The UK has a grossly financialised economy, heavily overbalanced towards the South East. Our industrial sector is uncompetitive, we have uncomfortable and dangerous levels of inequality, and whole sections of our younger generation are virtually excluded from the housing market. Our National Health Service is struggling to cope with current and increasing demand on its services. If this wasn’t enough, we also have to cope with the uncertainties of Brexit and the looming and inescapable problem of climate change. Against this context, the current neoliberal emphasis on shrinking the state is quite misplaced, if not dangerous. Instead, fixing these issues requires a new approach to our economy. Here are six policies that would help kick start the necessary transition.
1. Introduce a Land Value Tax
The introduction of a tax on the value of land and property would tick many boxes. Land provides a huge taxable base – it is the classic commodity that cannot run away. Taxing land would have an immediate effect taking the heat out of the South East property bubble, so helping to correct regional imbalances. It would also have a big impact on land hoarding, and could be tailored to discourage non-resident holders of land, or holders of land who are not natural persons
2. Reform public procurement
Public procurement is now widely recognised as being the driver of new technology and innovative high tech companies – witness how the US has directed its public procurement programme to transform our world and its own industrial base. But this doesn’t just happen naturally. It is not enough to go to the private sector with lots of money. Instead, what is required is intelligent procurement: that is, actively identifying the needs, and driving the development process, (either within the public sector, or in close relation with the private sector), until the new innovations are ready to be rolled out. This is the opposite of how the UK’s hollowed out state conducts public procurement. Initiatives like PFI have resulted in financial innovation for the benefit of the financial sector, often not even based in the UK. Instead, we need a new technology based policy focused on transforming the UK economy. One of the key priorities should be developing technologies related to addressing climate change.
