Ed Miliband

An Attractive Alternative: is that too much to ask?

In the couple of months that have passed since the election, I find myself increasingly despondent with our hopes for the future. It seems I’m not alone in this. I started writing this post over a month ago, but buried it for fear of seemingly like a stereotypical lefty crank. But even the Noble and Learned Baron Mandelson seems to share my despondency, so I felt, perhaps, it was worth commenting further upon the Leadership election presently underway within the party.

We are repeatedly told that the Labour Party has failed to “learn the lessons of the past” – which is true. Unfortunately for us, far too many people who are keen to learn those lessons have been going to the wrong classes altogether.

In the 2015 General Election, Labour suffered a double whammy, losing support on our right – to the Tories and UKIP – and on our left – primarily to the SNP, but also to other parties too. This poses a dilemma to the party. In the past we’ve suffered losses at either end, but never before in recent memory have we suffered both at the same time. How do we address this? The fact that losses to our right occurred primarily in England, and losses to our left occurred primarily in Scotland has led people to the obvious, but incorrect, answer that we need to move to the right in England, and to the left in Scotland – and that only a total separation between Scotland and England enables this.

Chasing voters is the most cynical – and usually lest effective – way of doing politics. “People are voting for X, so if we’re more like X then they’ll vote for us instead.” This is utter nonsense, and Scottish politics illustrates this. In response to a sizeable number of former Labour voters voting for Scottish independence, Jim Murphy sought to woo them back by being more “patriotic”. But if you’re voting for the SNP because you’re an existential nationalist, why on earth would you vote for Labour because they’re a bit nationalistic, but nothing like as much as the SNP? The answer is, of course, that you wouldn’t.

Nonetheless, this is the exact same approach that is advocated by fellow vote-chasing cynical Blairite, Liz Kendall. Kendall’s answer to Labour’s lack of electoral appeal is to, as Yvette Cooper put it, swallow the Tory manifesto. But think about this from the same perspective as above. If you support the Conservative position on most things, why would you vote for a party that’s basically the same, just a bit less so? The answer, again, is that you wouldn’t.

The need for an alternative

Opposition parties are at an incredible disadvantage. Not just in terms of resources (although having the machinery of the civil service to work out your policies for you is an undoubted advantage over reliance upon Short-Money staffers) but because Britain is an inherently conservative country. That is not to say that the majority of Britons are ideologically right-wing, but that we are inherently suspicious of change. That suspicion can be overcome, but the strong presumption in the minds of British electors is that the devil you know is always preferable.

So the first task in winning elections from opposition is persuading voters to defy their conservative tendencies and agree that an alternative to the present government is desirable. Sometimes you can get lucky – as Tony Blair did – and find yourself up against a government of whom the electorate have grown so tired that you barely have to make this argument. David Cameron, too, arguably benefitted from such a sentiment, as did Wilson in 1964 – this alone is not enough to propel you to Number 10. Labour was undoubtedly making this case well in the late 80s, which largely spurred the Conservative Party – and subsequently the electorate – to agree that a change was needed (which, unfortunately for Neil Kinnock, was not him). Similar observations could be made of Tony Blair’s Government in 2005. On both occasions incumbent governments of whom the electorate had grown tired were not challenged by alternatives that the electorate found remotely attractive.

In 2015, contrary to the “Red Ed” dogma that appears to permeate the Blairite right since the election, Labour’s economic message was, in fact, a conservative one. There can be little doubting that we accepted the premise of the Conservatives economic message. Our own economic position was “we’ll be basically like the Tories, but shitter at it”. For this reason, we fundamentally failed the first test for winning elections from opposition – that we need an alternative. If you believe that the Tories’ approach to the economy is the right one, then why on earth would you vote for Tory-lite? Why have the shandy when you can have Special Brew? On this basis, Labour fundamentally failed to persuade the electorate that an alternative to the present government’s approach was either needed nor desirable.

Therefore, once you have achieved the difficult task of persuading the electorate that an alternative to the present government is required, you then have to persuade them that you are an appealing alternative. The prerequisite of this step, is that you actually have to be an alternative.

The need for an appealing alternative

Having made it through stage one – either by accident or by design – it then follows that you have to adequately meet the second test. That is to say, that the electorate, now convinced of the need for an alternative to the present officeholders, have to believe that you are the alternative that they crave. Failing this second test will result in people either plumping for what they know, or those who crave a change looking elsewhere. So it’s not simply enough to be an alternative, you have to be an appealing alternative.

