by Jonathan Rutherford
Saturday, 3
December 2022
Idea
08:00

Five ways Labour can make Brexit work

Keir Starmer needs to champion his own kind of levelling-up
by Jonathan Rutherford
Credit: Getty

We are a little over two years away from a general election and Brexit still looms over the country. Keir Starmer has said there will be no return to freedom of movement and no major renegotiation of the deal to leave the European Union. But Labour has yet to set out how it will make Brexit work. For, as Wolfgang Munchau has pointed out, this task requires a new economic model. 

Labour needs a plan for Britain. Here are five areas on which they can focus to make Brexit work and rebuild the country.


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1. Raise living standards by rebalancing our national economy 

Critical is the devolution of decision-making, resources and tax-raising powers to give back control to local people. Without the power to force change at the centre, economic devolution will fail to happen. When reform is pushed through, an institutional framework for regional investment needs to be developed.   

2. Pledge to safeguard our natural world and achieve net zero by 2035 

This will guarantee our energy security, and create good jobs and better environments in local communities across the UK. Much of good government is about taking the decisions to bring in long-term investors, establish the business model for the production of hydrogen, and plan the new electricity and gas systems and their regulatory frameworks. 

Labour has committed £28 billion of investment a year for a decade, which needs incorporating into a UK-wide investment strategy.

3. Increase investment in the British people 

Labour can improve services through taxation on land value, unearned wealth, and the reform of unfair tax advantages. The party’s priority must be vocational education and re-skilling the workforce for the industries and businesses of the future. This will involve devolving decisions and planning to partnerships of civil society organisations, trade unions and business at local and regional level. 

Choosing high levels of immigration contributes to incentivising the low-skill, low-wage, low-productivity economy. Labour has to break with this economic model. The response to sectoral deficiencies in labour needs to include appropriate skills training and vocational education to improve productivity, not simply more immigration.

4. Create a more productive and dynamic market economy 

This can be achieved by reforming the benefits system and shifting taxation onto land and wealth.  Council Tax is unfair and ineffective:  Labour can either reassess it, or replace it with new Land Tax on property owners. The loopholes in Inheritance Tax need closing. Capital Gains Tax can be set at income tax rates, and the tax relief on higher-rate pensions contribution can be restricted. Additionally, by scrapping and replacing business rates, Labour can create a system that encourages investment and enterprise. 

5. Improve the security and resilience of the UK. 

Safeguarding national security means avoiding high levels of dependence on unfriendly or unstable foreign sources by in-shoring vital supply chains. Government procurement can be used to increase the purchase, manufacture and sale of British goods. And to safeguard food security Labour can look again at Henry Dimbleby’s National Food Strategy.

Labour needs to show how it will end the chaos of spontaneous arrivals and irregular migration. Conservative failure feeds into insecurities closer to home. A sense of belonging is vital to stable local communities, but it only flourishes in safe neighbourhoods. Labour must be the party of law and order and that means fixing the broken justice system. A Labour plan will ensure that Britain is meeting all its obligations to NATO in full, closing gaps in our capability or funding.

A plan for Britain is a covenant with the British people, based on jobs to raise a family on; British energy; safeguarding our natural world; more and better policing; control of our borders; lower levels of immigration; and investing in the British people. It is a national partnership between business and unions, between young and old, and between regions and nations. It is a covenant we will all be able to contribute to and from which we can all benefit. A more confident and secure Britain can build a new relationship with the EU and take its place in the world as a leading regional power with global reach.

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Cool Stanic
Cool Stanic
2 months ago

Attempting to achieve Net Zero by 2035, even if it were possible, would bankrupt the country and impoverish its citizens. It would not guarantee our energy security. Quite the opposite.

John Riordan
John Riordan
2 months ago
Reply to  Cool Stanic

“It would not guarantee our energy security. Quite the opposite.”

And it is difficult to avoid the perception that this is actually the intention.

Chris W
Chris W
2 months ago
Reply to  John Riordan

I have said for at least 10 years that the crazy rush to achieve Net Zero is political and nothing to do with the climate.

