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15 April 2015

Chuka Umunna: Labour must make more positive case for deficit reduction

There is nothing "progressive" about "spending more on your debt interest repayments ever year than you do on housing," says the shadow business secretary. 

By George Eaton

Labour turned its attention to fiscal responsibility this week, devoting the first page of its manifesto to the subject. But the party rarely makes a positive case for deficit reduction, more often speaking of it as a regrettable but necessary task. One person who believes that it must do so, however, is Chuka Umunna. In an interview with me in this week’s New Statesman, the shadow business secretary deploys an argument more usually associated with the Conservatives. “I don’t think there is anything progressive in spending more on your debt interest repayments ever year than you do on housing, than you do on transport,” he tells me. “That is where there is an argument from a progressive position to be made for balancing the books.” He adds: “We need to make that argument and we need to make it more confidently. Because if we get elected … we’re going to have to make some really tough decisions. And we need to be clear why we’re doing this – we will be attacked from the left, not just by the Green Party but the Socialist Party and others, and we’ve got to have a confident, not a defensive position.” 

“I did not go into politics to tax people”

Elsewhere, when I ask him whether he fears that the cumulative effect of reintroducing the 50p tax rate, imposing a mansion tax and abolishing non-dom status will be to deter investment and entrepenuers, Umunna replies: “I’m very clear: I did not go into politics to tax people. We should be very clear about that as a party. Ed Balls and I say it all the time to business audiences because we believe it.” 

He tells me that he does not believe the 50p tax rate should be permanent. “I wouldn’t want to do it permanently because, as I said, I would like to see the tax burden as low as possible. I don’t believe that you tax for the sake of taxing, you tax to fund public services and, currently, to reduce our deficit and our debt.” His stance contrasts with that taken by Ed Miliband during his 2010 leadership campaign, when the latter said: “I would keep the 50p rate permanently. It’s not just about reducing the deficit, it’s about fairness in our society”.

Labour needs “a big tent approach” 

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Umunna emphasies the need for Labour to reach out to Conservative voters, few of whom it has succeeded in attracting over the last five years. 

“We have to have, and we do have, a big tent approach. I don’t subscribe to this point of view that says, ‘The wrong people voted for the Labour Party.’” The line is a reference to a recent Guardian article by Neal Lawson, the chair of Compass, the centre-left group with which Umunna was once closely associated. “My father did very well for himself back in the 1980s; what are we going to say to him: that he was too successful to be part of the Labour club?” Of his his Nigerian immigrant father, Bennett, who died in a car crash in 1992, he adds: “My dad worshipped Harold Wilson, how dare anybody say that to him.”

Umunna’s past links with Compass and his more recent ties to the Blairite group Progress have led some to charge him with ideological inconsistency. But the self-described “modern European social democrat” proposes a synthesis. “How we can succeed is by marrying the best of ‘new’ with the best of ‘blue’,” he tells me in reference to two Labour factions. The shadow business secretary wants to fuse the communitarianism championed by Compass with Progress’s “promotion of aspiration and innovative ways of delivering public services”.

For more from Umunna, including on whether he’d like to be Labour leader, read the full interview here

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