Harriet Harman, Labour's acting leader, has caused a storm with her remarks on welfare. Photo: Getty Images
Show Hide image

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

YouTube screengrab
Show Hide image

“Trembling, shaking / Oh, my heart is aching”: the EU out campaign song will give you chills

But not in a good way.

You know the story. Some old guys with vague dreams of empire want Britain to leave the European Union. They’ve been kicking up such a big fuss over the past few years that the government is letting the public decide.

And what is it that sways a largely politically indifferent electorate? Strikes hope in their hearts for a mildly less bureaucratic yet dangerously human rights-free future? An anthem, of course!

Originally by Carly You’re so Vain Simon, this is the song the Leave.EU campaign (Nigel Farage’s chosen group) has chosen. It is performed by the singer Antonia Suñer, for whom freedom from the technofederalists couldn’t come any suñer.

Here are the lyrics, of which your mole has done a close reading. But essentially it’s just nature imagery with fascist undertones and some heartburn.

"Let the river run

"Let all the dreamers

"Wake the nation.

"Come, the new Jerusalem."

Don’t use a river metaphor in anything political, unless you actively want to evoke Enoch Powell. Also, Jerusalem? That’s a bit... strong, isn’t it? Heavy connotations of being a little bit too Englandy.

"Silver cities rise,

"The morning lights,

"The streets that meet them,

"And sirens call them on

"With a song."

Sirens and streets. Doesn’t sound like a wholly un-authoritarian view of the UK’s EU-free future to me.

"It’s asking for the taking,

"Trembling, shaking,

"Oh, my heart is aching."

A reference to the elderly nature of many of the UK’s eurosceptics, perhaps?

"We’re coming to the edge,

"Running on the water,

"Coming through the fog,

"Your sons and daughters."

I feel like this is something to do with the hosepipe ban.

"We the great and small,

"Stand on a star,

"And blaze a trail of desire,

"Through the dark’ning dawn."

Everyone will have to speak this kind of English in the new Jerusalem, m'lady, oft with shorten’d words which will leave you feeling cringéd.

"It’s asking for the taking.

"Come run with me now,

"The sky is the colour of blue,

"You’ve never even seen,

"In the eyes of your lover."

I think this means: no one has ever loved anyone with the same colour eyes as the EU flag.

I'm a mole, innit.