Net Zero implies that we are not dependent on other countries for our power.

But to get there I think we would expect about 15 million deaths. This would be a good thing for young people – think of all the housing which would become available.

Tony Price
Tony Price
2 months ago
Reply to  Chris W

You are going to have to explain that to me as I am too stupid to see it:
1/How will ‘net zero’ be achieved by killing 20% of the population?
2/ How does shifting electricity production to renewable resources based in the UK not guarantee energy security?

Chris Wheatley
Chris Wheatley
2 months ago
Reply to  Tony Price

Because the shift won’t be done well or fairly. Those who can’t speak for themselves will suffer. No problems for UnHerders though, who will be fine.

Daniel G
Daniel G
2 months ago
Reply to  Tony Price

I would suggest on point 2 that it is impossible for renewable energy (wind and solar) to power all of Britain, certainly in the near future. Look at today, pretty much no wind or solar will be generated. You would have to have gas as a back-up even if you did have much more battery infrastructure to store any wind or solar generated. The more batteries you have the more expensive the energy price would be.
Obviously gas would be no good for net zero so presumably there would be power cuts and people dying of cold. Or perhaps because they simply can’t afford the energy generated by renewables and stored in batteries. Also, more expensive energy means less industry and fewer jobs and a lower standard of living. Another plausible, maybe even desirable, possibility argued for by some but try putting it honestly to the electorate, which surely you should do in a democracy?
Maybe one day the technology will exist but saying it will by 2035 is impossible to know with any certainty. There is another debate to be had about whether net zero will actually help with the problem it’s supposed to solve, espcially if it’s only done in the West. Maybe, arguably like lockdown in the pandemic, net zero will cause more problems than it solves?

Ian Barton
Ian Barton
2 months ago
Reply to  Daniel G

Reliable energy supply and U.K. net-zero by 2040 is attainable by investing in nuclear up to 50%. It’s only really “green stupidity” that hinders this.

Last edited 2 months ago by Ian Barton
Daniel G
Daniel G
2 months ago
Reply to  Ian Barton

But even nuclear, as far as I know, can’t be switched off an on as easily as gas, and hence work as a back-up when wind and solar don’t work.

David Harris
David Harris
2 months ago
Reply to  Ian Barton

Nuclear isn’t a back up for renewable. Only gas can react quickly enough.

Marcus Leach
Marcus Leach
2 months ago
Reply to  Tony Price

Perhaps you can explain how energy generation for over 69 million people and an entire modern economy, for 356 days a year 24 hours a day, based on the most unpredictable and unreliable thing on Earth: the weather, guarantees energy security?

John Riordan
John Riordan
2 months ago
Reply to  Tony Price

“How does shifting electricity production to renewable resources based in the UK not guarantee energy security?”

Are you asking that question because you really don’t actually know the answer?

Last edited 2 months ago by John Riordan
Tony Price
Tony Price
2 months ago
Reply to  John Riordan

Yes. Obviously solar and wind are not the only answer, although I understand that they are now cheaper than fossil fuels for electricity generation, but serious advances are being made in tidal and geothermal energy that are not subject to vagaries of weather. Nuclear is expensive and waste disposal a real issue, and of course fossil fuel is needed as a back-up, but UK-generated renewable energy is where we must go. I genuinely don’t see any cogent arguments against that. I still can’t see how that will kill off 20% of the population – anyone care to enlighten me?

michael harris
michael harris
2 months ago
Reply to  Tony Price

I see a large slice of ‘blackberry and apple’ floating some yards above my head.
Be a good chap, Tony Price, see if you can reach up for it ; I’m a bit short.

Davy Humerme
Davy Humerme
2 months ago
Reply to  Tony Price

Only cheaper because of rigged “contracts for difference” pricing which allows intermittent wind and solar to be subsidised by pumping up gas prices. The undemocratic net zero ideology will destroy the living standards of the working people labour claims to represent. A labour manifesto was once described as “the longest suicide note in history”. This wish list of blue labour verities is just as terminal.

michael harris
michael harris
2 months ago
Reply to  Tony Price

2/ Because security cannot be guaranteed by wind or solar (both intermittent) and they will have to be backed up by fossil fuel or nuclear. So two energy systems will be needed instead of one.
1/ I think Chris W has in mind that a renewables system, unbacked up, will cause long blackouts, decimation of transport systems, freezing houses etc. Older people are less likely to survive this regime. 20% population fall? Possible.

