. living wage being the floor.
2) Investment in health
3) Nationalize transport and utilities
4) State pension increases to OECD norms
These are ranked. I think that many policies I support would naturally arise from a jobs guarantee scheme that is linked to public purpose.
Thanks
– No one should go to bed hungry or without a roof over their head, except by choice.
-To restructure the UK economy to make it sustainable and carbon neutral.
-To invest as much as necessary in the infrastructure changes needed, housing, transport, green energy.
-To make available sufficient resources to make both the health and education sectors the envy of the world, we all aspire for them to be.
-To accept that working life doesn’t have to be a 48 year 40 hour week grind.
-To involve workers and the general public in the decision making to deliver the above.
Thanks
1. Abandon committments to having balanced budgets.
2. Commit to the Green Deal to stimulate growth and get us away from a carbon based economy.
3.Stop all corporate tax evasion,eg use off shore companies and other currently legal removal of registered profits to other low tax regimes.
4. Reform the tax system to lessen inequality.
5.Increase expenditure on NHS,welfare/care sector,
6.Allow local authorities to ablity to cap land prices and rental prices to help with more affordable homes being built,as well as to keep mortgage and rental levels low.
Thanks
1. MMT
2. JG
3. UBI
4. LVT
5. GND
6. UBS
THKS
LOL
Not answering your question, but I suggest they try to get three points across:
1) Governments do not spend money, they INVEST it. (And receive tax as the equivalent of dividends). What makes a good or bad Government investment should be a matter of rational debate.
2) Emphasise the complete disconnect between the price and value of work..
3) Point out that it is private sector debt, not public sector debt that is unsustanable and is the real danger to a functional society
Revitalization of local democracy
Individual rights enshrined in constitution
Reform of Parliament/ Lords including secret voting
Vast public housing programme
Social care brought into public ownership
Health care entirely restored to public ownership and accountability
Restructuring of training based on trade union/ trade association links
Move to Swiss style balance between university and vocational education
Northern transport connectivity greatly enhanced
Coherent approach to electric charging for domestic and industrial vehicles
Land value tax to replace business rates
Blue skies thinking is great – we can all come up with a “moon on a stick” wishlist – but some of the lists here look remarkably like the last Labour general election manifesto, which did not meet with all that much success, it has to be said.
The important political point for Labour – perhaps the only important political point – is how best to make sure the Conservatives lose and Labour win the next general election, whenever that may be? It would be tragic if Labour were to put forward a similarly ambitious plan and lose another general election. (It would be equally tragic if Labour were to put forward a plan that is not sufficiently ambitious, like they effectively wasted two years by promising to stick to the Conservative spending plans in 1997 – they were winning in 1997 anyway, and could have done more and quicker.)
As a Labour party member who first joined in 1981, I am uncertain whether it will ever get my vote again, let alone my campaigning efforts, if it offers voters nothing more than managerial tinkering. Voters liked the policies in 2017 and 2019 but other factors were in play. To quote Tony Blair, for whom I once campaigned and now loathe; “We are at our best when we are at our boldest.” Loving the bold proposals on here.
Other factors are always in play. Few people vote on the contents of a finely crafted manifesto. Few will even read one.
So you argue that “voters” liked Labour policies in 2017 and 2019, but despite that elected MPs from other parties instead for “other reasons”. One of those “other reasons” might be Brexit, which is itself a political policy. Another might be the FPTP electoral system, but it is what it is and it is not going to change any time soon (a move to a more proportional system would be on my wishlist, along with completing reform of the second chamber). Another might be the identity of the leader. Kier might have done better in 2019 but I doubt he would have won. Further factors might be the (dis)organisation of the party machine and the effectiveness of the campaign. Perhaps Labour needs its own Cummings (God help us).
1. Green New Deal would probably be no. 1 for me. As part of this I would prioritize energy self sufficiency including for transport. Zero carbon in 10 years is a reasonable goal.
2. Taxes on all capital gains including (at rates equal or higher than income), ie incentive work over investing.
3. Prioritise well being. Fund health and education at levels of top 3 in HDI league table.
4. Address regional inequality. Invest locally in people.
5. Eliminate tax havens and tax advantages of larger businesses.
6. Emphasise that it is what you do that counts, not ‘theories’ about monetary systems!
I am enjoying the responses to this…..
