Your fair and balanced guide to the draft Labour manifesto

Jeremy Corbyn's draft manifesto was leaked to the national press last night
Jeremy Corbyn's draft manifesto was leaked to the national press last night

By Chaminda Jayanetti

"Back to the 70s!" goes the cry from the usual suspects. The dramatic leaking of the draft Labour manifesto last night provoked a frenzied response from right-wingers aghast at pledges to raise corporation tax to their 2011 level and restore state ownership of a company that was state-owned three years ago.

But what's in the manifesto? What's been left out? How will it work, and what does it all mean?

Away from the front page hysteria, let Politics.co.uk tell you what's really happening - how Corbyn seems to have accepted some benefit cuts, how Labour's NHS funding doesn't fill its black hole, and how its bold plans on workers' rights and education still leave plenty of questions unanswered.


NHS

  • £6bn extra annual funding raised through higher income tax for the top five per cent of earners and higher tax on private medical insurance
  • Extra capital funding
  • Halt the 'Sustainability and Transformation Plans' (STPs) which are looking at closing services across England, with the plans redrawn "with a focus on patient need rather than available finances"
  • Reverse NHS privatisation and repeal the Health and Social Care Act
  • New legal duty on the health secretary and NHS England to ensure that "excess private profits are not made out of the NHS at the expense of patient care"
  • Ring fence mental health budgets
  • £250m annual fund focused on children's health

Significantly, Labour isn't planning to scrap STPs outright - instead it wants the plans redrawn so they respond to patient need rather than savings targets. This reflects the fact that many health experts believe there are benefits for patient care in centralising services away from smaller hospitals - the Labour manifesto is trying to save the baby but ditch the cuts-driven bathwater.

Reversing NHS privatisation is a vague pledge, however - does that mean scrapping PFI contracts? Ending the use of private hospitals for NHS procedures? Bringing support services such as cleaning back in-house? Stopping NHS offering private care to fee-paying patients? And what of the growing trend for NHS GPs to offer 'queue jumping' at a price?

And pay special attention to that £6bn per year of extra funding. How far will that actually stretch? In 2014 NHS leaders forecast a £30bn funding shortfall by 2020/21 if no efficiency savings were made, or a £16bn shortfall if savings were made at their historical rate. Last year the accountancy body Cipfa forecast a £10bn black hole by 2020. Labour's extra funding seems to fall well short of all these figures.

Takeaway: Extra money, fewer closures and less privatisation - but will it still leave a financial black hole?

Social care

  • Create a National Care Service during a first term in government, following public consultation and in partnership with providers and commissioners - including consulting on options for sustainable funding
  • Provide an extra £8bn for social care over the lifetime of the next parliament, including £1bn in the first year
  • Work with councils to end 15 minute care visits and ensure care workers are paid for travel time
  • Increase the Carer's Allowance for unpaid full-time carers to match the level of JSA

The social care sector is in a state of near collapse. Labour's pledge of £8bn over five years is far more than the Conservatives' Budget pledge of £2bn over three years - but both figures are stopgaps for a fundamentally broken and fragmented system, and both parties recognise the need for a new funding system.

Labour doesn't yet know what the funding system would be - but that's forgivable in a context where nobody does.

Takeaway: The extra funding is urgently needed, but a new National Care Service must carefully balance state provision with the wishes of those who want to take more control of their own care

Housing

  • By the end of the next parliament, build at least 100,000 council and social houses a year for "genuinely affordable" rent or sale
  • Make house-building a priority for Labour's proposed national infrastructure fund
  • Give councils new powers to build housing, with an end to the ban on long-term council tenancies
  • Protect the green belt
  • Start work on a new generation of New Towns
  • Insulate more homes and implement minimum space standards for new housing
  • 4,000 new homes for people with a history of rough sleeping
  • Rent hikes to be capped at levels of inflation, with secure three-year tenancies encouraged
  • Thousands of new-build homes reserved for first-time buyers, and local first-time buyers to have 'first dibs' on new homes built in their area

Building 100,000 council and Housing Association homes every year would be a meaningful step towards addressing the London housing crisis, but few experts believe it's a realistic target - the logistics of building that many houses are daunting, and it seems more of an 'aim high, shoot lower' ambition.

Protecting the green belt whilst resolving the housing crisis is a pipe dream - given the huge need for new homes in and around London, there aren't going to be enough brownfield sites to go round.

That said, committing to building council housing is refreshing. After years of Labour and Tory governments coming up with whizzbang schemes to try and make housing affordable, Corbyn simply wants to go ahead and build affordable council homes.