In 2015, Labour suffered the catastrophic double-whammy of failing both tests.

As I detailed above, by the mid-90s Labour did not have to do very much to persuade voters that an alternative was required. However, for all he was painted as a centrist, Tony Blair’s Labour was distinctive to an extent. In the same way that Wilson focused on technology and modernisation, New Labour – at the very least – embodied an energetic renewal of Britain’s stuffy politics. It wasn’t radical, though it was distinctive; and, crucially, New Labour smacked of managerial competence and personal appeal – which by this stage was the exact antithesis of John Major’s government.

It is not necessary to stray particularly far onto your opponents’ political turf in order to win office. For all his critics on his own side might have decried him for being the ‘Heir to Blair’, there has never been much doubt that David Cameron is planted firmly on the political right. Certainly, Margaret Thatcher never felt it necessary to embrace any part of the Labour platform in order to win office, and comfortably retain it.

I do not advocate being a particularly radical alternative, but an alternative that is appealing. Our platform in 2015 was anything but appealing. Our offering to the public was composed of a handful of minor platitudes to the left and right. The gist of the 2015 manifesto was:

  • “Banning zero-hours contracts” – except that hardly anyone is actually on a zero-hours contract and a lot of the people who are, it turns out, actually quite like them;
  • “Ending the bedroom tax” – a noble pursuit, except, again, it’s something that hardly anyone has actually been affected by;
  • “Cutting tuition fees from £9,000 to £6,000? – we’re going to cripple students with *slightly* less debt;
  • “NHS” – Britain’s answer to motherhood and apple pie.

Where is the appeal to the masses? Where is the distinctive position? It’s certainly a long way from the radical platforms upon which the governments of 1945 and 1979 were elected.

Is all lost for the Kendallites?

Those adherents to the Kendall-cause aren’t entirely without hope. It might well be that – for reasons unrelated to policy – the present conservative government might become so unpopular that the electorate seeks out another conservative government – just one that isn’t run by the Tories. But unless it transpires that David Cameron is a serial killer, or George Osborne utterly corrupt (which, they’re not), or Boris Johnson a serial philander (on which point I offer no comment) then the Liz Kendall approach to leadership – which is, ostensibly, following voters – is doomed to failure.

We cannot win elections by chasing voters and, worse still, following our opponents. It may be an article of faith to the Blairites in England, and the Trots in Scotland, but the mountain cannot come to Mohammed. To win again, we need first to convince electors that an alternative to the approach of this Conservative government is required – something you cannot do by emulation. We then need to persuade voters that we are the alternative that they crave, and we cannot do that with insipid, piecemeal policies aimed at a fraction of a percent of voters at a time.

What we need is an appealing alternative. Is that too much to ask?

Pasties for all! But get your hands off those Coco Pops…

It comes as little surprise that the Labour Party front bench works on a one-week basis, with little regard to consistency of message or coherent policy making, but today’s policy of the day (doubtless dreamt-up this morning over a bowl of granola and grapefruit) couldn’t help but make this author chortle.

Last year, this blog featured a defence of the Government’s so-called “Pasty Tax”. In addition to the various good tax-economy reasons for the proposed budgetary measure; taxing pies, pasties, and sausage rolls made good sense as they’re generally bad for you and their consumption ought to be discouraged. Of course, the two Eds clearly disagreed – visiting a Greggs to highlight the fatty, salty, pastry goodness of a good meat pie.

How, therefore, does this square with Shadow Health Secretary Andy Burnham’s call, today, for unhealthy breakfast cereals to be banned? It is undoubtedly concerning that breakfast cereals targeted at children could contain as much as 40% sugar. Burnham’s proposal (which isn’t a ban, but a modest cap of 30% on the amount of sugar in a breakfast cereal) is a welcome contribution to the debate as to how to tackle the UK’s woeful health record. But perhaps Mr Burnham should have a word with his bosses before they next get a greasy whiff of an opportunity to score a cheap win over the Government by endorsing the virtues of the foods that are high in salt and almost 25% fat.

In defence of the “Pasty Tax”

The Value Added Tax Act 1994 provides that food is generally zero-rated for VAT purposes, except for food which is provided in the course of catering and other specific exempt or zero-rated items. Food in the course of catering includes all food to be consumed on-premises and hot food to be consumed off-premises. Hot food is defined as:

Food which, or any part of which—

(i) has been heated for the purposes of enabling it to be consumed at a temperature above the ambient air temperature; and

(ii) is at the time of the supply above that temperature.

