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Politics
5 min read

Exploring Labour’s parameters of hope

At the party’s conference, meeting mayors and old friends rekindle a restless hope.

David is a partner with the Good Faith Partnership, collaborating on solutions to social problems.

A group of four people stand in front of an even banner, smiling
Labour mayors smiling, despite the weather.
@UKHospKate.

If weather can set the tone for events then the meteorological omens for the Labour Party Conference this year were hardly promising. By the time I’d made it to Liverpool Dockside from the train station I was already soaked and cold, and wondering if anything our new Government was going to say would cut through the gloom and kindle some much-needed hope and optimism.  

The downbeat mood of bedraggled conference-goers searching for umbrellas felt like a pretty fair reflection of the wider public as a whole. A recent piece of research found that ‘broken’ was the most common word used to describe the state of the country, and if Keir Starmer had a honeymoon period as Prime Minister it has clearly already long passed. We have become used to politics as a force of chaos and division, and as the events of this summer revealed all too starkly, this state of our public life has left our communities highly vulnerable to the forces of hate and violence that lie closer to the surface than most of us like to admit to ourselves.  

Yet my experience over 48 hours in Liverpool did give me cause for optimism, even if that came from some slightly unexpected places.

Mayors are uniquely unburdened by the departmental silos of Westminster and Whitehall, as well as having a direct mandate from the people and communities they are serving. 

One of those was the energy of new MPs. Amongst the large intake of Labour MPs there are some seriously impressive people with a vitality and creativity that has been sorely missing from British politics in recent years. I got the chance to speak to Josh MacAlister, the new MP for Whitehaven and Workington, who is a case in point. Josh set up Frontline, a graduate social worker training programme modelled on Teach First which has had huge success in boosting recruitment into a vital part of our public life. He was then asked by the last Government to lead a landmark review into Children’s Social Care, which is without doubt one of the most broken aspects of British politics with private companies making obscene profits from providing terrible care to vulnerable children, leaving a trail of human misery and financial ruin for local Government in its wake. Now he is looking to put the review’s recommendations into practice with a Government that seems far more likely to spark radical change in this area than it’s predecessor. As a foster carer myself who has seen the human cost of the current system up close and personal, meeting Josh gave me real hope that we can do better for the most vulnerable children in our country.   

The other politicians who seemed very much in the limelight in Liverpool were Mayors, who now cover more and more of our English cities and regions and are taking an increasingly significant role in our public conversations. I’ve had the opportunity to work closely with the former Mayor of Bristol Marvin Rees, and saw first-hand the incredible impact that place-based political leaders can create by convening different leaders and organisations from across the public sector, business and charities around common goals.  

Mayors are uniquely unburdened by the departmental silos of Westminster and Whitehall, as well as having a direct mandate from the people and communities they are serving. So seeing increasing amounts of resource and powers flow to Mayors is undoubtedly another cause for hope.  

One of my areas of passion is refugee and asylum inclusion, and I was part of several conversations over the Conference on how Mayors and other regional actors could play a bigger role in this policy area. As Marvin Rees used to say as Mayor of Bristol, city leaders see the issue of migration and human mobility in a fundamentally different way to national leaders, because nation-states are defined by borders and therefore constantly obsessed with controlling them, whereas cities by definition exist due to the movement of people, good and ideas, and are therefore much more interested in how policy can lead to greater welcome and connection in order to harness the strengths of having a diverse population. It is this kind of mindset and perspective shift that having stronger Mayors could bring into British politics, and to me at least it feels like a breath of fresh air. 

History teaches us that really significant change happens rarely from the top down but rather through constellations of leaders and organisations with similar worldviews but distinct resources and perspectives. 

My final source of optimism for change came not for politicians at all but from the friends and colleagues I was able to catch up with or bump into. Having been around the world of politics for nearly two decades, things like Party Conferences are a lovely opportunity to touch base with people I might not otherwise get to see.  

Over lunch with an old friend from the Bristol Mayor’s Office, we were reflecting on how being part of a wider political movement can create opportunities for collaboration and mutual support over the years and in different professional and personal contexts. As someone whose ancestors were actively involved in the Abolition Movement and the Clapham Sect, I often find myself thinking about the social dynamics of change and how movements and coalitions grow and evolve. History teaches us that really significant change happens rarely from the top down but rather through constellations of leaders and organisations with similar worldviews but distinct resources and perspectives. At a time when it often feels like party politics lacks the imagination and courage to really answer the demands of the time, I find real hope in this idea that we can all organise ourselves and our institutions for change, and we all have a responsibility to build a stronger web of relationships to make that happen.  

So, if like me you are longing for some positive change in this country, I think the Labour Party Conference did have some real signs of hope. But it’s not a passive hope that somehow having ‘the grownups in charge’ will by itself guarantee real progress. Instead, it’s a restless, active hope that says nothing will happen without us making it happen, and particularly joining the dots between people of goodwill to build something better than our status quo.  

Explainer
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Economics
6 min read

How to tax ethically to avoid a two-tier society

From income tax to property and inheritance taxes, which is fairer?
a pile of coins.
Sarah Agnew on Unsplash.

Few doubt that Chancellor Rachel Reeves will be putting up taxes when she presents her first Budget on October 30th.  

The political narrative of recent months has very much been of an alleged fiscal “black hole” of £22bn - or is it £40bn? - that somehow needs to be filled. 

While the size of the shortfall and the identity of those responsible are both hotly disputed, and despite a lack of detail from the Treasury about what it actually consists of, the questions now being asked are not whether taxes will rise but which ones and by how much.  

