“The cost-of-living is out of control – families have suffered a decade of falling incomes; making it harder and harder to afford the weekly shop as well as pay for rents, mortgages and bills.”
By Neil Duncan-Jordan MP
Recent media reports have suggested that if next week’s Budget doesn’t land well, it could signal the beginning of the end for the Starmer/Reeves project. There’s little doubt that the public are crying out for a political programme that addresses the core issue of living standards – and makes them feel better off in their pockets at the end of the month.
That’s why worrying rumours of a freeze on personal tax allowances won’t be the right medicine to heal the lack of public support. In effect, such a move will bring more lower paid workers into paying tax and start to threaten the state pension for the first time. If Labour’s core vote includes both these groups, why on earth are we raising money from them, rather than setting our sights on those with the broadest shoulders?
The number one issue for voters is the cost-of-living crisis – that’s why I’m calling for a Budget for Living Standards.
Fair Taxes
The cost-of-living is out of control – families have suffered a decade of falling incomes, making it harder and harder to afford the weekly shop as well as pay for rents, mortgages and bills. This has coincided with a boom time for the super-rich – billionaires have more than doubled their wealth. A clear starting point for 26th November is rebalancing our tax system, so it is genuinely fair and progressive. We need to increase the share of the pie going to people who work for a living – over those cashing in from stocks and shares. That’s why unearned wealth should be taxed just like wages, with Capital Gains Tax brought into line with income tax.
We should raise the top rate of income tax from 45% to 50%, end the paying of interest on bank central reserves and introduce a wealth tax on those with assets worth over £10 million. Put together, all of these measures could raise well over £60 billion. Not only that, but it would also signal that the government was on the side of the many, not the few.
Build Council Housing
The biggest expense for most households is housing – swallowing up huge chunks of income just to keep a roof over your head. One way to bring this cost down – is to put some of Britain’s massive wealth to work for the people creating it. Our pension funds alone hold over £3 trillion – that represents the deferred wages of millions of workers, we should look at seeing how that money could be invested for social good – most urgently by building a new generation of council housing.
Welfare That Works
Alongside social investment, there has to also be a commitment to look after those who need our support. A welfare system that works should ensure a guaranteed minimum level of benefits which cover the essentials of daily life – the two-child limit and benefit cap needs to go and the Local Housing Allowance has to be raised to adequately reflect market rents across the country. Equally, we have to protect those disability benefits that are still under attack.
Lower Bills
One way of raising additional funds would be to introduce a windfall tax on the utilities and major banks who have seen their profits soar in recent years. This would bring in up to £14 billion – more than enough to begin tackling the levels of fuel poverty that we continue to see. Over 3 million households are currently struggling to heat their homes, and that’s why we need to see a nationwide social tariff that reduces bills for those with the lowest incomes.
Better Wages
Decades of anti-worker legislation have left British workers low paid and easy to sack. The Employment Rights Bill was a major step forward – now, more action is needed. If we are serious about making work pay, we must commit to a National Living Wage of £15 per hour to put more money in workers’ pockets, and introduce sectoral collective bargaining across all industries to help stop the systematic transfer of wealth from workers to shareholders.
A Budget For Living Standards
All of this is possible, if we take the steps to reset our taxation system. The alternative would be a widening gap between the haves and the have nots – the conditions that will nurture the far right. Public services at breaking point, visible inequality on our streets and a general stagnation or decline in living standards will begin to erode public confidence and trust in the political system.
A Budget for Living Standards could begin to restore faith in Labour, bring about some real opportunities for the redistribution of wealth and nurture the green shoots of growth. The choice is quite clear – progressive economic renewal or the politics of austerity. It’s clear which one the public would choose.
- Neil Duncan-Jordan is the Labour MP for Poole. You can follow him on Twitter/X, Facebook and Instagram.
- If you support Labour Outlook’s work amplifying the voices of left movements and struggles here and internationally, please consider becoming a supporter on Patreon.