Ian McKinney
Ian McKinney
2 months ago

Some nice sensible points, but labour won’t do any of this as they will be too busy closing museums and putting men into women’s spaces.

Tony Price
Tony Price
2 months ago
Reply to  Ian McKinney

Why will Labour be closing museums? Not many left to close after the last 12 years of the evisceration of public services.

Ian Barton
Ian Barton
2 months ago
Reply to  Tony Price

The curators seem to be closing them down themselves due to “decolonisation idiocy” …. and a ‘race-obsessed” Labour cabinet might accelerate this.

Last edited 2 months ago by Ian Barton
Mike Cook
Mike Cook
2 months ago
Reply to  Ian Barton

might? Do you mean you have some doubts? I certainly don’t.

John Riordan
John Riordan
2 months ago
Reply to  Tony Price

Stop telling lies. Public services over the past 12 years have merely seen the rate of increase in their budgets shaved slightly from the lunatic projections hoped-for under Gordon Brown’s tenure in No11. The “austerity” that people like you keep complaining about is something borne almost entirely by the private sector in the form of flattened wages, stagnant growth, and high taxes. Listening to apologists for the public sector making this complaint is puke-inducing, quite frankly.

Tony Price
Tony Price
2 months ago
Reply to  John Riordan

You surely can’t be serious? Please list the public services that are in equal or better shape than they were 12 years ago – it will be a very short and inconsequential list!

michael harris
michael harris
2 months ago
Reply to  Tony Price

Museums are busy closing themselves nowadays and morphing into re-education camps.

John Riordan
John Riordan
2 months ago

“Labour can improve services through taxation on land value, unearned wealth, and the reform of unfair tax advantages.”

Oh dear. This, taken together with the wish-list that characterises the rest of the article, rings alarm bells.

There is no such thing as unearned wealth and there is no such thing as an unfair tax advantage. There are unfair tax disadvantages by the dozen, of course, but that is not something any Labour government is capable of fixing.

The largest single problem with the UK’s tax system is that the tax burden is far, far too high. Even a Tory government with an 80 seat majority couldn’t fix that, so there’s no hope of a Labour government doing anything except making it worse.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  John Riordan

The problem isn’t so much that taxes in general are far too high but that taxes on work and enterprise are too high whilst taxes on wealth hoarded in property are non-existent. This is leading to the creation of a new class in society that is almost entirely parasitic.

John Riordan
John Riordan
2 months ago
Reply to  Hugh Bryant

The overall tax burden is at a 70 year high, so my statement that the tax burden is too high is exactly what I mean to say, and is I think not controversial either.

On the matter of property taxes, your claim here, too, ignores the point about why they are as they presently are. The reason is that wealth has, as a consequence of the overly burdensome and complex tax system applying to most other areas of commerce, sought the relatively safe returns available through property investment. That is why the UK’s property market is relatively bouyant compared with, say, manufacturing.

If you now propose that tax policy continues its game of fiscal whack-a-mole and hammers property investors, all you’d be achieving is to ruin the property market, and, crucially, you won’t see investment pouring into the sectors you want because all the investors have just seen the British government ruin the multi-decadal plans of existing investors by changing the tax landscape halfway through the process of making their investments work. This is why it is very difficult, in practice, to achieve tax reform through additional taxes as opposed to reduction of taxes: it always involves wrecking billions of pounds worth of current investment and destroying the trust of investors in the stabiity of investor markets generally.

Last edited 2 months ago by John Riordan
Hugh Bryant
Hugh Bryant
2 months ago
Reply to  John Riordan

I think you’re being a little naive. The principal reason why almost everyone I know is now a property millionaire is because, for twenty years at least, the central focus of the economic policies of both parties has been to artificially inflate house prices in order to buy the votes of the middle class.