Months of speculation have focused on employer National Insurance, capital gains tax and freezing income tax thresholds as areas that Reeves could look to for the additional revenue. 

But beyond the immediate issue of raising enough revenue to make good any shortfall, lies a deeper, trickier question about the way in which taxes should be levied for the good of society. If a government is to force people and companies to hand over their money, then what is the most ethical way to do this? Who should pay and who shouldn’t? How can tax be used to reduce inequality and build a better society? 

Answering such questions is, of course, far from straightforward, because there are plenty of other factors in play. 

For instance, some taxes are surely levied because they are simpler to collect. Take income tax - an unpopular measure introduced in 1799, then abolished before being reintroduced as a supposed temporary measure. It could certainly be argued that taxing people’s income - their attempt to get on in life and improve their lot in life - is less “fair” than taxing wealth that has been accumulated by someone’s ancestors years ago. Working hard and earning income is often surely a way of breaking down class divisions. But income tax - contributing 28 per cent of UK government tax take in 2023-24, according to The Institute for Fiscal Studies - has the advantage that it is relatively difficult for the average worker at a UK company to avoid it. Ease of levying it is surely a driver.  

Equally, some taxes that might seem “fairer” have deliberately not been levied because of the difficulty in collecting them, and/or because to try to do so could be counterproductive.  

A wealth tax, for instance, would be “economically damaging”, according to one of the UK’s highest profile tax experts Dan Neidle. 

Or take the politically contentious issue of non-doms, a colonial era tax break allowing rich foreigners to avoid UK tax on overseas income. It would be fairer, the argument goes, to tax them on the whole of their income. If they are going to be resident in the UK, then surely they should be taxed like a UK resident whose home is here? 

Former Chancellor Jeremy Hunt abolished this regime earlier this year but left a number of concessions that the incoming Labour government pledged to abolish. But non-doms are tax-sensitive and highly mobile, and a number of jurisdictions compete to attract them. Many are entrepreneurs and wealth creators that many countries need. Reports have suggested a clampdown could raise no money or even cost money and could drive people away. 

“Housing is being treated as a commodity. The problem is, it’s not; it’s not just an asset. It has utility value and a communal and quasi-spiritual value, enabling people to feel rooted.” 

Paul Williams

So, what can be done to use tax in an ethical way? Paul Williams, research professor of marketplace theology and leadership at Regent College, Vancouver and chief executive of the Bible Society, takes a Biblical perspective that he believes offers some solutions. 

He takes as his starting point a story from the gospel of Matthew, where Jesus is asked whether people should pay taxes to Caesar. The question is a trap - either Jesus gives his backing to taxation that is highly unpopular with the Jewish people, or he rejects the tax in an act of rebellion against the Romans. 

Jesus replies that they should “pay to the Emperor what belongs to the Emperor, and pay to God what belongs to God.” We are to pay our taxes to those in authority, but we are also to honour God. 

While Williams believes that too much emphasis is placed on the Budget and political parties’ promises to be able to fix everything, and that a more radical rethink of our economy is required, he also sees room for positive tweaks to the current system. 

One key area is the property market, the manifestation of so much inequality in society, with some people owning multiple houses while others cannot afford to buy one. 

Williams argues that the ready availability of debt finance has allowed those who already hold assets to easily acquire properties, turning real estate into an investable asset class to the detriment of many of the poorer in society. 

“The reason there’s so many homeless people and empty houses is due to debt finance. It makes it easy for a relatively small proportion of the population to acquire a large percentage of the assets. 

“The system has allowed a structure in which a small advantage in the beginning can lead to big, big differences over time.” 

Williams highlights parts of Devon and Cornwall that have been, he says, “completely ruined” by wealthy people from elsewhere buying second homes, leaving property “out of reach of anyone who lives and works there”. 

Nevertheless, he believes taxation can be used in this area to help level the playing field. 

He proposes a “pretty punitive” marginal rate of tax on ownership of more than one home. (Stamp duty only partly does the job and is a blunt instrument also affecting people moving homes, thereby makes mobility expensive). 

“You want to disincentivise the way the housing market is used for speculation,” he said. 

“Housing is being treated as a commodity. The problem is, it’s not; it’s not just an asset. It has utility value and a communal and quasi-spiritual value, enabling people to feel rooted.” 

Buy-to-lets, meanwhile, are better than having empty second or third homes, but “wouldn’t it be better if occupiers could buy that house?” he adds. 

Meanwhile, research by the Financial Times recently found a huge wealth gap between the average millennial and the top 10 per cent of millennials, who are benefiting from family wealth to accumulate substantial housing assets.  

So, would increasing the rate of inheritance tax - one of the most hated of taxes - and/or lowering the threshold also help reduce some of this inequality? After all, how is it fair that one child in the UK is born to inherit large property wealth while another is born to inherit little or nothing? Or, even worse, that second child will only ever be able to afford to be the tenant of the first, paying them rent for the rest of their lives? 

Williams is not a fan of inheritance tax per se, arguing that it is “not part of the package” in a Biblical image of a flourishing economy.  

But he adds an important caveat: “the playing field is not level. 

“There might be circumstances to impose a one-off tax on the very wealthy… if you want a transition to a more equitable society.” 

Such steps are not easy to take. It is, he admits, probably “career suicide” for a politician to adopt such views. But if we are to take steps towards a fairer way of life, and avoid a two-tier society in decades to come, then maybe the conversation needs to shift this way. Perhaps the Budget could be the time to start.