Such a definition therefore excludes food which is incidentally hot by virtue of being freshly baked – such as pies, pasties and sausage rolls of the sort which you would purchase in a Greggs bakery shop.

The 2012 Budget however proposed a new definition of hot food:

“Hot food” means food which, or any part of which, is above the ambient air temperature at the time it is provided to the customer, other than freshly baked bread.

Crucially, such a definition catches Greggs pasties, and hence the “Pasty Tax” was born.

On Monday 28th May 2012 HM Treasury announced that following the consultation period on VAT measures announced in the 2012 Budget the proposed revision of the definition of “hot food” shall not be implemented. The so-called “Pasty Tax” caused a political uproar. The Prime Minister was forced to recollect the last time that he had consumed a pasty (which he failed to accurately so do) while the rest of us were forced to endure a staged visit to a Greggs by Ed Miliband and Ed Balls.

However, the proposed revision to the definitions contained within VAT Act made sense, both in terms of public policy and tax efficiency. I offer, therefore, a defence of the Pasty Tax.

Pasties are generally bad for you and their consumption ought to be discouraged

Public policy has for some considerable time tended towards discouraging the consumption of things that are bad for you. In the past this has been achieved largely by levying high levels of excise duty on tobacco and alcohol. Scotland has recently enacted a minimum price for alcohol, in order to prevent supermarkets from selling alcohol as a loss leader, while the UK Government is consulting on similar plans for England.

Denmark enacted the world’s first “fat-tax” on retail sales of items with a saturated fat content of higher than 2.3%. David Cameron himself has publicly countenanced such a tax for the United Kingdom. I remain sceptical about the merits of such a tax, however it does seem reasonable, given the political will to use fiscal means to influence consumption, to end a VAT exemption which chiefly benefits pies, pasties and sausage rolls*.

The “Pasty Tax” removes an arbitrary distinction in law

VAT law is full of anomalous and seemingly arbitrary distinctions. Such distinctions are inevitable if you operate a series of zero-ratings and exemptions, as the UK and Ireland do.

For example, if I sell you a ham and cheese sandwich (from my VAT registered delicatessen) it comes zero-rated for the purpose of VAT. Unless, however, you choose to eat your sandwich in the seating area in my delicatessen, in which case I’d have to add on VAT at 20%. If I pop that ham and cheese sandwich into a toasting oven and sell you a ham and cheese toastie then it would be subject to VAT at 20% regardless of where you intended upon eating it.

If your cold sandwich to take away comes with a packet of crisps on the side then the sandwich is VAT free but the crisps are chargeable at 20%. If you ask me to put the crisps on the sandwich (which is delicious, by the way) then the whole sandwich, including the cost of the bread, butter, cheese and ham, is chargeable at 20%.

Unless, of course, the crisps are Pringles – which aren’t crisps at all, they’re cakes** – which are VAT free. Which makes them unlike Jaffa cakes, which aren’t cakes – but biscuits. Some biscuits are free from VAT however Jaffa Cakes are liable for VAT at 20% as – crucially – they have chocolate on the top. Similarly, a Plain Hob Nob will be VAT free but a Chocolate Hob Nob is chargeable at 20%.

The point of the above soliloquy is to demonstrate just what an odd beast VAT can be at times. In the case of hot pies, pasties and sausage rolls the law at present prescribes that food which is freshly cooked and intended to be sold for consumption at that point is chargeable for VAT. However, food that is only hot by virtue of having been freshly cooked and is in the process of cooling down is zero-rated – even if it is freshly cooked and piping hot. Food that has cooled down substantially but is still being kept warm by a hot lamp or cabinet is standard rated, however if it is not being kept above the ambient air temperature then it’s zero-rated.

The result is that when you go to a chip shop and buy a freshly cooked battered sausage it’s standard rated, while if you go next door to Greggs that freshly baked sausage roll is VAT free. This distinction gives a clear advantage to one of these two enterprises both of which are engaged in substantially similar trades.

Justification for this distinction could be made on public policy grounds if we somehow wished to encourage the consumption of pies, pasties and sausage rolls. However, as I discussed above public policy has tended away from favourable treatment for any unhealthy foods.

One is therefore led to the conclusion that there is no good justification for the favourable tax treatment of pasties, and thus that the “Pasty Tax” is justified – both on grounds of tax efficiency and of public policy.

*For the record: I love pies, however my favoured choice of pie – a Melton Mowbray Pork Pie – has always been free from VAT.