I noted the Politics Home email this morning suggesting that whilst the Tories have made almost no policy announcements in Manchester this week they have simultaneously pushed Labour into an almost impossible political position. Three things apparently create this outcome.
First the Tories have claimed that levelling up is their agenda even if nothing is actually happening. They think the Red Wall will believe them despite the inaction.
Second, Politics Home suggest that there is to be a near 6% increase in the living wage, taking it to £9.24 an hour, although this will not be announced today.This, they say, is what levelling up will look like in action and will be a big win for the Tories even though the gain for most working people will be less than the Universal Credit cut most on the living wage qualify for.
Third, the anti-migration rhetoric on wages will work, they think.
The result is that the suggest Labour is left with very little room for manoeuvre and that the Tories have pushed Labour out of their own natural political territory.
This is a pretty strange idea. When it comes down to what they are saying is that a so-called levelling up agenda based solely on an increase in the living wage is an election winning political strategy. The rest amounts to bluster.
Ignore that bluster and in the real world the list of issues requiring attention is near endless. For starters there are:
- The continuing Covid crisis
- Unemployment
- Extreme poverty, being made worse by government action
- NHS waiting lists
- Supply chain issues
- Food and energy price inflation
- The care crisis
- Northern Ireland
- Scottish independence
- Inequality
- Unfair tax increases
- The climate crisis (above all else)
- A democratic crisis
- A housing crisis
- EU relations
I could go on. But do I need to? The issues that Labour could be tackling are near endless.
The problem Labour has is not in finding the issues to attack the government on. It's problem is that it has decided to play by the government's rules. If Labour apes the Tory's fiscal rule - as seems likely - and says it will not borrow for current spending and will only borrow to invest if overall borrowing still falls as a percentage of GDP then it is true that there is almost nothing that Labour can do to challenge the Tories because it will have chosen to take itself out of action in most political spheres by doing so.
You can't as an opposition say you will change things for the better and also deliver spending cuts. That simply is not possible. But that is what Labour is intent on doing.
In that case Politics Home might be right. Labour may have nothing to say when the only policy left which a government can use to level up is the minimum wage because the government does not have to pay that and business does. And the Tories are going to claim this policy for themselves.
Labour has a choice to make. It can say it will balance the books or it can deliver political change. But it can't do both. It has to decide. And right now it's making the wrong choice, which means it is doing all it can to keep the Tories in power.
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Isn’t it possible that Labour have no intention of mounting a real challenge to the Torys? If they did and were successful they would have to fix the awful mess that they inherit and they don’t have anyone any more competent to do so than those who got us there in the first place!
They’ve given up on the next GE in 2023/4. Perhaps Labour might investigate a £15 min wage. I didn’t get the policy- I don’t see how small and micro businesses could afford it- but if there wete a plan to raise min wages to a gradually more realistic level than the likely 2024 maximum of somewhere around £11, this would outflank the Tories.
I have no idea what an affordable minimum wage would look like, but I very much believe it would vary across business. Affordable, related to owner-investor reward in such as Amazon would be very different for a small start-up, mightn’t it? I think dividing profits more equably might be a target to aim for. I’m not an economist, it probably shows.
People’s costs are the same whoever they work for….
Yes, absolutely, a minimum is essential. I’m thinking the bigger a business’s profit/reward, the higher the minimum wage should be for its employees. Some means of preventing very rich companies sweating their staff and levelling the playing field.
How will this outflank the Tories? It is more of the same with very little real difference. The only way for the Tories to be outflanked is by the development of policies that actually deal with the issues facing most people in this country.
So right Richard. Have been trying to say this to my Labour contacts for some time.
There is some interest – am trying to get people to discuss/debate using a draft one-page ‘declaration’ along the lines of Keynes’ ‘anything we can actually do, we can afford’.
The idea is to maybe ‘shock’, and educate – both party members and leaders, and get the attention of potential voters.
Probably pie in the sky – they are so obviously scared to say anything more than ‘we are responsible and will balance the books.’
