The Labour manifesto
Labour says it has a manifesto to change the face of Britain. Its plans to expand the public sector, rearrange the constitution and reduce inequality are certainly radical. Could they work?
What is this “green industrial revolution”?
Labour, like the Green Party and the Liberal Democrats, is prioritising the climate crisis. Many of the party’s nationalisation policies are rolled up under the banner of its green industrial revolution.
It is proposing a massive £400 billion fund, of which £250 billion will be devoted to green transformation. These numbers sound huge, but they are spread over 10 years, so annual spending is likely to be around £40 billion.
It is hard to tell because, although Labour has given a detailed breakdown of spending and income, it hasn’t revealed its capital plans.
Many of the measures to tackle carbon emissions are similar to other parties but, unlike the Greens, Labour has backed away from a commitment to net zero carbon by 2030.
How does Labour propose to rebuild public services?
It is promising to bring nine years of austerity on public services to an end. This will cost £83 billion a year, which is a big jump in current spending by the Government.
It includes a big pay rise for public service workers — an immediate 5% rise costing £5.3 billion.
The main priority seems to be, like the Liberal Democrats, spending on education and training, with an additional £30.4 billion a year. But of that, more than a third (£13.6 billion) will go to ending student tuition fees and restoring maintenance grants.
The second, big area is spending on health — up £5.5 billion a year — and introducing free personal care for the over-65s. This will cost a further £10.8 billion. Both of these are costs for England, but would have knock-on effects in the rest of the UK.
How will Labour reduce inequality?
Its main focus seems to be on attacking excessive income and wealth at the top of society.
It proposes big tax increases on wealthy individuals that would raise £5.4 billion from higher rate income tax-payers, £14 billion from increasing capital gains taxes and £5.2 billion from changes to inheritance tax — £24.6 billion in total.
It also proposes huge changes to taxes on businesses, raising £30 billion from changes to corporation taxes, £8.8 billion from a new financial transaction tax, £6.2 billion from tackling tax evasion, and £8.3 billion from cutting various tax reliefs for businesses — £53.3 billion in total.
In addition, Labour wants to levy a windfall tax on oil and gas companies — expected to raise £11 billion — to go towards the green transformation fund.
But what about supporting the poorest?
Labour’s plans on welfare benefits for the poorest in society are rather more modest. It proposes to spend an extra £9 billon a year on pensions and benefits, and to abolish universal credit.
It has previously said it would experiment with a universal basic income. However, the manifesto makes only a vague commitment to replacing universal credit with a “system to end poverty by guaranteeing a minimum standard of living”.
Labour wants to to reintroduce social housing, promising to build 100,000 new council houses and 50,000 social housing units a year by the end of the next Parliament.
So, how does it all add up?
The increases in public spending on services and welfare — £83 billion a year, or 10% of 2019 government expenditure — will substantially increase public spending as a proportion of GDP, as will the party’s £40billion investment programme.
Add to that the proposals to nationalise the Royal Mail, rail, energy, water, and broadband.
And under Labour, businesses would be under much tighter regulation. For example, it proposes that any company not doing enough to help tackle the climate crisis could be delisted from the stock exchange.
It is also worth noting that, in the manifesto, Labour proposes massive reforms of the UK’s political structures, with a “constitutional convention led by a citizens’ assembly”.
To summarise, it adds up to some very big changes.
Finally, what about Brexit?
Labour wants this election to be about a lot more than Brexit. It says: “It is also the climate election, the investment election, the NHS election, the living standards election, the education election, the poverty election, the fair taxes election.”
But it claims it also “will get Brexit sorted in six months by giving people the final say — with a choice between a sensible leave deal or remain. We will implement whatever the British people decide”.
It refuses to say what it would campaign for in the referendum — its new deal or remaining in the EU.
And, of course, if the vote was to leave with Labour’s deal, Brexit would not be sorted, it would go on for years — as it would under the Conservatives.
This briefing is produced by The Day in association with ENGAGE Public Policy.
- Would you vote for Labour?
- Think of all the things that the Government does for you (eduction, police, BBC, NHS etc). Then think of all the things that come from giant companies, such as Google, Amazon and Facebook. What works best? Make a list of the top five best services in your life.
- In economics, this refers to the factors of production (resources like land and man-made resources) that are used to create goods and services.
- Maintenance grants
- A grant to help university students pay for accommodation and other living costs. This money doesn’t have to be paid back.
- Universal basic income
- A fixed monthly payment that everyone gets regardless of how much money they already earn or have.
- Stock exchange
- A regulated financial market shares in business are bought and sold at prices determined by supply and demand.