Labour needs to go much further on fiscal responsibility

The party should publish a series of potential fiscal rules for discussion and replace the VAT cut with a stimulus based on growth-raising capital investment.

Labour has made a start on re-establishing its fiscal credibility but it now must go further than any opposition has done previously – and soon. Recent announcements on fiscal responsibility and welfare reform were pivotal. Having accepted that it can’t simply oppose, Labour is now free to advocate a political approach that is genuinely different to that of the Tories – placing the pursuit of social justice, greater employment, pay and growth at the heart of a fiscally responsible agenda.

When a paper called In the Black Labour was published by Policy Network at the end of December 2011, there was a storm in the Labour teacup. The party started to move towards a fiscally conservative stance but that was soon reversed under some political pressure. Many critics accused the paper of adopting George Osborne’s fiscal and economic stance. This was strange given that Osborne’s strategy of austerity before growth wasn’t fiscal conservatism, but fiscal-self harm which has led to a series of missed deficit targets.

Having resumed the path to a fiscally responsible policy 18 months later, Labour now needs to go further. To ensure fiscal responsibility, while preserving counter-cyclical flexibility, Labour should publish a series of potential fiscal rules for discussion in the expert community, identify preferred public expenditure pathways under different growth scenarios and have these tested independently. Any stimulus would need to be focused on growth-raising capital spend. Therefore, questions should be asked about a stimulus based on a VAT cut, even if temporary in nature. Labour should consider dropping this policy – and soon.

In government, these choices should be monitored by a strengthened Office for Budget Responsibility, or Fiscal Council, who would assess whether government is likely to deliver on its fiscal rules, and to make recommendations if the targets are missed. These proposals mean Labour opening its plans to greater scrutiny at an early stage than any opposition has done before, while still allowing room for manoeuvre should growth hasten or slow. Such scrutiny will make it clear how little money there is, so spare resources must be focused on generating growth through capital investment, helping the unemployed into work, encouraging business investment, and promoting science, education and skills.

Shifting from short-term expenditure to long-term investment and developing sound fiscal rules to ensure sustainable debt levels will be useful tools to help deliver a reduction in debt. However, these measures alone will not be enough to advance social justice in an era of limited budgets.

It also poses questions for welfare policy. Housing has attracted particular attention but the challenge of containing housing benefit budgets is far wider. Yes, more houses are needed but incomes for the most vulnerable, in-work support for those with disabilities and high impact job brokerage, like that seen in Newham, are also required. It is in providing all these supports and services that welfare spending should be focused. None of this will be revolutionary but it will make a measurable difference – the politics of austerity are harder. Spending elsewhere, for example on support for the better off and on above-inflation pension commitments, will have to be reduced.

This also raises the question of tax revenue. From a purely fiscally conservative perspective, the mixture of tax rises and spending cuts is broadly irrelevant (despite fervent academic debates about this issue), so long as deficits are reduced. From the point of view of social justice, however, trying to deliver 80 per cent of deficit reduction from cuts would involve an unacceptable breach of our national social fabric and would, in all likelihood, prove counter-productive. If people are therefore going to be asked to pay more tax it becomes even more important to be open about constraints and choices at an early stage – consent must be earned. The radical realisation among the more savvy on the centre-left is that spending is no longer the shortcut to social justice that it once seemed.

The state still has significant levers. For example, we live in an economy populated by almost 5 million businesses – a 40 per cent increase in only a decade and a six-fold increase since the 1970s. The vast majority of these businesses are sole traders or micro-enterprises. Many are challenging the way big businesses operate with innovative approaches; many bring benefits to their communities that many larger operations struggle to emulate,  not least keeping the wealth they generate local. Yet big business enjoys all sorts of advantages over smaller business, including access to legal action, patent restrictions, expensive regulatory constraints, access to prime space, favour by government procurement and planning law.

Challenging the bias in favour of big business would help release the spirit of entrepreneurial activity in communities across the UK that would not just drive growth and innovation but allow a fairer distribution of wealth.

Labour could place itself firmly on the side of these millions of worker-businesses committed to creating as level a playing field as possible through planning reform, tax changes, access to intellectual property, finance, international markets and marketing support.

If Labour aims to focus resources on supporting growth, putting the economy on a sustainable long term footing and fulfilling the left’s mission of being on the side of the many, not the few, then social justice, economic efficiency and, indeed, fiscal conservatism will go hand-in-hand. The choices are hard, the solutions tougher, but that is the nature of pursuing social justice in fiscally and economically constrained times. It’s better to start early. Labour has now done that but it’s only a start.

Hopi Sen and Anthony Painter have co-written Moving Labour into the Black published by Policy Network with Adam Lent

Ed Miliband and Ed Balls at the Labour conference in Manchester last year. Photograph: Getty Images.

Hopi Sen is a former head of campaigns at the Parliamentary Labour Party and blogs at www.hopisen.com

Anthony Painter is a political writer, commentator and researcher. His new book Left Without A Future? is published in July

Getty
Show Hide image

So many teenage girls don’t want to be treated as girls any more. And who can blame them?

