Here’s an idea for Labour policy on social care – the one presented in the 2019 general election manifesto(Labour may tax wealth more heavily to fund social care, says Starmer, 9 September). This was a costed proposal for an extra £10.8bn in spending to establish a National Care Service, including free personal care for the over-65s, an end to 15-minute-maximum home visits, and an increase in the carer’s allowance.
The grey book accompanying the manifesto calculated that taxing capital gains and dividends at income tax rates would yield £14bn. While Labour should have committed to ending the social care market to achieve its goal of “ensuring care is delivered for people not for profit”, it still would have been a step forward compared with alternatives being proposed today. The fact that this was Jeremy Corbyn’s policy meant that Boris Johnson’s non-plan for social care was met with a vacuum, not an opposition.
Trade Unionist and Socialist Coalition
It is excruciating listening to Labour shadow cabinet members avoiding the question of how to pay for social care. This is what happens when a new leader ditches previous policies with nothing to replace them. Equally poor is for Keir Starmer to say that landlords should pay more income tax without saying how this would be achieved. The 2019 manifesto had perfectly good taxation policies – income tax hike on earnings over £80,000, increase in corporation tax up to 2010 levels, aligning capital gains tax rates with income tax, to which can be added removing the upper earnings limit on national insurance, with final decisions depending on economic conditions. Labour needs to get a grip before it squanders all the activists’ good work on the ground.
Larry Elliott poses the question of Labour’s tax strategy in terms of being a low- or high-tax party (Keir Starmer may be against the Tories’ tax hike, but Labour needs ideas of its own, 8 September). For the last 50 years of neoliberalism, the issue of tax has been posed in this way. Since most people know about taxes that fall on them, but very little about taxes falling on others, they assume that increased taxes will affect them. This obscures the fact that taxes can also be levied on business, assets, capital gains and rich individuals. Under neoliberalism, taxes on the wealthy have been greatly reduced, while those on people on low and medium incomes have been increased. A progressive tax strategy needs to reverse this.
Such a strategy was set out in Labour’s manifesto. It proposed raising spending by £83bn a year, paid for by a rise in taxation of capital (around 90% of the rise) and the rich. It pledged that people on incomes lower than £80,000 a year would face no tax rises. Keir Starmer, who said that he stood by the main elements of the manifesto when he was running for leader, should adopt this approach, with appropriate updates. He needs to do this now to educate the public that corporations and the rich can, and should, pay much more. Leaving this until an election is called will be far too late and, ironically, would repeat the mistake made by Corbyn in 2016-19.