Harriet Harman, Labour's acting leader, has caused a storm with her remarks on welfare. Photo: Getty Images
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Harriet Harman's right: Labour has to offer an alternative, not just opposition

Harriet Harman has thrown down a gauntlet. Here's how I'd pick it up, says Stella Creasy. 

Harriet Harman has thrown down the gauntlet– to do more than be angry about George Osborne’s choices. She has a point. The public need more than an analysis of the damage he’s doing – or despair that as we are out of office we cannot define what we think is fair until 2020. To win we have to be a government in waiting, prepared not only to make difficult but also different decisions about Britain’s future. 

As deputy leader I would help us ensure we are not just an opposition, but an alternative. We do not have to wait until the next election to start. It is right to ensure employers pay a proper living wage and to support apprenticeships. It is also right we balance the national books- every penny we pay on debt repayments is money we could invest in public services. But increasing inequality will do nothing to help our economy or our society- making it harder, not easier for people to succeed is a costly mistake this Chancellor fails to recognise.  Currently Osborne plans to cut tax credits for those working hard but in low paid and insecure jobs. Rightly, many worry this will lead to an increase in child poverty. Cutting tax credits when our economic recovery is predicated on consumer spending rather than increasing productivity also risks plunging not only families into debt, but our national finances back into a tailspin. 

Whilst this government has a majority, it does not have the monopoly on the options– the value of the parliamentary process is that by our amendments and our arguments we can show how our alternative reforms would instead deliver fairness and prosperity for all. 

So what shape could our agenda take? Previously, Osborne made big play of closing the loophole exempting tax haven companies and other non-residents from capital gains tax on the sale of residential property. Curiously he left it open for commercial property. Almost nowhere else in the world exempts foreigners from tax on selling real estate. This is not only the fair thing to do, but also brings us in line with the US, Canada, Australia, and the rest of Europe. Ensuring CGT applies to all sales could save the funds needed to protect tax credits as we move to a higher wage economy. This in turn reduces the need for them in the first place.

There are other loopholes well overdue closing. Managers of private equity funds and some hedge funds receive most of their remuneration as "carried interest". This can run to hundreds of thousands or even millions of pounds, but for historic reasons it's taxed as a capital gain at 28 per cent rather than as income at 45 per cent. There's a clear case for equalising the treatment so that fund managers pay the same rate of tax as other high earners. 

The budget also increased the amount of tax relief you could claim for renting out a room, whilst cutting housing benefit for under 21s. Under-25s already make up a third of homelessness and there is a real danger these changes could make things even worse. The Government’s own figures suggest this costs little to implement- doubling the threshold for those who take in a tenant on housing benefit could help reduce the welfare bill by saving us money in our overheated private rental sector. So too overpayments within the tax credit system cost us £5.6bn. Using credit referencing before someone applies could save money, debt collection agency fees and heartache for many asked to repay mistakenly paid funds at a later date.

Finally, many focus on inheritance tax, as increasingly it is paid by the middle classes and avoided by the wealthy. Yet last year the National Audit Office identified that the biggest loophole is "business property relief". If you're seriously wealthy, and your wealth is in a trading business, BPR can help you escape inheritance tax altogether. It's supposed to help small businesses, but the use of this exemption has been rising at an astonishing rate – 50% since 2008 and much faster than the value of inheritance tax actually paid. Last year it cost £565m - restricting it to small businesses could save enough to ensure those with larger families were not penalised by tax credit changes.

These are just some examples of how Labour can tell a different story about the choices to be made on tax and benefits –where to save, how to spend and how our choices are fairer and socially just. That’s why it is right the next leader is given support to define the combination of proposals we put forward. But so too, it shows we don’t have to be stuck shouting ‘trap’ when faced with brutal Conservative plans. Opposing legislation without using the potential of public scrutiny misses our chance to use parliament to fight back. By putting forward our ideas and using the coming months to campaign for what we offer- support for those who work hard and protection for the most vulnerable to get Britain on track- we can put Osborne on the spot instead.  Let’s not wait until 2020 to show we are a government in waiting- let's get cracking now. 

 Stella Creasy is standing for the deputy leadership of the Labour Party www.stellacreasy.org.uk

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Westminster terror: Parliament hit by deadly attack

The Met Police is treating the events in Westminster as a "terrorist incident". 

A terrorist attack outside Parliament in Westminster has left four dead, plus the attacker, and injured at least 40 others. 

Police shot dead a man who attacked officers in front of the parliament building in London, after a grey 4x4 mowed down more than a dozen people on Westminster Bridge.

At least two people died on the bridge, and a number of others were seriously hurt, according to the BBC. The victims are understood to include a group of French teenagers. 

