Christmas is a time for stories. Sometime stories are just for entertainment, but often they are a way of helping us make sense of the world around us. In politics too stories are important. One of the most successful stories of recent times is the Conservative mantra that the last Labour government spent all our money, and now the only way to balance the books is to cut public services and benefits.
As fairy stories go, this is based on about the same level of hard evidence as Rudolph the Red Nosed Reindeer, but the endless repetition both by Conservative politicians, and by associated commentators and journalists, has ensured that the ‘austerity’ story is now broadly accepted as conventional wisdom. The other key factor in establishing the dominance of this narrative is the lack of any counter story by Labour in opposition.
The lack of an alternative narriative is not surprising. The key element to the financial crisis of 2008 was a financial sector increasingly addicted to risk. However Labour politicians had been complicit in this development, supporting the investment bank’s reckless search for every greater profits. As a consequence, compromised Labour polititicians allowed the austerity narrative to go largely unchallenged.
Labour’s inability to legislate for a more robust framework of financial regulation is also linked to another issue. One of the sticks used to beat any left of centre party is that they are not ‘Pro Business’. Tactically this is a pretty smart move – parties on the left are often ambivalent about commercial organisations, they aren’t particularly comfortable talking to businessmen and women and when they do, they aren’t that clear about where any mutual interest might lie. Consequently when left of centre parties gain power they are often reluctant to act against dangerous business practices for fear of being tarred with the ‘anti business’ brush.
Compare this to the certainties espoused by parties of the right. The business sector is a fundamental force for good. We need the efficiency and job and wealth creation of the private sector, and the captains of industry need to be wooed with lower personal and corporate taxes. Given an arguent based on these terms, it is not surprising that parties on the right sound more convincing.
I don’t know whether the Labour Party will ever again be a force for change or whether there will need to be a realignment of some shape, but what is clear is that left of centre parties need to develop a narrative that is convincing to the majority of the electorate. Too often this is taken to mean watered down policies which will hopefully not offend any of the major voting blocks. The more challenging way forward is to develop distinctive left of centre policies and an accompanying story which actually connects with the values and experience of the majority of the electorate.
What would be the building blocks for such a narrative from a left of centre perspective? Some of the elements could be as follows:
- The important distinction is between good and bad businesses, not being pro or anti business. Good business pay their share of corporation tax, pay their workers the living wage, (I have never understood why British taxpayers should subsidise multinationals,) and set an appropriate ratio between the highest and lowest paid staff.
- Corporate tax levels would be set at two levels, taking the above factors into account, and providing the financial incentive of lower corporate taxes for good business and higher rates for companies which try to avoid a fair financial contribution to our country.
- The base rate of corporation tax for multinational companies should be the % of the company’s global profits calculated as the share of revenue generated in the UK relative to the global revenue generated. There is no moral or financial justification for companies to use balance sheet trickery to avoid paying their fair share of taxes to our country. All this does is cheat our country out of money which could go to deliver critical services whilst placing a disproportionate burden on those companies and individuals who do pay their fair share of tax.
- Small businesses inject proportionately more money into our local and national economies than their multinational counterparts. This should be recognised in lower tax rates and simpler reporting structures. Local authorities should have more autonomy over planning decisions which are currently heavily biased towards bigger companies.
- There is a moral and financial objection to companies aiming to make a profit out of the front line delivery of public services. There is no compelling evidence for the greater efficiency of commerical organisations operating in this area of the public sector, and certainly not enought to justify the diversion of public funds from funding services to private profit. However, just as in the private sector, there are good and bad public sector organisations and there should be competition between a wide range of not for profit organisations to deliver these services, with oversight by a suitably resourced government department.
- Public services are the bedrock of a civilised society and an essential element in providing opportunity for all. Our current level of government debt is not that high historically. The policy of repaying this debt over the next four years is based on ideology – that the public sector is generally a bad thing and should be reduced as much as possible. Is this really a view that sits comfortably with the experience of the majority of the electorate?
Whilst I am sure that this list of points could be improved and / or developed, the basic premise holds. Progressive parties need to develop a distinctive left of centre policy for working with businesses which will build support amongst ‘good’ businesses and make life easier for smaller / start up enterprises. However the policies themselves are not enough, these need to be presented in a narrative based on values (such as fairness and a positive patriotism) which resonate across a wider spectrum of the electorate.