The report in today’s newspapers that a Labour shadow cabinet reshuffle may be in the offing is to be welcomed if at last it enables the party to get a grip on one of the essential components for electoral success – the Policy Review. For 18 months now this has been stranded in the doldrums with little or nothing to show for it and no report, not even a poor one, waiting to be unveiled. Liam Byrne has shown his disinterest in the project he was supposed to be heading by, in effect, resigning to contest the mayoralty of Birmingham. Another person, this time with commitment and vision and ideas and vigour, should now be appointed to take over the task, with a clear mandate to present a report resonant and vibrant enough to enthuse potential Labour voters countryside, and to have it ready for Conference 2013.
The central themes of this revised Policy Review are surely manifest. They are, first and foremost, a real jobs and growth strategy to replace the now inadequate and unnecessarily feeble ‘cut less far and less fast’. That should be funded by using the next round of quantitative easing (printing electronic money), probably £50bn, to invest directly in house-building and infrastructure (through a new National Infrastructure Bank) rather than frittering it away on the banks which have shown they lap up taxpayers’ money but then don’t increase lending to create jobs.
Second, the risky investment arm of banks should be cleanly split from the main retail activities so as to ensure that taxpayers are never landed with another bailout of (so far) £850bn. Britain needs smaller and more specialist banks, and it needs too a major shift in the money supply away from financial engineering and in favour of a sustained manufacturing revival. Under the present neoliberal capitalism Britain’s economy is steadily sinking, with annual deficits on traded goods of nearly £100bn, which is patently unsustainable.
Third, with market fundamentalism widely perceived to have got out of control, there is an urgent need to rebalance the role of the State and the markets. The State has a clear function to play in plugging gaps in an overall manufacturing strategy, strengthening lead industrial sectors against foreign competition, and countering widespread private sector failure – in house-building, pensions provision, legal services, active labour market schemes, etc.
Fourth, the obscene levels of inequality need urgently to be tackled. That requires a series of inter-connected reforms including fair and proportionate taxation of the super-rich (including an annual wealth tax), a land value tax, a serious crackdown on tax avoidance (never attempted hitherto), inclusive whole-company pay bargaining, and a significantly higher living wage.