Phoebe Griffith is Deputy Director of IPPR
I still remember the moment when Theresa May took to the Downing Street podium for the first time.
The new Prime Minister looked straight down the camera and declared: “If you’re one of those families, if you’re just managing, I want to address you directly. I know you’re working around the clock, I know you’re doing your best, and I know that sometimes life can be a struggle. The Government I lead will be driven not by the interests of the privileged few, but by yours.”
That first speech reinforced the idea that, following the Brexit referendum in 2016, many of the truths which had underpinned British politics for years had been subverted. At one point, it seemed as if traditional party political divisions were blurring, as Conservative policymakers expressed greater interest in ideas that had previously been seen as the traditional terrain of the left, from industrial strategy to building social housing.
But the hiatus proved short lived. The Conservatives’ failed 2017 election campaign, and the increasing brutality of the battle over Brexit, has thickened the skins and tinned the ears of the UK’s political class.
And yet the underlying malaise which animated the Leave vote, and which was at the heart of May’s appeal on the steps of Downing Street, continues: wage growth is above inflation, but overall pay has not recovered to its pre-recession level, real productivity growth remains negligible, and stubbornly high inequality continues to be unaddressed. Most of the ‘just about managing’ still feel left behind.
The Johnson administration claims to be turning the page on austerity, but that needs to mean more than simply offering a quick shot of populist spending. An economic strategy which truly aims to address the needs of the most disadvantaged must have fairness at its core. And that would require a fundamental rethink, not the kind of short-term, populist bail outs that have been bandied around since Boris Johnson came to power.
Plans to address three glaring inequalities should sit at the core of the Tory manifesto.
As a first step, it should ensure that those who earn their income from wealth are treated the same as those who earn their income from work, as was the case when Nigel Lawson was Chancellor in the 1980s. At present, income from wealth is taxed significantly less than income from work. For example, someone who makes £100,000 in capital gains will pay about £14,000 in tax, while someone who earns the same amount from working ‘round the clock’ will pay £33,000, including National Insurance contributions.
And the biggest beneficiaries of this are the wealthy – the vast majority of capital gains tax collected in this way comes from people who have made gains of more than £100,000.
It is inherently unfair that those who work hard face a heavier burden of taxation than those lucky enough to inherit wealth. The system should not make it easier for the rich to get richer than for the poor to catch up. A commitment to tax wealth the same as work would help level the playing field between most working people and the ‘privileged few’.
A second step should be tackling the glaring injustice in the way we finance our health system: the huge inequality between funding for health and for social care, a gap which is only widening as our society ages and more people live with long term conditions.
The £1.5 billion offered by the most recent spending review fails to rise to this challenge. It will continue to mean that someone diagnosed with cancer today will probably get free care via the NHS, but someone diagnosed with Alzheimer’s will probably need to pay their own way. Making personal care free at the point of need would end this inequality, save the NHS £4.5 billion per year by 2030, and only cost slightly more than the proposals in the 2017 Conservative manifesto (an extra £2 billion by 2030).
Third, the manifesto needs to ensure that the cost of tackling environmental degradation is tackled through a programme with justice at its core. It is well understood that future generations which contributed the least to climate change stand to lose the most. Moreover, a poorly managed transition to zero emissions could drive further inequalities, with the most vulnerable worst hit, such as via higher energy prices or through changes in some of the most disadvantaged local economies.
IPPR’s cross-party Environmental Justice Commission has argued that environmental goals need to be allied with social and economic objectives. The case for tackling climate change cannot simply be situated within technocratic arguments about targets and strategies. These matter greatly, but making the case in this way can make it seem irrelevant to those with more pressing concerns. And failure is not an option. The Intergovernmental Panel on Climate Change has warned of the serious consequences if global average temperatures rise by more than 1.5C. We now have only 11 years to take decisive action, according to the UN.
In this context, the Government’s commitment of £432 million to establish UK environmental standards after leaving the EU – plus £30 million each for net zero projects, biodiversity and tackling air pollution – is a drop in our warming and increasingly acidified oceans. More ambitious measures are needed.
The Government’s Environment Bill goes some way to achieving this, mirroring aspects of the Sustainable Economy Act which IPPR has proposed. But we need clearer commitments on short-term binding targets for a broad range of environmental impacts – air quality, wildlife diversity and clean water in our rivers and seas. Another commitment should be a redoubled commitment to investing in a green transition – devoting around two per cent of GDP to ensuring that the UK can move quickly, and fairly, to reduce net carbon emissions to zero in line with the government’s ambition. This would be good for people, jobs and business as well as for the world we and our children live in.
Overall, IPPR’s message is clear: the Conservative manifesto is a key opportunity for the party to demonstrate that it is, as it claims, prepared to fight for people across the whole of society. To do this it will need put populist opportunism to one side and produce some bigger and bolder ideas to tackle injustice in every sphere.