Among internet-literate teenagers, gender has become the primary way to challenge the mores of older generations.

On the bus back from the cinema, a conversation drifted over from the back row. A mother questioning, curious, her speech accented; her teenage daughter, with perfect RP, fielding her inquiries with the exasperated patience that flourishes between the ages of 13 and 21.

“No, Mum, you’re a cis woman because you’re the gender you were born as.”

“OK. And what about Lily?”

Lily – or, perhaps, Daisy or Rose – was a school friend who was now using the pronoun “they”. The heavy overtone of the daughter’s forbearance was that these were matters her mother could not understand.

Among internet-literate teenagers, gender has become the primary way to challenge the mores of older generations. I know four journalists – London-based, middle class – whose children have announced that they do not consider themselves to be girls. It seems too many to be a coincidence. And if pained teenagers are now explaining gender fluidity to their mums on the 108 from Millennium Leisure Park West, you know the idea has truly gone mainstream.

We should welcome young people challenging gender, an arbitrary system that has acquired the status of immutable human nature. Name almost anything now associated with women – high heels, long hair, the colour pink – and you can find a time or place when it was considered masculine. And just as feminists once fought for “Ms” alongside “Miss” and “Mrs”, people should be allowed to take gender out of their honorific altogether and go by “Mx”. Getting used to “they” as a singular pronoun is harder but not impossible. Language evolves.

However, there is more to the current Gender Revolution than upending our assumptions about the “correct” names or pronouns or hobbies or appearance for men and women. In the past few years, the word “transsexual” has dropped out of favour – it is considered impolite to reference sex – in favour of “transgender”. But this obscures the idea that to cross definitively from one gender to another requires surgery and a lifetime of synthetic hormones. For trans men, it’s top surgery – breast removal – and, more rarely, a phalloplasty to make a penis, plus testosterone (“T”), which lowers the voice, hardens fat to muscle and unleashes any latent male-pattern baldness. For trans women, oestrogen (HRT, used off-label) can be supplemented with breast implants and a procedure to skin the penis and invert it, creating a neovagina and clitoris.

These surgeries are non-trivial – I have a friend undergoing the latter this summer and she will be housebound for two weeks afterwards, with a 12-week recovery period. Infection is always a risk. For her, it’s a life-saving intervention: she says she simply would not want to live in a male body.

But 80 per cent of gender-nonconforming children do not grow up to be transsexual; many emerge as happy gay men or lesbians content to live in their birth sex. A strange taboo has sprung up about mentioning this, as if the way that some people do not turn out to be trans invalidates the experiences of those who do. It should not.

But separating dissatisfaction with the social constraints of gender from body dysmorphia is vital. Because we have smudged together the categories of “transsexual” and “transgender”, is every youngster who questions their gender – and, frankly, every youngster should, because gender is restrictive bollocks – getting the message that they must bind their breasts or tuck their penis? I wince when I read oh-so-liberal parents explaining that they knew their toddler son was a girl when he wore pink and played with Barbies. Is there really anything so wrong with being a boy who wants to dress up as Elsa from Frozen? Or a girl who would rather be outside getting muddy than wear skirts and be “ladylike”? Toys and children’s clothes are becoming more gendered: when I was young, we played with Lego – not “Lego” and “Lego for Girls”. As we have shrunk the boxes, is it any wonder that more and more children want to escape from them?

In the year to March 2015, the Tavistock in London – the only specialist gender clinic in the country for under-16s – saw 697 children. This year, it saw 1,419. The largest surge has been among girls aged 14 and over and it is this group I feel most personal affinity for, because, if I were growing up today, I would be among them. A few years ago, I found a textbook from my junior school, with three sentences that floored me: “My name is Helen. I am nine years old. I am skinny.” And the truth was, I was skinny. I had a bowl haircut and wore culottes. Then puberty hit and I piled on a few stone in a year. Taut pink skin turned to lumpen fat and mottled flesh. And everyone had an opinion about it. I was trapped inside a body that didn’t feel like mine any more.

Many of my school friends felt the same way. Some tried to escape through vomiting or starving. Others were part of that charmed cohort who became lissom, beautiful, golden; their parents felt a different sort of ­worry and they were treated to sermons about getting into strange men’s cars.

I won my body back by defacing it; at least, that’s how my parents saw it. An earring, then two. And another. Then piercings that no one could see: nursing each one like a wound or a child. Salvation through pain: a metal bar through cartilage that couldn’t be slept on for a month. A tattoo that hurt like hell. Pink hair, ebbing to orange in a shower that looked like Carrie. And finally – finally – a body that felt like me.

I tell my story not to belittle anyone else’s, or to imply that they have chosen the wrong path. If you cannot live in your body, then change it – and the world must help you to do that. But if you feel crushed by society’s expectations, it might be that there’s nothing wrong with you. There’s something wrong with the world.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad