Labour Party Chair Ian Lavery MP responds to Theresa May’s speech

Labour Party Chair Ian Lavery MP said:

“While the country is crying out for real change, all Theresa May and her party offer are pinched ideas and tinkering around at the edges, relying on petty attacks to cover up their lack of vision.

“Austerity is not an economic necessity. It is a political choice made by the Conservatives to hack away at our public services and communities, leaving workers worse off while gifting huge tax cuts to big business. And as long as Britain has a Conservative Prime Minister, we'll never see an end to austerity.

“Theresa May has shown her party offers no answers, no ideas, and no hope for communities held back for too long. Labour has put forward a radical and credible plan to transform our economy, public services and towns and cities. A plan to rebuild Britain for the many, not the few.”

Ends

Notes to editors:

• ·       The few new policies announced by Theresa May have been taken directly from Labour, adding to others they’ve stolen during the course of this conference:

• o   Labour have long called to “lift the housing revenue account borrowing cap to liberate councils to start a new era of council house building.” The Tories capped council borrowing for new homes when they localised housing finance in 2012. It has taken them six years to promise to undo their own mistake, as Labour has demanded. Labour committed to lifting Council’s Housing Revenue account borrowing cap in our Mini Housing Manifesto at the last election.

Labour’s Mini Housing Manifesto, p18, https://labour.org.uk/wp-content/uploads/2017/10/Housing-Mini-Manifesto.pdf

• o   Labour committed to a new cancer strategy in our 2017 Manifesto:

“We will deliver the Cancer Strategy for England in full by 2020, helping 2.5 million people living with cancer”

Labour’s 2017 Manifesto, p66, http://labour.org.uk/wp-content/uploads/2017/10/labour-manifesto-2017.pdf

• ·       Rather than promising to end austerity, Theresa May merely indicated that next year’s Spending Review will set out an approach for the future. Projections of departmental spending between now and 2022 demonstrate clearly that enormous cuts are still to be made.

• ·       The Tories claimed to be ending austerity three years ago in George Osborne's Autumn Statement in 2015, but all we’ve seen is further cuts, and there are more cuts to come. 

https://www.telegraph.co.uk/news/politics/georgeosborne/12017582/George-Osborne-ushers-in-the-end-of-austerity-but-increases-taxes.html

• ·       Recent research has shown that the Conservatives’ version of ending austerity is no such thing.
  • o   Just keeping up with spending pressures will mean the Chancellor having to find an additional £15bn for 2023/24 compared with expected current plans
  • o   Improving services to reverse some of the costs of austerity would mean the Chancellor having to find an additional £32bn for 2023/24

https://neweconomics.org/uploads/files/NEF-AUSTERITY-BY-STEALTH_2018.pdf

• ·       Theresa May also announced reducing bowel cancer screening age in England from 60 to 50, but this was first announced by Public Health England in August

• ·       She also re-announced that foreign buyers of properties in the UK will have to pay a new levy on property. Labour’s 2017 manifesto called for an Offshore Company Property Levy. 

https://labour.org.uk/press/mcdonnell-demands-hammond-introduce-almost-1bn-oligarch-levy-hit-russian-tax-dodgers/

• ·       The Tories NHS funding announcement, has already been criticised by health think tanks and the wider sector for being inadequate. Responding to the announcement the Health Foundation said: “Increases of just 3.4% a year mean longer waits for treatment, ongoing staff shortages, deterioration of NHS buildings and equipment, and little progress to address cancer care.”

Health Foundation Press Release, June 16 2018

https://www.health.org.uk/news/health-foundation-response-government-announcement-additional-nhs-funding

• ·       Prior to 2010, the long-term funding increases in the NHS were 4 per cent per year. The Tories’ unfunded commitment is just 3.4 per cent - after eight years in which NHS budget increases have averaged just 1.4 per cent and there have been huge cuts to social care.

Over the whole period, spending grew by 4.1% per year on average. Spending since 2009–10 has grown at a much slower pace. Between 2009–10 and 2015–16, health spending has grown by 1.3% per year on average, with spending under the coalition government (2009–10 to 2014–15) growing at only 1.1%. This was the smallest five-year growth rate since records began.

Institute of Fiscal Studies, UK Health Spending Briefing Note, 3 May 2017

https://www.ifs.org.uk/publications/9186

• ·       Theresa May has broken her promise on the energy price cap. It is weaker than what the Tories promised at the last election. Labour will introduce an emergency price cap of £1,000 to protect households

• ·       The Tories re-announcement on cutting stamp duty, without increasing the affordable house-building that Labour has promised, will only drive up prices, rather than help the millions of young people who want to buy a home of their own. The number of young home-owners is in free-fall but under the Tories the number of new low-cost homes for first-time buyers has halved and not a single one of the 200,000 'starter homes' promised has been built.

• ·       On the Tories’ watch the number of new homes for social rent has fallen to the lowest level since records began. The Tories now need to back the rest of Labour’s long term plan to build a million new truly affordable homes.

Theresa May made a number of false claims about Labour:

• ·       On the claim that “when you nationalise something, you pay for it twice”

Labour has been clear that we will deliver public ownership by issuing bonds in exchange for profitable assets. This incurs no cost to the taxpayer, by the standards of the ONS and international accounting standards. Furthermore, household bills will fall because billions will not be lost of dividends and excessively high interest payments.

• ·       On the claim that public ownership leads to decreases in investment

In the case of water, the investment that has occurred since privatisation has been financed through debt, not equity, and the cost of this will fall with the water companies in public hands. 

New publicly-owned companies will continue to be almost completely self-financing. This finance comes from from user charges and debt raised, subject to an authorised limit based on recurring annual income and cash available to pay financing costs, with occasional government grants e.g. for specific projects in the public interest.

• ·       On the claim that public ownership could cost £1tr

These are fantasy figures plucked from thin air by politically-motivated think tanks. The assumptions and methods they use bear no relation to reality, and they have no credibility whatsoever.

This figure appears to be based on the idea that market values or regulated Asset Value should be the starting point for compensation. There is no reason why this should be the case.

Parliament may also seek to make deductions for compensation on the basis of: pension fund deficits; asset stripping since privatisation; and state subsidies given to the privatised water companies since privatisation.

• ·       On the claim that workers wouldn’t be shareholders

All employees of larger firms will be entitled  to shares held collectively in an ‘Inclusive Ownership Fund’. As equal partners in the fund, all employees will be guaranteed a payment from the Fund equivalent to their share of ownership and to elect the Board of Trustees to administer the Fund. Workers are collective shareholders and collectively have full shareholder rights.

• ·       On the claim that worker ownership would impact on share prices and private pensions

Pension funds today hold a tiny proportion (3 per cent) of all UK equity and that is declining part, so the impact on pension funds will be absolutely minimal. Even without the benefits of worker ownership on company performance and assuming average growth, modelling of the scheme shows that shareholders will make good the impact of share transfers to the inclusive ownership fund inside of a year.

• ·       On the claim that worker ownership would make the UK unattractive to invest in

Our plans will not deter companies from investment because costs for existing shareholders will be small, because the rate of share dilution will be low, and that rate will be linked to the rate of profits being made. UK companies are currently not investing as much as they could, and this policy will create a clear focus on the long-term health of companies to drive up investment.