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30 July 2015

Labour must learn to be radical again

Andy Burnham is right; Labour must learn to be bold again. 

By Barry Gardiner

Fear is a treacherous leader. It shrinks from the new and fails to meet the challenges of the future. Andy Burnham is clearly right to identify that the Labour Party today has become so timid that we no longer possess the courage that once created the NHS. But radical inspiration will not just come from looking back. We cannot take refuge in old solutions without sense checking them against the problems people face today.

We need to learn from our political neighbours, because right now they appear to have bolder policies than we do. The Scottish Parliament and the Welsh Assembly have many radical, reforming ideas that UK Labour should now embrace. I cannot be alone in yearning for our Leadership candidates to reconnect with some of the radical ideas like land reform (currently progressing through the Scottish Parliament); legal protection for future generations (a great idea from Norway and the Welsh Assembly); and a system of environmental economic accounting to remedy the deficiencies of GDP as the measure of a country’s wealth (now adopted by the United Nations).

Land reform in Scotland

What is the modern problem to which land reform provides a solution? It is that young people are prevented from owning their own home because land is released selectively and slowly onto the market to restrict supply and keep prices artificially high. An acre of agricultural land worth only £5,000 once it has planning permission, can suddenly fetch between £500,000 and £1million.

Currently the 99.4% of the UK population who pay £35billion of council tax and stamp duty (the only land tax the UK has) — are crowded onto just 4million acres of the UK. By contrast the 160,000 families who own the other 41million acres of inhabitable land in the UK, actually receive a subsidy from the public purse of £3.5billion every year. That’s about £83 an acre every year from us, their fellow citizens!

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The current system subsidizes a tiny elite not to make their land available for housing, but to hold on to it and ramp up its price. Breaking this perverse cycle is a key way of resolving the problems of generation rent. 

No wonder the Scottish Minister for Environment, has said that a transparent system of land rights would “promotes fairness and social justice, environmental sustainability and economic prosperity”.

And if some Labour leadership contenders are squeamish about borrowing from the SNP, perhaps they may care to recall that this was actually our party policy back in 1945. 

Obligations to Future Generations in Wales

For all that government talks about protecting future generations the temptation to intergenerational buck-passing is all too clearly evident in George Osborne’s dash for shale gas and the £3.9billion new tax he has just announced on renewables. The benefits of pumping more gas and burning more oil bring short term benefit to the economy today, but most of the impacts will be visited on our children. That is why the previous Labour Government delivered the Climate Change Act 2008; to save future Governments from their worst instincts.

But the same protection is simply not there for the rest of our natural environment. And each new generation grows up thinking that its experience is normal – rebasing expectation in a way that makes decline more and more inevitable.

Norway and Wales have passed strong legislation that forces every government minister to confront the impact that their decisions will have on future generations. In the Well-being and Future Generations Act 2015 the Welsh Government, just as Norway did twenty years ago, have lifted the policy to a vision that by statute may not disadvantage future generations for the sake of present gain.

Replacing GDP 

The UK’s National Accounting system credited the 2013/14 winter floods as the biggest boost to growth in that financial year? Paradoxically, repairing the damaged flood defences counted as productivity in GDP terms. Our system of measuring wealth is flawed and as a result we count as GDP growth, events and activities that actually undermine our prosperity.

The government has been doing accounting without balance sheets: no natural assets recorded, no record of the stocks and flows of natural capital and environmental services. True: the Treasury has yet to receive an invoice from a honey bee, but that doesn’t mean that the value of pollination services to our farmers is zero. Yet this is what our national accounts currently show. 

The UN has spent 20 years developing a system called SEEA – the System of Environmental Economic Accounting. It ascribes value to these goods and services because it recognises that all of our economy is based upon use of natural resource. But the point is not to have more detailed accounts. The point is to take better decisions. In any proper cost benefit analysis you need to include all the pluses and minuses. SEEA makes that possible. A radical Labour Prime Minister would appoint a new member of the Cabinet – an equivalent of the Chief Secretary to the Treasury to approve or veto departmental programmes on the basis of their depletion or expansion of our natural capital.

Poor decision making in government; the tragedy of short-term economic thinking; our national housing crisis: these are real 21st Century problems for our country. They are problems that can only be solved by genuinely fearless thinking about our natural environment. It is fearless thinking that may just convince a new generation of voters that we in the Labour Party have a radical forward looking vision for their future and not just a glorious, radical but exhausted past.