1. Raise the minimum wage, including higher rates for evening, Sunday & Bank Holiday working. Higher rates for drivers and licensed premises and some other workplaces
2. A programme to make the UK net zero carbon over 10 years
3. A levy on companies with a high percentage of low paid workers to recover ‘in work’ benefit costs
4. Limiting the maximum salary that can be treated as an expense for tax purposes
5. Major reform of the private rented sector, including ‘Air BnB’ and a requirement for landlords to be licenced
6. A programme of Council House building
7. A ban on purchase of UK land and property by non resident foreigners
8. Land reform, including LVT
Given our state of political flux I’d suggest the establishment of a Constitutional Convention which seeks to engage the people of the UK on the question of its future governance; on legitimacy, consent, representation, accountability, the public good. The constitution we have is medieval, opaque, and has ultimately conferred quasi-royal authority upon a group of people wholly unfit to wield it. I bow to others on the specifics of economic policy, but questions of what to pay for, and (dare I say it) how to pay for it, would be absolutely central to this discussion. They seem to me to be inextricably linked. Goodness knows we are entitled to a serious conversation about sovereignty at this point.
That conversation is overdue
We need to tie the issue of sovereignty closer to the power to print money for the needs of the whole population – MMT, fiat money – whatever you want to call it.
Clarion, on the subject of consent, some peoples of the U.K. know very clearly what it is: the Supreme Court ruled, that for Scotland, consent was at the whim of Whitehall and government, and not legally binding – that is, although consent would NORMALLY (the word capitalised because they debated the meaning of it for several days) be sought from the Scottish government on matters relating to Scotland, consent could mean anything up to and including no consent, and the matter is political not legal. There is no obligation on the English government to even bother asking if it’s okay to impose harmful legislation on Scotland – we are seeing this now with brexit, and there is nothing in the statutes to stop them.
But please do start the conversation about the English constitution, I think it would benefit everyone to have clarity. I just don’t think it pertains to Scotland, so isn’t a uk issue per se. Scotland does have a different constitution after all, it’s just that, at the moment, it could be called ‘subordinate’.
Just wanted to add that Richard recently recommended Stephanie Kelton’s book The Deficit Myth, which discussed in detail the opening up of policy options if politicians focus on full employment and inflation, which boils down to using real resources wisely. Inspiring read – but also depressing as it feels like there is nothing that will move people away from their ill-informed preconceptions about macroeconomics. We’ve had the Great Financial Crisis, and now a world-wide pandemic. The responses of numerous governments have demonstrated the power of fiscal spending, but still the ‘afforability’ and ‘market knows best’ arguments remain supreme. Hopefully, tomorrow I will feel more inspired than depressed.
Cherry pick the systems used by Norway, Denmark, Iceland and Finland. No need to do anything else
In addition to most of the above recommendations, could I suggest some electoral finance reform?
– Donations only by individual UK citizens on the electoral role.
– A maximum sum that reflects what the average person could donate to a political party (say around the £1k mark).
– Political parties to be financed by a formula that takes into account the numbers of full membership (that can vote in leadership and policy decisions) as well as votes gained in both local and national elections (to promote parties focusing on the electorate and not lobby groups).
Lots of good stuff here that I agree with.
Labour needs to lose its faith in markets and rather than being market led, lead the markets instead.
1. Restore all final salary pensions in the state sector – we can afford pensions and there was no good reason to end these in
the first place. Also address the unfairness in the pension system for women.
2. Give me and many other public sector workers our money back that we have lost since 2010 for no good reason. All that
economic spending potential needs to be restored.
3. Begin to regulate financial markets properly – credit default swaps should be outlawed.
4. Yes – we need to look at the democratic abuses the Tories put in place for 10 years + reverse them all, every one.
5. Labour needs to work better with other parties and create a progressive, broad and sustainable coalition.
6. We need to re-write the rules for LA governance and give them and the regions a more decentralised system to work with.
7. Start to legislate for a democracy in the digital age – ban hate speech, lying, increase monitoring and insist on full disclosure.
8. Massive investment in care, NHS, infrastructure – there’s loads of work out here that needs doing, let’s get it done.
9. Green the Labour party – now.
Thanks
You’re welcome.