The consequence is that, although GDP per capita has fallen since 2007 by more than 15 percent, property owners have continued to get richer every year at the expense of rent payers and wage earners. This represents a massive upward transfer of wealth and a huge injustice which will have to be remedied sooner or later.

Jane Williams
Jane Williams
2 months ago
Reply to  Hugh Bryant

Wow Really? Everyone you know is a property millionaire? The reason house prices are so high must have just a bit to do with immigration surely. I live in the North West where the standard of terraced property has increased dramatically because buy-to-leters have improved them dramatically. Now that people are selling there are so many fewer properties to rent. Yes there are still rotten landlords but there are few people to police the regulations. BUT if there are hundreds of thousands more people in the country and they all need housing …. immigration seems to have passed Sir Kier by but if he lived here he would know that our Council is spending millions it can’t afford on housing for people who aren’t allowed to work to support themselves. It has a long tail: Gordon Brown went to Africa and said some refugee families could come here. Kind of him but where were they settled? The North of England. I’m sorry to rant but I’m old and feel the focus of discontent that I didn’t create, am exceedingly fearful for my grandchildren and have NEVER had a new car, holiday home, thrown away Matalan TShirts because they were too cheap to bring home from holiday (yes seriously ) etc etc. We recycle, live frugally and had hoped to help our family when we die. Communism doesn’t work and Governments seem hellbent on destroying community.

Chris W
Chris W
2 months ago
Reply to  Hugh Bryant

The problem with taxes on wealth is the definition of ‘wealth’. Rich people are those with more money than I have, those who can buy better quality than I can.

When Neil Kinnock was battling with Margaret Thatcher in her last election, Kinnock’s mantra was, ‘Tax The Rich’. He was asked the meaning of ‘rich’ and he said anyone earning more than £15,000 pa. That was the end of Kinnock.

The super-rich will evade taxes anyway.

Last edited 2 months ago by Chris Wheatley
Jeremy Smith
Jeremy Smith
2 months ago
Reply to  Chris W

Taxing house (sale point at 20%) is easy to do and no one can get out of it.
But the money should be invested in R&D, CAPEX and vocational education not consumed through NHS and elderly care.

Jonathan Andrews
Jonathan Andrews
2 months ago
Reply to  Jeremy Smith

This is the constant error; schemes to improve the functioning of the economy.
The only way out is for state to do the bare minimum and let the rest of us do what we can

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  Chris W

See my response to John Riordan above.

j watson
j watson
2 months ago
Reply to  John Riordan

Where the rate of return on capital is higher than the rate of growth inherited wealth will always grow faster than earned wealth. And that is what has happened, accelerating from the early 80s alongside the inevitable trend of increasing ‘locked in’ inequality. Takes a while for folks to grasp this is why things seem so unfair. The anger manifests itself initially in different ways. Usually a section of the Right pushes an alternative scapegoat – ‘the ‘other’, immigrants etc. It’s a playbook that unfortunately does often work…for a while…and then it’s apparent it wasn’t the main cause after all.
Been much discussion about wealth taxes (and a variant regarding financial trades transaction taxes) but whether Labour goes ‘hard’ at these early I doubt. Alot of vested interests will fight against it, and therein lies the real ‘blob’.

Marcus Leach
Marcus Leach
2 months ago
Reply to  John Riordan

There is a far more simple objection. Wealth taxes have been tried in many European countries, and the result has always been the same; they end up being repealed (Austria in 1994, Denmark and Germany in 1997, the Netherlands in 2001 Finland, Iceland and Luxembourg in 2006 and Sweden in 2007) because: they are expensive to administer, they are hard on people with lots of assets but little cash, they distorted saving and investment decisions, it pushed the rich and their money out of the taxing countries, with the result that the total tax take was substantial reduced.
For example, in 2017 Macron abolished the wealth tax instituted by Chirac in 1988.
More than 12,000 millionaires left France in 2016, according to research group New World Wealth. In total, they say the country experienced a net outflow of more than 60,000 millionaires between 2000 and 2016. When these people left, France lost not only the revenue generated from the wealth tax, but all the others too, including income tax and VAT.
French economist Eric Pichet estimated that the wealth tax ended up costing France almost twice as much revenue as it generated, caused an annual fiscal shortfall of €7bn and had probably reduced gross domestic product growth by 0.2 per cent a year.

