Your editorial (9 June) is correct to call Rachel Reeves’ retreat from her £28bn annual commitment on green investment an example of the renewal of a failed economic consensus. This has seen Labour aping Jeremy Hunt’s ludicrous emphasis on reducing the national debt. Instead, Labour must become leader of a pack of opposition parties all demanding a massive increase in expenditure on social and green infrastructure, and on the wages and conditions of those working in these areas. One recent estimate suggests that to achieve this, the next government will need to invest £220bn per year.
All opposition parties should promise the next parliament will use its powers to provide the money needed to fix broken Britain. This can come from three sources. First, the estimated £55bn a year of tax breaks for pension savers must be redesigned to support employment-creating investment with social and environmental goals, as should some of the £70bn a year saved tax-free in Isas – a much-needed exercise in intergenerational solidarity.
Second, increased revenue from a fairer taxation system, where the wealthier contribute far more. Finally, as a backstop for any funding shortfalls, quantitative easing should be restarted. What Labour and indeed all the opposition parties have got to grasp is that you can’t have the necessary equivalent of Roosevelt’s New Deal without a massive increase in new debt. The £28bn is a mere down payment.
Colin Hines
Convener, UK Green New Deal Group
Rachel Reeves would have more fiscal headroom for increased green investment if she introduced an overseas tax liability for British citizens, avoiding vast amounts of tax, including on offshore-owned British assets. This could be similar to the US Internal Revenue Service requirements for Americans and resident aliens living abroad. They are expected to pay taxes according to the Internal Revenue Code, which includes tax credits for paying foreign taxes where you are living, deductions and exclusions.
We cannot afford to repeat the 1997 Labour government’s mistake of sticking to fictional Tory spending plans, rather than bringing our economy gradually towards sustainable German levels of taxation, and this time really invest in decent public services.
David Nowell
London
Your report (9 June) on Labour’s plan to delay the £28bn-a-year spend on addressing the climate crisis until halfway through a first parliament makes no mention of the associated risks. These were cogently described by Rachel Reeves in 2021, when she told Labour’s conference that if the government did not invest now then the costs of climate change would be greater. Under Labour, there would “no dither, no delay” in tackling the crisis.
At the time, Labour referred to the Office for Budget Responsibility’s 2021 fiscal risks report, which said “delaying decisive action to tackle carbon emissions by ten years could double the overall cost”. For example, on costs associated with delayed investment until 2030 compared with immediate action, the report estimated that “debt in 2050-51 is 23 per cent of GDP higher than in the early action scenario”.
Labour may have decided that its political interests outweigh the risks of passing problems on to our children and grandchildren. But that is a political judgment. There should at least be transparency and honesty about the real risks associated with this choice.
Mike Sheaff
Plymouth