” …. our core economic objective must be to create a prosperous economy that provides the richest quality of life possible for all our people & at the same time environmentally sustainable. …. we need to inspire people with how we can do so ”
John McDonnell intro to ” Economics for the many ”
So
UNITY first
mass conversion to MMT second
and
” the people will be inspired ”
We may be cynical but if neoliberalism was tolerated for the last 40 years
ARE WE NOT READY FOR RADICAL CHANGE FOR THE BENEFIT OF THE MANY ?
Implement a voting system that is fair and proportional at all levels of government. It would be a voting system for the many not the few so that all our voices are heard.
There are a lot of good suggestions here, but I will concentrate on one subject which I think both Tory and Labour Governments have neglected for far too long – housing.
1) More public sector green housing to be built. These can be council housing or public/private co-operative housing. These would be for rent at an affordable rent. There would be a maximum rent that could be charged, say 30% of the average salary (after tax) for the area. There should be a range of affordable housing from single to family dwellings.
2) Tenants in public sector housing would only have the right to buy after 10 years residence. They would have to buy at the market rate – no discount. The money raised would go back in to the kitty to build more rented housing. This money should be ring fenced to stop Govt/local authorities from reducing spending on building more properties. In other words any money raised from sales would be extra to build more homes.
3) Empty homes policy. Criminal that there are laws to stop empty homes from lying empty but little is done to bring those homes into use. Tories don’t care, Labour are all talk and no action. Let’s finally have laws with some teeth.
4) Private landlords to be licensed and a landlord points based register. A greater balance between landlords and tenants. Both to have rights and obligations. Landlords will be required to do their job in accordance with the law. Consistant failure to do so could result in them losing their licence. This should be backed by both civil and criminal law. Landlords will have the right to evict bad tenants and redress from damage. Personally I would like to see some form of rent control. There should be some tax benefits and grant incentives given to good landlords.
I think there is a big housing crisis brewing in the UK, in part because of the obsession the country has with housing as an asset, silly house price inflation and the view that many seem to take that housing is their pension. None of this is helped by the Tory obsession to prop up house prices at every opportunity. It’s madness and a monumental crisis waiting to happen as millions priced out will get towards retirement faced with having to rent when on a pension. Work that one out.
Thanks
The problem with RTB is that the Council never fully recovers the lost investment through the discount. I wouldn’t mind RTB if we got the full amount from the sale which enabled us to build a replacement.
But we don’t.
The stink is that the Government could subsidise this but don’t and we are left with a lost asset and a lost investment that does not cover the cost of replacing it. But that it because the Tories don’t want us to be able to. I reckon we need the discounted sales from two houses – maybe three – to build a new one. How’s that keeping up? And we wonder why we have an affordable housing problem?
But both major parties seem to like ‘affordable rents’ at 80% market rent? This of course reduces the Government subsidy for building. Then, the same Governments who are ok with 80% market rents get aerated about the cost of the benefit bill!!!!!
And then the tenant has to endure Universal Credit – stuck in the middle of competing objectives – reducing the buiuld subsidy and making social housing ‘stand on its own two feet’ plus efforts to reduce benefits!!!
We think that we have a problem with politicians an MMT! We also have a problem in that these ‘idioticians’ don’t understand the fine balance and inter-relation between provision and consumption policies.
Labour Party policies should be clear:
1. Its policies repudiate Conservative Party policies of Thatcherism (the belief that running the economy is a bigger version of the grocery store), blame shifting onto Europe and trade unions for failures in UK economic management, austerity (and the view that the power of the state should be shrunk and dis-empowered), re-fighting the battle against inflation after the world has moved on to the battle against recession, and magical thinking (feeding a fantasy of world-leading UK going it alone in a hostile world). They were always nonsense and they are more than ever nonsense.
2. The Labour Party will work closely in co-operation with our international allies to reorient the world economy to be more energy and climate conscious, to promote jobs and prosperity (not tax avoidance and regulatory avoidance) and to lift all boats together (not to promote beggar my neighbour policies , or trade and currency wars).
3.The Labour Party will form a government which would seek to work with all parts of the United Kingdom to re-build an economy that prioritizes the productive , trading and social capacity of the country and its people.
