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14 August 2013updated 04 Oct 2023 12:02pm

What will Labour’s “policy goodies“ be?

Policies likely to be announced before the election include building a million affordable homes, scrapping the bedroom tax and creating living wage zones.

By George Eaton

With the return of growth to the economy after three years of stagnation, Labour has smartly moved on to attacking the coalition over the “cost of living crisis”. Wages are unlikely to outstrip inflation until 2015 at the earliest, leaving the average earner £6,660 worse off. But if Labour is to win the election, it won’t be enough to convince voters that they’re poorer under the Tories. It will also need to convince them that they’d be better off under Labour. In the 2012 US election, Mitt Romney similarly resurrected Ronald Reagan’s famous line – “Are you better off now than you were four years ago?” – but the electorate stuck with Obama because the numbers were moving in the right direction and they doubted Romney could do any better. The Tories hope and expect UK voters will take the same view of Labour in 2015. 

It’s for this reason that party activists and backbenchers are so desperate for Ed Miliband to fill the policy vacuum. Labour’s recent briefing David Cameron’s out of touch, you’re out of pockets promised measures including the reintroduction of a 10p tax rate, stricter caps on rail fares and a new energy watchdog with the power to force suppliers to pass on price cuts when the cost of wholesale energy falls. But while all worthy moves, such Brownite incrementalism is unlikely to have voters rushing to the polling booths. 

It was in an attempt to reassure the troops, then, that Chris Leslie, the shadow financial secretary to the Treasury (who has been acting as Ed Balls’s deputy while Rachel Reeves has been on maternity leave), promised that the party would unveil a series of “policy goodies” in the months ahead. But what could they be? Here are some possible candidates. 

A million affordable homes

All three parties have identified housing as one of the defining issues of the moment but while the coalition’s Help To Buy scheme is inflating demand, it does little to address the fundamental problem of supply. Labour has already said that it would bring forward £10bn of infrastructure investment to build 400,000 affordable homes and in 2015 it is likely to pledge to build a million over five years, a level closer to that required to meet need. In part, this could be achieved by removing the cap on councils’ borrowing, a move that Boris Johnson and Vince Cable have been pushing for but which George Osborne has consistently rejected. 

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As a policy, a mass housebuilding programme ticks all the boxes: it is easy to explain and appeals to aspirational voters. It would stimulate growth and employment, help to bring down long-term borrowing ( for every £100 that is invested in housebuilding £350 is generated in return) and reduce welfare spending. And it offers a powerful dividing line with the Conservatives. 

Scrapping the bedroom tax

The bedroom tax, which reduces housing benefit by 14% for those deemed to have one “spare room” and by 25% for those with two or more, has become the most potent symbol of the unfairness of the government’s cuts. 

While Miliband has consistently refused to pledge to repeal it, I’m told by a source close to the Labour leader that the party will promise to do so in 2015 as part of its “one nation” approach to welfare. 

Creating living wage zones

Miliband was quicker than most to recognise that the minimum wage is not enough to guarantee an adequate standard of living and that tax credits are an inefficient means of making up the difference. In response, he has consistently spoken of his ambition to dramatically expand use of the living wage. 

While the party will not introduce a compulsory version, as many activists would wish, it will take significant steps to increase its use in the private and public sector. This is likely to include making it compulsory for all government departments and contractors to pay the living wage and establishing “living wage zones”. As outlined by the Resolution Foundation and the IPPR, the zones would operate by transferring some of the savings received by the Treasury through the payment of the living wage (lower benefit payments and higher tax revenues) to local authorities to help them work with businesses to increase wages to living wage levels. 

A jobs guarantee for anyone unemployed for more than a year

In response to the distressingly high level of long-term unemployment (which rose again in the most recent quarter to 909,000), Labour has promised to introduce a compulsory jobs guarantee for all adults unemployed for 24 months or more (and for all young people unemployed for six months or more). Ahead of the election, it’s possible that it will announce a lower limit of 18 or 12 months. 

Free universal childcare for pre-school children

Miliband has long admired the example of the Nordic countries, where free universal childcare is credited with enabling high levels of female employment and Labour is likely to unveil a similar policy in 2015. This won’t be cheap, but the party can make a hard-headed economic case for reform based on the finding that for every woman who returns to full-time employment after a year of maternity leave, the government receives a net benefit of £20,050 (over four years). 

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