Journalists at the scene saw a police officer being stabbed outside Parliament, who was later confirmed to have died. His name was confirmed late on Wednesday night as Keith Palmer, 48.

The assailant was shot by other officers, and is also dead. The Met Police confirmed they are treating the events as a "terrorist incident". There was one assailant, whose identity is known to the police but has not yet been released. 

Theresa May gave a statement outside Number 10 after chairing a COBRA committee. "The terrorists chose to strike at the heart of our Capital City, where people of all nationalities, religions and cultures come together to celebrate the values of liberty, democracy and freedom of speech," she said.

London Mayor Sadiq Khan has tweeted his thanks for the "tremendous bravery" of the emergency services. 

Labour leader Jeremy Corbyn also released a short statement. He said: "Reports suggest the ongoing incident in Westminster this afternoon is extremely serious. Our thoughts are with the victims of this horrific attack, their families and friends. The police and security staff have taken swift action to ensure the safety of the public, MPs and staff, and we are grateful to them."

After the incident this afternoon, journalists shared footage of injured people in the street, and pictures of a car which crashed into the railings outside Big Ben. After the shots rang out, Parliament was placed under lockdown, with the main rooms including the Commons Chamber and the tearoom sealed off. The streets around Parliament were also cordoned off and Westminster Tube station was closed. 

Those caught up in the incident include visitors to Parliament, such as schoolchildren, who spent the afternoon trapped alongside politicians and political journalists. Hours after the incident, the security services began evacuating MPs and others trapped inside Parliament in small groups. 

The MP Richard Benyon tweeted: "We are locked in Chamber of House of Commons." Shadow education secretary Angela Rayner tweeted: "I'm inside Parliament and me and my staff are safe."

The MP Jo Stevens was one of the first to confirm reports that a police officer had been attacked. She tweeted: "We've just been told a police officer here has been stabbed & the assailant shot."

George Eaton, the New Statesman politics editor, was in the building. He has written about his experience here:

From the window of the parliamentary Press Gallery, I have just seen police shoot a man who charged at officers while carrying what appeared to be a knife. A large crowd was seen fleeing the man before he entered the parliamentary estate. After several officers evaded him he was swiftly shot by armed police. Ministers have been evacuated and journalists ordered to remain at their desks.   

According to The Telegraph, foreign minister Tobias Ellwood, a former soldier, tried to resucitate the police officer who later died. Meanwhile another MP, Mary Creagh, who was going into Westminster to vote, managed to persuade the Westminster tube staff to shut down the station and prevent tourists from wandering on to the scene of the attack. 

A helicopter, ambulances and paramedics soon crowded the scene. There were reports of many badly injured victims. However, one woman was pulled from the River Thames alive.

MPs trapped inside the building shared messages of sympathy for the victims on Westminster Bridge, and in defence of democracy. The Labour MP Jon Trickett has tweeted that "democracy will not be intimidated". MPs in the Chamber stood up to witness the removal of the mace, the symbol of Parliamentary democracy, which symbolises that Parliament is adjourned. 

Brendan Cox, the widower of the late, murdered MP Jo Cox, has tweeted: "Whoever has attacked our parliament for whatever motive will not succeed in dividing us. All of my thoughts with those injured."

Hillary Benn, the Labour MP, has released a video from inside Parliament conveying a message from MPs to the families of the victims.

Former Prime Minister David Cameron has also expressed his sympathy. 

While many MPs praised the security services, they also seemed stunned by the surreal scenes inside Parliament, where counter-terrorism police led evacuations. 

Those trapped inside Parliament included 40 children visiting on a school trip, and a group of boxers, according to the Press Association's Laura Harding. The teachers tried to distract the children by leading them in song and giving them lessons about Parliament. 

In Scotland, the debate over whether to have a second independence referendum initially continued, despite the news, amid bolstered security. After pressure from Labour leader Kezia Dugdale, the session was later suspended. First Minister Nicola Sturgeon tweeted that her "thoughts are with everyone in and around Westminster". The Welsh Assembly also suspended proceedings. 

A spokesman for New Scotland Yard, the police headquarters, said: "There is an ongoing investigation led by the counter-terrorism command and we would ask anybody who has images or film of the incident to pass it onto police. We know there are a number of casualties, including police officers, but at this stage we cannot confirm numbers or the nature of these injuries."

Three students from a high school from Concarneau, Britanny, were among the people hurt on the bridge, according to French local newspaper Le Telegramme (translated by my colleague Pauline). They were walking when the car hit them, and are understood to be in a critical condition. 

The French Prime Minister Bernard Cazeneuve has also tweeted his solidarity with the UK and the victims, saying: "Solidarity with our British friends, terribly hit, our full support to the French high schoolers who are hurt, to their families and schoolmates."

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.