Tough times and tougher choices

It’s been no big secret that the new Labour Government would receive a tough inheritance from their predecessors. National debt, local councils in crisis and collapsing public services to name just a few areas of significant headaches for Labour after 14 years of Conservative rule. Keir Starmer had warned during the General Election campaign that his government would have to make “tough choices” upon entering Downing Street and an end to ‘sticking plaster politics’.

But just how tough will these choices be?

The Autumn Budget on 30 October will reveal the extent of the challenges the country faces. Many already suspect that the reality will be even worse than what was previously feared. The Prime Minister appears to be on a drive to push expectations through the floor. His warning speech from the symbolically juxtaposed Rose Garden which sought to prepare the public for what is to come.

He repeated the line that those with the “broadest shoulders should bear the heavier burden” but fell short of specific policy framing while leaving no doubt that tax rises are coming.

But with Labour’s commitment to avoid taxes on ‘working people’, there remain few options for the Chancellor. Pensioners will have their winter fuel allowance means tested, those paying private school fees will be expected to pay VAT and there is an expectation that capital gains tax will be too tempting to avoid raising.

The most potentially explosive reform would be that of council tax. A 0.5% wealth tax replacing rates banding based on 1991 property values would deliver a more equitable funding mechanism for local government and be welcomed by Labour rank and file.

But the prospect of tripling council tax for many residents in London boroughs would cause plenty of headaches in Labour’s back yard and provide opposition parties with self-drafting campaign attack literature at every local election for the rest of this parliament.

The prize of a successful reform of council tax would be putting local government on a solid footing.

Such an outcome could move public attitudes significantly if the services that impact their daily lives (potholes, bins, schools etc.) appear to be turning a corner by the time of the next election.

But will this be a ‘tough choice’ Labour have the stomach to make, or will sticking plaster politics prove to be much stickier than even Keir Starmer could have imagined.