Last edited 2 months ago by Marcus Leach
R Wright
R Wright
2 months ago

Labour will do not do a single thing on this list. For them it is a dog whistle for white supremacy.

Matt M
Matt M
2 months ago

I have come to realise that we Brexiteers have been totally unprofessional because in 6 years we never stated a primary aim for post-Brexit Britain. We have waffled about new FTAs and deregulation and made constitutional points and all the while we have been allowing our opponents to set the agenda.
Remainers often demand “name one good reason for leaving the EU.” The answer has always been obvious: it is to allow us to bring net immigration below 100k a year.
This is only possible if we are out of the EU and unarguably a benefit of Brexit.
And it is pretty much accepted as a good thing by the public. I saw a poll yesterday that had 50-odd % of respondents saying immigration was too high, with Leavers close to 90%.
The support is unsurprising because our ability to build houses and infrastructure or to provide public service are clearly unable to keep up with 500k new people.
Of course we now need to amend our rules on asylum to make it clear that entering the country illegally automatically makes you ineligible for asylum. If this needs a change to some international agreements, so be it. It also requires us to build a few more deportee holding centres.
If Rishi Sunak can accept this, he can still turn around his parties electoral fortunes. If not, it will be up to Labour to deliver it. If they won’t, God knows where we will be.

Jeremy Smith
Jeremy Smith
2 months ago
Reply to  Matt M

I have come to realise that we Brexiteers have been totally unprofessional

You mean Farage, Tice, Mark Francois, BoJo, Hannan had the aura of competence in 2016? Finally it dawned on you?! Well…welcome to the real world.
How is that migration control working out for you?

Matt M
Matt M
2 months ago
Reply to  Jeremy Smith

It has, you are right. I think they should have been explicit after the referendum that the 100k cap was the main aim. Instead we never had a main thing to aim for. It could have saved a lot of pain if T May had said: we will end FoM and bring net immigration to 100k max. Beyond that, everything else is up for negotiation.

It isn’t too late though. Ultimately we didn’t trade away border control in the EU negotiations (though Truss almost did with India!)

There is no way we can live with 1/6 of the population being foreign born for long. Nor with a housing shortage and a crumbling welfare state.

Either the Tories will fix it by stopping the boats and setting the 100k cap before the next election. In which case they will win: “Vote Labour to bring back the boats!” Or Labour will have to do it. Or someone else will.

One thing is for sure. The public won’t wear it indefinitely.

Last edited 2 months ago by Matt M
Linda Hutchinson
Linda Hutchinson
2 months ago

Most of these points I agree with, and if promised (one can only get a promise) I would consider voting for them …BUT until they distance themselves from the excesses of the “progressive” left I cannot put my X aginst a Labour candidate. Even though they are riding high in th polls at the moment, anything can happen in the next couple of years; if the war in Ukraine is over, and inflation drops the Tories may be in with a chance again. Additionally, I think they are keeping some of their powder dry at the moment, but come the battle they will haul out the anti-“progressive” big guns and unless Labour push a counter-offensive they could be lost – again!

Jeremy Smith
Jeremy Smith
2 months ago

The Tories will be wiped out in the next election, but you can hope. As they say hope dies last.

polidori redux
polidori redux
2 months ago
Reply to  Jeremy Smith

With luck. Then we can watch the self-destruction of the other arm of the bourgeois liberal consensus – The fake labour party.
Your days are numbered.

Ruud van Man
Ruud van Man
2 months ago

Keir Starmer would really prefer us to rejoin the appalling EU. By the way, net zero by any date short of about 2070 is bonkers.

polidori redux
polidori redux
2 months ago
Reply to  Ruud van Man

I am quite relaxed. Starmer’s Labour Party will fail as comprehensively as the Tory Party.

