One of the curiosities of the sudden re-emergence of hard ideological dividing lines in the Liz Truss era has been the fact that her central policy goal – trying to grow the economy – is not something Labor is out of touch with. Okay.
Similarly, for all the reactions of outrage and, at times, genuine surprise at Kwasi Kwarteng’s unofficial budget on Friday, the government’s approach to cutting taxes does not differ, in more basic terms, from previous Labor criticism of tax rises under Boris. Johnson and Rishi Sunak.
Political dividing lines are shifting at breakneck speed and, despite Labour’s largely unspoken delight at facing a government apparently bent on funneling tax freebies to the more affluent, the party is also careful not to fall into wrong trench
Hence the focus on the economy at this week’s Labor conference in Liverpool, and the ways in which Keir Starmer and his shadow chancellor Rachel Reeves can present an alternative vision to voters.
A first sign came in Starmer’s interview with the BBC on Sunday morning, in which he pledged to reverse the abolition of the top rate of income tax of 45p, but not the cut 1 pa the basic rate.
Half an hour earlier Andy Burnham, the Labor mayor of Greater Manchester, had argued that both should go, saying there were better ways to target aid to poorer people than a core tax cut that benefit everyone.
Economically, Burnham is probably right, but politically, Starmer’s position has some logic. In the run-up to an election, a conservative attack of “you want to raise taxes on the rich” doesn’t resonate as well as one that says “you want to raise taxes on everyone.”
The second half of that equation, which Reeves will explain Monday in perhaps the most important speech of the conference, is to lay out an alternative vision for growing the economy. And this is where the dividing lines perhaps become simpler.
Reeves stresses the importance of strong public services, particularly the NHS and education. Echoing repeated claims by Truss’s leadership campaign about his allegedly failed comprehensive school, Reeves told the Guardian in an interview ahead of his speech that his school used prefabricated cabins for sixth form buildings.
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Most voters would probably agree that public services have deteriorated since 2010, when David Cameron’s coalition government began its course of brutal austerity spending cuts, which were mainly outsourced to local authorities.
Johnson declared the era of austerity over, promising a new era of raising the level, however modestly financed. Truss and his chancellor have just delivered £45bn of tax cuts, which are intended to be permanent.
Despite Downing Street’s avowed indifference to rising public debt, Kwarteng has pledged to cut it as a share of GDP before too long, and something has to give. So it’s no surprise that some are predicting a new round of spending cuts.
Labor believes most voters will happily pay more taxes, especially if they are largely limited to corporations and the wealthiest individuals, in return for better public services. Most polls seem to support this idea, so a winter is looming in which the NHS could face its worst crisis for years, with train services collapsing and the country in an energy crisis, it could raise the specter of renewed austerity. more effective