4. The Labour Party will help to incentivise investment into projects with the greatest total returns to the economy , not necessarily the most profitable for individuals. This implies promoting regional investment banks, infrastructure banks and direct investment in projects with high social returns.
5. The Labour Party will extend and deepen risk sharing in the economy by extending national insurance coverage for social care for the elderly and by offering jobs guarantees for those seeking work.
6. The Labour Party will not avoid its responsibility for governing the country and the prime responsibility of government for maintaining effective demand in the economy, trust and confidence in the currency and for long run price stability.
Thanks
Having read all the above comments, there’s nothing I can usefully add as most make eminent sense to me. However, no-one has mentioned foreign policy and that is an area that I think needs a major rethink and reorientation. Labour, in my view, should oppose an increase in funding for the military industrial complex, reject the ‘arms race’ philosophy starting with a ban on the sale of all weapons to authoritarian and anti-democratic regimes.
Out of interest Richard. Are you about to approach the Labour Party with some policy ideas? Hence the question?
Very indirectly, maybe
Institute a jobs guarantee set at the real living wage and have this as the minimum wage
The Green New Deal
Properly fund the NHS
Scrap all incentives for private education and return the Universities to the public sphere.
Scrap nuclear weapons and return the Armed Forces to a more conventional role with an Aid remit in peacetime.
Join EFTA.
I guess it’s not strictly an economic matter, (which is what you were asking in the question) but electoral reform.
Proportional Representation (Single Transferable Vote system). The present voting system doesn’t really encourage informed debate.
With any progressive/transformative economic policy, The Labour Party will always come up against
“but how are you going to pay for it?”
This leads back to understanding/educating MMT.
Unless Labour understands and adopts MMT and then goes out and explains it to the public, there is little hope of making any significant structural changes. They are playing to someone else’s rules at the moment and they can never win that one.
Much to agree with but virtually nothing on how to develop business and the private sector in a more constructive, green and responsible way. After all this is where more than 80% of the working population are employed, and which provides the products and services we want and need. There seems to be an unspoken assumption that MMT really does represent a bottom source of wealth. In practice MMT points out that if demand cannot be met by supply that’s precisely when you get undesirable inflation. It has to be more than enforcing the living wage, tackling tax avoidance (which as Richard has pointed out is as much about SMEs as it is large corporations) or setting and enforcing environmental standards.
There are plenty of suggestions in the writings of people like Marianna Mazzucato, Will Hutton, Colin Mayer, Rana Faroohar or even Adair Turner on the subject of the City, to name but a few. Id start with:
– policies to turn the City and finance sector into one that supports the wider economy rather than just extracts wealth for itself. That might include:
– re-regulating to separate investment banking from commercial and retail banking
– Financial Transactions Tax to discourage speculative trading
– establishing a substantial UK business bank, focused on the regions and SMEs
– incentivising long-term shareholding
– change UK company law to establish their obligations to a wider group of stakeholders, not just shareholders. Including worker representatives on boards
– bring in limits to very high pay/bonuses with maximum multiples and/or punitive tax rates
– incentives/penalties to bring back apprenticeships on a big scale (linked to tertiary education)
– massive strengthening of monopolies and take-over regulation and regulatory bodies to break up existing monopolies and prevent takeovers that damage the economy (such as ARM)
– a serious industrial strategy backed up by large scale funding and with a regional focus, linking research, education and training and industries. Green industries would of course be part of this
– a massive focus on skills and training, life long. This links to productivity that is very poor in the UK where we have developed into a low skills, low productivity, low pay economy
– tighten both the law and its enforcement to ensure that corporate misbehaviour leads to jail sentences and substantial fines both for the individuals as well as the companies. (Currently they are regarded as the cost of doing business)
– all the actions that Richard has ever suggested re the audit profession…!
– using the power of government procurement to support and encourage the ‘right’ kind of business. Including no procurement from companies using off-shore tax avoidance schemes
Its a large topic but these would be a start
This was also a big gap in the last Labour manifesto. Given that so many voters work for businesses large and small, it may not have escaped their attention. They will want to vote for a government that improves their employment and job prospects, as well tackling climate change and rebuilding public services
Thanks for adding this Robin