Let’s insist that future Labour policies confront inequality and material deprivation head on, argues Alex Snowdon

You can see it in the lengthening queues at food banks and the growing number of rough sleepers. It is there in the desperation of Universal Credit claimants struggling to get by from day to day. It manifests itself in schools sending begging letters to parents and libraries replacing paid staff with volunteers – or closing altogether. 

Austerity has been a failure for most people. Since the financial crisis of 2008, there has been a sustained fall in living standards. Frozen pay, squeezed pensions and increasingly precarious work have taken their toll on working people. Tory ministers in Whitehall have inflicted massive cuts on local councils, with those in poorer areas often hit the hardest, savaging the services that they are meant to provide. Welfare has become increasingly punitive, not supportive. The rollout of Universal Credit is leading growing numbers to the edge of destitution.  

Austerity is over, declared Philip Hammond. There is a gulf between the Chancellor of the Exchequer’s rhetoric and the stark reality. Eight years of cuts are still making an impact and, contrary to Hammond’s declaration, they are not over yet. The cuts in schools funding, for example, are doing real damage to education despite Hammond’s condescending talk of ‘little extras’. 

The recent visit of a United Nations special rapporteur, Philip Alston, to investigate poverty in the UK highlighted the sustained and severe nature of austerity. During a visit to Newcastle West End food bank – the biggest in the country – he commented that the people he met were “under huge pressure… the funds that they get out of Universal Credit are not sufficient to enable them to cope”. 

Austerity, we were told, was essential for bringing down the deficit. That didn’t work. It has in fact choked the British economy, which is characterised by falling business investment, low productivity and an over-dependence on the financial sector. 

Employment figures mask the reality of millions of people doing insecure work, having ‘zero hours’ contracts or being under-employed. The Tories have no solution to these problems, though they have overseen rising wealth for those who are already very wealthy. We have not all been in it together. 

There is another way

What is the alternative? In moving beyond austerity, we need to be bold in discussing what sort of economic policy is required. It isn’t just Tory austerity but four decades of neoliberalism – privatisation, under-investment, outsourcing, rising inequality and attacks on workers’ rights – that needs undoing.

Jeremy Corbyn’s leadership of the Labour Party has opened up far greater space in British politics for discussing alternatives. With a crisis-ridden Tory government and a left-led Opposition, alternative economic policies –rooted in a radically different approach to neoliberalism – are no idle speculation. 

Labour’s ‘For the Many’ manifesto for the 2017 general election had its limitations but began to outline a credible alternative to the neoliberal mantras of Tories and New Labour alike. John McDonnell, Shadow Chancellor, has worked since then on fleshing out some of the ideas. The People’s Assembly’s ‘Britain is Broken’ tour of events is being launched to discuss the kind of alternatives we sorely need.  Here are the main outlines of what sort of economic policy Labour could adopt in government, much of which can serve to rally opposition to the current Tory government in the here and now. 

Restore public services&

The cuts must be stopped immediately. But more is needed. So much damage has been done that serious investment in rebuilding shattered public services is required. Local government has been hollowed out and needs to be restored through a big injection of money that can pay for services ranging from libraries to day centres, from school support services to public parks. This increased funding should be complemented by a restoring of public accountability and control for local authorities, bringing outsourced services back in-house. 

The housing crisis is part of the wider crisis of the public sphere.  It is obscene that anyone is homeless in one of the world’s richest countries. There should be a mass programme of building affordable housing, both for sale and for rent. This ought to be combined with investment in building and repairs for existing social housing, together with rent controls and caps in the private renting sector. 

Investment is needed in health and education. This should be accompanied by public accountability and coordination – we urgently need an end to the marketisation and fragmentation of the NHS and the wider public sector. Public utilities – electricity, gas, water, post, railways – should be restored to public control and coordinated properly. 

In the area of transport policy, it’s not just about the railways- where public ownership should be combined with investment in infrastructure and services. There should also be major investment in bus services, both for environmental reasons and to improve services and reduce costs for their overwhelmingly working class passengers. 

Invest in the future

John McDonnell’s plans for a National Investment Bank are very hopeful. This idea is inspired by a recognition of the British economy’s chronically low productivity, the imbalances in the economy (such as the erosion of industry while the City of London has flourished), and a correct grasp of the need to stimulate the economy through investment instead of endlessly cutting. 

Such plans also open up the possibility of creating many climate-friendly jobs. Massive sums currently being spent on Trident renewal could be diverted to defence diversification – using the skills of defence industry workers as the basis for more ecologically sustainable forms of work. 

Investing in the future also means a transformed approach to education. One of Labour’s most popular policies at the 2017 election was the pledge to scrap university fees. Sadly, Labour’s National Education Service has so far moved little beyond this existing commitment to free education. 

What’s needed is investment at every stage of education, including more funds for the long-neglected further education sector and a serious approach to adult learning in every community. Schools need more money, not the cuts being imposed by the Tories, and the role of local authorities needs to be renewed: funded properly, with schools being transferred from academy status back to democratic accountability. 

A new deal for workers

The erosion of pay and pensions in the public sector has been central to the austerity project since 2010. A substantial pay rise for public sector workers is long overdue. Pensions, too, should be restored. A popular Labour pledge has been a big increase in publicly-funded childcare and this is crucial for many working people, especially women. It was heartening to see the recent reports that McDonnell is considering proposals around shortening working hours. It is ridiculous that so many people work long hours – often unpaid overtime – while there are others who struggle to find enough work.  

A proper living wage is essential. High-quality vocational training and development for young workers is another urgent priority. There needs, also, to be a concerted push to support the conditions of low-paid migrant workers – so often both exploited and scapegoated – and bring them greater protections. 

A transformation of workers’ rights is essential. This is partly a matter of repealing the draconian Trade Union Act and rolling back other anti-union laws passed since the 1980s. Unions have a big role to play in improving rights, pay and conditions for millions of people at work. 

It is also about legislating to provide protections for precarious workers and those who are formally self-employed but suffering insecurity and often low pay. An end to ‘zero hours’ contracts would be a good first step. Another element of a new deal for workers would be a greater say in decision-making, both in the public sector and the private sector. McDonnell’s team has made tentative moves in this direction.

Redistribute the wealth

How can increased funds for public services, pay, pensions and social security be paid for?  Taxation is central to answering this. The focus ought to be on targeting the highest earners and redistributing a portion of their wealth to fund universal services and to help people out of poverty. 

There should also be measures to tackle excessive pay and curtail the wealth of the richest. A deeply unequal society generates numerous social problems. Inequality has grown for decades; reversing this trend will be a major test for any left-led government. 

Income tax is a big source of revenue and, while Labour’s promise to tax the highest earners more is welcome, it could go further. Corporation tax has been slashed massively over time and should be restored to a much higher level. Jeremy Corbyn’s proposal to fund the BBC licence fee through taxing technology firms adequately is an example of welcome fresh thinking about tax. 

Other ideas include a ‘Robin Hood’ tax on speculation on the financial markets, which estimates suggest could raise as much as £20 billion annually, and a ‘wealth tax’ levy on the rich that could also generate billions. Such redistributive measures are crucial for funding the big improvements we need – at work, in our public services, and to stimulate economic development – and can fuel attempts to create a more equal society.