Jane Williams
Jane Williams
2 months ago
Reply to  polidori redux

But meanwhile things get worse and worse. And just to be clear: I know I am a woman.

Brendan O'Leary
Brendan O'Leary
2 months ago

1. Raise taxes
2. Raise energy costs
3. Grants and subsidies
4. Create more taxes.
5. Nationalisation
That’s my brief summary of this article.

Last edited 2 months ago by Brendan O'Leary
AC Harper
AC Harper
2 months ago

Boiled down:
Do the stuff I like, somehow.
Tax the people I don’t like.
Ignore the possibility of consequences.
What could possibly go wrong?

Last edited 2 months ago by AC Harper
Ben J
Ben J
2 months ago

Net Zero? Of course! In the pubs and chip shops of Hartlepool and Sunderland they speak of little else.

Michael Marron
Michael Marron
2 months ago

And this chap is apparently “one of the leading thinkers in the Labour movement “.
It doesn’t bode well, does it?

My Ob
My Ob
2 months ago

The Cultural Studies (?) lecturer give us a lesson in his socialist utopia.
“Unearned wealth”. No such thing. He just means people investing instead of getting their hands dirty should be taxed more.
Wealth taxes – damn those successful people!
Eco-loon wide-eyed idolatry of Net Zero? Please!
And handing money and decision-making powers to an ever smaller group of local socialists?
Fair play to unHerd. A variety of views are welcome.

Paul T
Paul T
2 months ago

And everyone gets a free lollipop. Other commenters have done a good demolition job on most of the points in the article, but no-one seems to have addressed Point 1. It confuses the creation of yet more political layers with rebalancing the economy. It hardly worked well in Scotland and Wales, did it? Our existing decentralised structures have led to fiefdoms run by separatists (Sturgeon) or failed / frustrated national politicians (Burnham, Khan), which serve to channel central funding into pet projects and causes. The last thing we need is more of the same, feeding an even larger political class, writ large across the whole county.

CHARLES STANHOPE
CHARLES STANHOPE
2 months ago

Let’s face it Labour are going to be triumphant at the next Election , and deservedly so thanks to the utter incompetence and rampant dishonesty of the so called Tory Party.
Then under the guise of some ‘crisis’ we shall seek to rejoin the EU, and BREXIT will be consigned to the dustbin of history.
Consummatum est!

Last edited 2 months ago by stanhopecharles344
Chris W
Chris W
2 months ago

Then, when we are in the EU again Wales will find it much easier to leave the UK. And we will all be happy – problems will have evaporated.

CHARLES STANHOPE
CHARLES STANHOPE
2 months ago
Reply to  Chris W

Exactly!

Hugh Bryant
Hugh Bryant
2 months ago

The key to levelling up is small business and we already have the mechanism we need: council tax.

Simply impose a surcharge on all properties with more than 3 bedrooms offset by a 100percent discount for families with children under the age of eighteen. The proceeds should go to local, not central, government and be used to reduce or eliminate taxes on small businesses and startups in the poorer regions. This solves the demographic problem we face as well as the housing shortage and the over-taxation of enterprise that is killing our economy.

John Riordan
John Riordan
2 months ago
Reply to  Hugh Bryant

So your plan to solve the funding of local services is, effectively, to charge less for those services the more a household uses them?

You are joking, right?

Chris W
Chris W
2 months ago

We own our house and that is very important to us. We are being taxed on a notional value of the house and this is sort-of expected.

But I am aware that I am lucky to own a house. Now, with 12 million-ish old people, you have houses built for families which house just one or two people. This is a waste of resources. The answer to this problem (if it is a problem) is the solution to the housing shortage.

Recently, Wales looked at doubling Council Tax in order to raise money. A serious increase in Council Tax might help the tax shortfall – in line with the building of more single bedroom homes for private purchase only.

Jeremy Smith
Jeremy Smith
2 months ago

LOL
I know the website is called Unherd and I am a great believer in freedom of speech (almost extrem) but somethings are best left unherd…like the absurd article (especially points 1,3,4, and 5).