Politics is seen in a negative light in the eyes of many people for a number of reasons, and one of the most widespread perceptions is the idea of politicians promising a laundry list of things in manifestos before doing the opposite when in power. The Tories have a terrible record of doing this over the last seven years but the Budget announced a few days ago provides another such example. If the Tories are going to be beaten there needs to be a coordinated strategy calling them out for this hypocrisy as well as messages put out about how the Budget is appalling for ordinary people.
The specific policy announced in the Budget by Philip Hammond that has rightly caused such consternation in the mainstream press is the Chancellor’s decision to raise National Insurance which is estimated to increase the tax burden of around 2.5 million self-employed people by around £240 per year.
To put the merits and pitfalls of this policy aside for the moment, the decision by the Chancellor directly contradicts the 2015 Conservative Manifesto which stated: “A Conservative Government will not increase rates of VAT, Income Tax or National Insurance in the next Parliament”. This has been made very politically damaging for the Tories because Theresa May has insisted that the Chancellor’s move is “fair” despite 20 Tory MPs coming out publicly against it. Given the Tory majority is only 17, it is very possible that the Budget in its current form may not pass through the House of Commons.
As has been pointed out in a number of different newspapers, this departure from manifesto commitments is not the first. The same manifesto said that by the end of this current Parliament, Britain will be running a surplus and thus begin reducing the country’s national debt. According to the Office for Budget Responsibility, this surplus may not be achieved until 2025-26.
The Tory manifesto also said “yes to the [European] single market”, however Theresa May has all but ruled out membership of the single market because she wants to bring down the immigration figures. And speaking of immigration, the 2010 manifesto famously said that the Conservatives wanted to see immigration in the “tens of thousands”, which is ridiculous because in practical terms the only way to do that would be to destroy the economy so people wouldn’t want to come and work in Britain.
On the substance of the policy itself, the increase in National Insurance for 2.5 million people is the wrong priority. The overwhelming majority of these people run small businesses which have a unique set of problems, namely long hours, stress, and monolithic tax rules which large companies can cope with but cause small businesses headaches. A more logical policy would be reverse cuts in corporation tax, and to introduce a progressive approach to corporate profits much in the same way as income tax.
It’s worth stressing that this change would also have to be paired with new rules about what constitutes profits, because there are ways for companies to say that they aren’t in profit despite making shed loads of money. But this could easily be done by recruiting hundreds of tax lawyers to clamp down on tax avoidance schemes and make future tax legislation water-tight.
The other aspect of this story is how the Left should respond. Jeremy Corbyn’s response to the Budget in the House of Commons was a good start, but the party needs to get out into communities and deliver this message to voters. Labour need to paint a picture and appeal to peoples’ sense of right and wrong in order to effectively undermine the Tories. For example: ‘in 2010 the Tories said they weren’t going to raise VAT, and they did. They said in 2015 that they wouldn’t, and they now have. At the same time as they have raised taxes on ordinary people and the self-employed, large conglomerates and big banks have received a massive tax cut in the form of reduced levels of corporation tax. This isn’t fair and a Labour government will reverse these unjust policies’.
By coming up with concise snippets of policy substance, Labour activists can get on the doorstep and tell voters exactly what is going on. The important thing here is to clearly articulate what the Left wants to do rather than simply opposing whatever the Tories suggest. These policies should include introducing a real living wage, repealing anti-trade union laws, introducing rent caps, providing emergency funds to the NHS and redesigning how we deliver healthcare in the UK by focusing on preventative medicine and social care etc. The Left’s argument relies on piercing through the dominant discourse, and the way to do that is creating an active grassroots campaign. Relying on favourable press coverage and fair treatment by the Tories will mean waiting a long time for power.
To conclude, any illusion of the Tories being the party of working people has dropped. Continued cuts in corporation tax and tax rises on ordinary people reveal that the party is represents corporate entities and the wealthy. Not only should this be pointed out by the Left, but the next breath should be putting a cogent alternative to Tory austerity. Investment in public services, putting an end to big businesses’ economic abuse of the country, and increasing living standards through a raft of unapologetically left-wing policies are future. Only putting an alternative economic message will challenge the idea of the Tories being competent economic managers, and rejecting the focus-grouped careful language of New Labour with plain speech will convince people that the Left is correct.