Tuesday, 13 April 2010

Labour Manifesto: A future fair for all?

Lord Mandelson promised it would be a "pro-business" manifesto, and described it yesterday as a "Blair-plus" manifesto. It certainly looked that way with promises to cut £6 billion of regulation on business by 2015 and keep business taxes "competitive".

Considering New Labour has already cut corporation tax from 33% to 28%, which over 13 years has cost the Exchequer £50 billion in lost revenue, it makes it galling that business is bleating about an extra 1% of national insurance.

The Manifesto refers to "the recession created by the financial crisis" but it seems to be mainly public sector workers who will be paying for it. The manifesto refers to "tough choices" (i.e. cuts) on public services, and commits to £15bn efficiency savings (i.e. cuts) in 2010-11, and a further £11bn by 2012-13.

There will also be a 1% cap on public sector pay in 2011-12 and 2012-13. Bearing in mind inflation is currently 3.5%, public sector workers are being promised a real terms pay cut for another two years.

The manifesto also promises a £20 billion programme of asset sales (i.e. privatisation) by 2020.

There will also be more outsourcing in the running of services, with "greater support for third-sector organisations in competing for public-sector contracts" and "if the local school is underperforming it will be taken over" (hinting at more City Academies).

There is of course the same rhetoric about protecting frontline services, but the "tougher than Thatcher" cuts that Darling talked about, and the scale of cuts to halve the deficit, are still hidden it seems . . .

There were however some good things in the manifesto: the National Minimum Wage will rise at least in line with average earnings in the future, which is very welcome given that the last 3 years it has risen below inflation.

Also the Government will implement the living wage (£7.60 per hour) across all government departments - which will be good news for National Gallery workers who have recently been on strike.

The manifesto also promises to keep the Royal Mail in the public sector, re-link pensions to earnings, and double paternity leave to four weeks.

The only mention of the tax gap comes under section on 'global future': "Further action will be taken to strengthen developing countries’ tax systems, reduce tax evasion, improve reporting, and crack down on tax havens."

Tax evasion, avoidance and non-collection costs over £120bn here in UK – now that really could tackle the deficit and be 'fair for all'

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