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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Labour is launching a stealthy Scottish comeback - thanks to Jeremy Corbyn and the Daily Mail

The Scottish Labour strategy is paying off - and hard evidence that it works may be more plentiful come 8 June 2017

When I suggested to a senior Scottish Labour figure earlier this year that the party was a car crash, he rejected my assertion.

“We’re past that,” he said gloomily. “Now we’re the burnt-out wreck in a field that no-one even notices anymore.”

And yet, just as the election campaign has seen Jeremy Corbyn transformed from an outdated jalopy into Chitty Chitty Bang Bang magically soaring in the polls, Scottish Labour is beginning to look roadworthy again.

And it’s all down to two apparently contradictory forces – Corbyn and The Daily Mail.

Kezia Dugdale’s decision to hire Alan Roden, then the Scottish Daily Mail’s political editor, as her spin doctor in chief last summer was said to have lost her some party members. It may win her some new members of parliament just nine months later.

Roden’s undoubted nose for a story and nous in driving the news agenda, learned in his years at the Mail, has seen Nicola Sturgeon repeatedly forced to defend her government record on health and education in recent weeks, even though her Holyrood administration is not up for election next month.

On ITV’s leaders debate she confessed that, despite 10 years in power, the Scottish education system is in need of some attention. And a few days later she was taken to task during a BBC debate involving the Scottish leaders by a nurse who told her she had to visit a food bank to get by. The subsequent SNP attempt to smear that nurse was a pathetic mis-step by the party that suggested their media operation had gone awry.

It’s not the Tories putting Sturgeon on the defence. They, like the SNP, are happy to contend the general election on constitutional issues in the hope of corralling the unionist vote or even just the votes of those that don’t yet want a second independence referendum. It is Labour who are spotting the opportunities and maximising them.

However, that would not be enough alone. For although folk like Dugdale as a person – as evidenced in Lord Ashcroft’s latest polling - she lacks the policy chops to build on that. Witness her dopey proposal ahead of the last Holyrood election to raise income tax.

Dugdale may be a self-confessed Blairite but what’s powering Scottish Labour just now is Jeremy Corbyn’s more left-wing policy platform.

For as Brexit has dropped down the agenda at this election, and bread and butter stuff like health and education has moved centre stage, Scots are seeing that for all the SNP’s left wing rhetoric, after 10 years in power in Holyrood, there’s not a lot of progressive policy to show for it.

Corbyn’s manifesto, even though huge chunks of it won’t apply in Scotland, is progressive. The evidence is anecdotal at the moment, but it seems some Scots voters find it more attractive than the timid managerialism of the SNP. This is particularly the case with another independence referendum looking very unlikely before the 2020s, on either the nationalists' or the Conservatives' timetable.

Evidence that the Scottish Labour strategy has worked may be more plentiful come 8 June 2017. The polls, albeit with small sample sizes so best approached with caution, have Ian Murray streets ahead in the battle to defend Edinburgh South. There’s a lot of optimism in East Lothian where Labour won the council earlier in May and MSP Iain Gray increased his majority at the Scottish election last year. Labour have chosen their local candidate well in local teacher Martin Whitfield, and if the unionist vote swings behind him he could overhaul sitting MP George Kerevan’s 7,000 majority. (As we learned in 2015, apparently safe majorities mean nothing in the face of larger electoral forces). In East Renfrewshire, Labour's Blair McDougall, the man who led Better Together in 2014, can out-unionist the Tory candidate.

But, while in April, it was suggested that these three seats would be the sole focus of the Scottish Labour campaign, that attitude has changed after the local elections. Labour lost Glasgow but did not implode. In chunks of their former west of Scotland heartlands there was signs of life.

Mhairi Black’s a media darling, but her reputation as a local MP rather than a local celebrity is not great. Labour would love to unseat her, in what would be a huge upset, or perhaps more realistically go after Gavin Newlands in the neighbouring Paisley seat.

They are also sniffing Glasgow East. With Natalie McGarry’s stint as MP ending in tears – a police investigation, voting in her wedding dress and fainting in the chamber sums up her two years in Westminster – Labour ought to be in with a chance in the deprived neighbourhoods of Glasgow’s east end.

Labour in Scotland doesn’t feel like such a wreck anymore. Alan Roden’s Daily Mail-honed media nous has grabbed attention. Corbyn’s progressive policies have put fuel in the tank.

After polling day, the party will be able to fit all its Scottish MPs comfortably in a small hatchback, compared to the double decker bus necessary just a few years back.

But this general election could give the party the necessary shove to get on to the long road back.

James Millar is a political journalist and founder of the Political Yeti's Politics Podcast. He is co-author of The Gender Agenda, which will be published July 21 by Jessica Kingsley Publishing.

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