If only there was someone with Johnson’s confidence to say ‘of course we won’t increase borrowing, just as the Conservatives haven’t borrowed the £100’bns spent in the last two years.’
Worth thinking about
Starmer won the leadership on the basis of continuing the socialist vision set out by Corbyn, but in a more competent, ‘acceptable to the public’ way.
He has shown that he is both a liar and grossly incompetent, and I think his polling shows that the public do not see him as a serious politician.
Labour are now to the right of the Tories on a number of issues – take nationalisation for example, he has said he will not look to nationalise energy companies (when he said in the leadership election he would), whereas the Tories have said they would consider it as an option.
The public are largely pro nationalisation of energy/rail/water companies therefore Labour’s position makes no electoral sense.
Starmer and his team are serious about one thing only – ensuring there is no possibility that Labour is a socialist party for the foreseeable future.
On the self inflicted broken nose, £15 an hour, that Starmer steered Labour into at conference.
My conversation with an old style working man shop owner and work provider in the Thatcher mold’s, opinion:
“How am I going to afford £15 an hour?”
On further interrogation I established:
He pays £10 cash in hand.
He claimed that he then grosses up the paye to equal that net £10! I don’t think he does and certainly not with most of his workers.
He claimed that most don’t pay tax because they work 16 hours a week which keeps them below the tax thresholds. Again I know that is a lie because they work at least double these hours.
Finally he insists everything is best done in cash! He is happy that the easing of lockdown has meant cash is again flowing easier.
(I personally don’t think cash will disappear and it shouldn’t because it does distribute money into the disposable incomes of the poorest who spend it all and pay plenty of indirect taxes by doing so.)
I told him that a minimum wage can be made affordable by government subsidy directly to the work providers as needed.
Labour didn’t come anywhere near to explaining that as they won’t about the truth of Government debt.
I actually think relatively few businesses see that much cash now, outside building maybe, and that is getting harder
I am seeing a 15% cash take at our club consistently.
Cash is not going away.
My butcher friend insists only on cash payments! He is not losing any customers.
My point is not about cash or the gaming of paye. Small/single business folk and their customers will always do what they will. More power to their elbow!
I am only trying to point out their misperception. Based on their perception management over decades. Which leads them to believe in Thatcherite enforced by Blairism, neoliberal, TINA.
There is no hope in playing their game of supposed ‘liberalism’.
I rally am not sure you know the difference between being a liberal and being a neoliberal
Well, at least £10 per hour is well above the current minimum wage.
Net pay arrangements are unusual, but not known. Assuming this is the only job, income tax does not start until £242 per week, but national insurance starts at £170 per week for the employer and £184 per week for the employee. And the lower earnings limit is £120 per week, when worker starts to qualify for certain benefits including years towards a full state pension. So a worker on £160 per week should be worried about their pension, but that is a problem for tomorrow.
I expect they are more concerned about their earnings impacting their benefits today, particularly if they don’t qualify for the work allowance but instead lose 63p of UC for each £1 they earn.
What are the odds against HMRC investigating the PAYE position of a small shop? It must be very low.
Very, very low
The Labour Party, as with other European social democratic parties, has always faced the problem of liberal social intent stymied by economic illiteracy. It, and they, still believe they face a credibility problem largely based on electoral acceptance that ‘there is no magic money tree’. Since the public believe the amount of money is finite and that economies obey rules of nature, like the weather, they are actually not wrong in this belief and how can it be otherwise when seeming experts across the globe sing the same song. DO NOT OVERESTIMATE UNDERSTANDING OUTSIDE OUR HAPPY BUBBLE.
To this pot of optimism, do not forget to add the unfortunate fact that Starmer and the Labour right have an overriding priority to ‘sanitise’ the Labour Party and marginalise the left. It MIGHT be going too far to suggest they don’t want to win an election, but this priority certainly trumps electoral considerations, which has the same practical result. A mountain to climb, Richard, so sharpen the crampons and pack a second ice axe!