It’s been an odd week for British politics. Labour and the Tories seemed to have swapped roles, with Osborne promising to pump £8bn into the NHS (although where this money comes from, who knows?), and Miliband promising that Labour will be the party of fiscal responsibility. To an extent, it makes sense: both parties are addressing their perceived weaknesses. The Conservatives know that to many, they are still the nasty party who are dismantling the NHS. Likewise, Labour is perfectly aware that, while improving, their credibility on the economy remains low. Still, it’s quite strange to see the parties changing strategies in the run-up to the election.
The most important news of the day is of course the launch of the Labour manifesto. One big policy that Labour has officially introduced is the promise to raise the minimum wage to more than £8 by October 2019. Given that current inflation is zero, and the living wage is about £7.85 an hour, this promise is symbolic of the fact that Labour is willing to offer help to those who need it, by ensuring that everyone in work has enough to live on.
What’s more interesting about the minimum wage pledge is that a text message from within the Conservative Party has been leaked to the Guardian that suggests that the Conservatives could outflank Labour by tying the minimum wage to the personal allowance. In other words, every time the minimum wage rises, so too will the tax thresholds, meaning that nobody on minimum wage will ever pay any tax. Attaching the minimum wage to the personal allowance is a more creative way of ensuring that lower earners do better, but a question mark remains as to why, when tax receipts are so low, the Conservatives would implement policy that would bring even more people out of tax. I would argue that Labour probably has the slightly stronger policy on minimum wage, although it is worth noting that if the minimum wage increased under the next government at the same rate it has under the current government, it would almost reach £8 anyway, so Labour’s policy is perhaps not as radical as one might think.
Another key economic policy that Labour has introduced is a commitment not to increase National Insurance, VAT, or the basic and higher rates of tax. Freezing NI and VAT is sensible, VAT is a regressive tax that has hurts the poor more than the rich and NI has always taken a large chunk out of the incomes of people who aren’t earning enough to even pay income tax. The promise to freeze the basic and higher rates of tax is one I’m more sceptical about, but Labour has not promised to keep the thresholds the same, and, like Gordon Brown did, Labour might stealthily raise taxes by allowing more people to be dragged into the net.
Two more policies that are obviously meant to address the cost of living crisis that has been a central theme for Labour for the whole duration of Miliband’s leadership are a fully funded fare freeze (that’s a mouthful) on train fares, that mirrors a Conservative policy, although Miliband insists the Conservative policy is ‘unfunded, uncosted, and totally unbelievable’, and protecting tax credits for working families so they rise with inflation. Both of these policies are solid, and work to reaffirm Labour’s commitment to coming down hard on the cost of living crisis.
With regards to the NHS, Labour has promised to fund the NHS £2.5bn more than the Tories would, allowing the employment of 8000 more GPs, 20,000 more nurses, and 3000 more midwives. It is unclear whether the promise to fund the NHS £2.5bn more than the Tories also applies to the £8bn that Osborne promised to the NHS yesterday, but I suspect Labour will make some sort of amendment that means that they only have to fund the NHS £2.5bn more than the Tories if the Conservative policy is fully funded. Labour’s increase on spending on the NHS is impressive, and the fact that it is fully funded (partially by the controversial mansion tax) makes it all the more impressive. Another Labour policy that is of course worth mentioning is the decision to repeal the Health and Social Care Act 2012, which the King’s Fund confirmed had led to greater marketisation of the NHS, and that the top-down reorganisation has been more damaging and distracting than useful. Finally, Labour has promised to guarantee GP appointments within 48 hours and cancer tests within a week. How exactly they plan to do this is not specified, but presumably the extra £2.5bn they plan to pump into the NHS is a contributor.
Labour’s manifesto is a good one; Miliband’s statesman-like presentation of the manifesto came across as though he believed in what the manifesto had to offer, which will serve well for improving his (let’s face it, atrocious) public image. The offerings of the manifesto are well thought out and completely funded, and Labour’s economic credibility should benefit from it. However, I do believe the manifesto could have been more radical. A promise to freeze the basic and higher income rates puts a significant limit on the extent to which Labour can bring in more money from tax increases. £2.5bn extra for the NHS is perhaps sensible given how difficult it would be to fund a larger increase, but Simon Stevens’ (CEO of NHS England) declaration that the NHS needs an extra £8bn in the next parliament, as well as the Conservative promise to provide that £8bn (although an unfunded promise) undermines Labour’s status as the party of the NHS. I also would have liked to have seen a symbolic gesture to prove that Ed Miliband’s Labour is not New Labour, such as the reinstatement of Clause IV (the abandonment of which angered many of the left-wingers that Ed should hope to win back). Even with these criticisms, Labour’s manifesto offers a sensible compromise between preserving the tenets of democratic socialism and maintaining an image of fiscal responsibility, and overall, is a success.