Takeaway: Building 100,000 genuinely affordable homes a year might be unachievable, but there's no harm in trying to achieve it

Welfare

  • Scrap the benefit sanctions regime
  • Scrap the bedroom tax
  • Bring back housing benefit for under-21s
  • Scrap cuts to bereavement payment support
  • Review cuts to work allowances in Universal Credit and the recently imposed two-child limit
  • Scrap the WCA and PIP disability benefit tests and replace them with a personalised process
  • Increase ESA disability benefit by £30pw for those in the work-related activity group
  • Restore legal aid for family courts and judicial reviews

Labour's decision not to oppose the Welfare Reform Bill in 2015 did more than anything else to propel Jeremy Corbyn to the Labour leadership - welfare cuts are a totemic issue for many of his supporters.

These pledges, however, appear to be on the limited side. Scrapping the bedroom tax and restoring housing benefit for young people are important moves, but have the handy bonus of not costing billions to do so. Scrapping benefit sanctions won't have an easily definable impact on the public purse either - and all these measures will ultimately save money elsewhere.

But there does not appear to be a commitment to scrap or pare back the welfare cap, or cuts to council tax benefit. Cuts to Universal Credit work allowances and the two-child limit are to be "reviewed", perhaps reflecting the speed with which this manifesto has been put together. A whole raft of cuts to tax credits and housing benefits enacted under the coalition appears to pass untouched.

It may sound pedantic - but if Corbyn's leadership isn't reversing cuts to benefits, some might ask what it's all for.

Takeaway: Labour plans to reverse quite a few benefit cuts - but doesn't seem to be planning to reverse quite a few others

Tax

  • No rise in VAT or personal National Insurance contributions
  • No rise in income tax for those earning under £80k a year
  • Income tax to go up for those earning more than £80k
  • Corporation tax to rise to 26%

Labour's manifesto is not so much 'tax and spend' as 'tax the rich and spend'. But soaking the rich may leave many voters with an impression of Labour as a high-tax party, even if they themselves won't be affected.

Nor do we yet know by how much income tax would go up for those on more than £80k - if it rises too far, high earners might start leaving.

The party is banking heavily on corporation tax revenue to fund its myriad spending proposals, especially in education. Corporation tax - which is charged on companies' profits - is scheduled to fall to 17% by 2020. Labour will instead increase it to 26%.

The IFS says this could raise £19bn in 2021/22, but would probably bring in less due to foregone investment. On the other hand, corporation tax was 26% as recently as 2011, so it's certainly not a 'return to the 1970s'.

Smaller companies would not see any corporation tax rise under Labour's plans.

Takeaway: Labour says it will fund its spending plans by protecting the many and hitting the few - but will voters make that distinction?

Business

  • Government to invest £250bn over ten years in transport, energy and digital infrastructure
  • New regional development banks to provide long-term lending to small businesses for high-risk research and development
  • "Systemically important" key businesses to be legally protected from hostile takeovers
  • Public contracts will only be awarded to companies with no more than a 20:1 ratio between the highest and lowest paid staff
  • Introduce an excessive pay levy on companies with "high numbers of staff on very high pay"

The Tories are working on an industrial strategy, and Labour now has its own. Labour's plans involve borrowing to invest in infrastructure and corporate research and development - although critics may question why the government should take on risky investments that experienced private lenders and investors won't.

Aside from that, how the 20:1 pay ratio is defined matters - if it doesn't include subcontractors and outsourced staff, then low-paid staff can simply be outsourced, but if it does include them then monitoring and enforcing this could be challenging. But politically it is covering ground that all main parties are toying with.

The excessive pay levy is very vague - and given the plan to raise income tax on the rich, not obviously necessary.

Takeaway: Regional development banks require levels of government borrowing that  the public might take fright from, no matter what the promised returns

Workers' rights

  • Bring in a 20-point plan for security and equality at work
  • Roll out sectoral collective bargaining, where trade unions and employers negotiate pay deals covering entire sectors of the economy
  • Creating a Ministry of Labour to enforce workers' rights, with trade union involvement
  • Workers will be assumed to be employees (with more employment rights) unless the employer can prove otherwise
  • Ban payroll companies, which limit employers' tax liabilities and employment rights
  • Give all workers equal rights from day one, whether part time or full time, temporary or permanent
  • Ban zero hours contracts, so all workers get a guaranteed number of hours each week
  • Ensure employers don't undercut British workers with cheaper recruits from abroad
  • Guarantee trade unions access to workplaces to speak to members and potential members
  • £10 an hour minimum wage by 2020 and scrap the public sector pay cap
  • Ensure all takeover proposals have a clear plan to protect workers and pensioners
  • Ban unpaid internships
  • Abolish employment tribunal fees

This is an extraordinarily broad and bold commitment to workers' rights that is unparalleled in modern politics. Labour have taken the view that many problems in Britain are rooted in the unequal power relationship between employers and workers. Their view is correct.

This is not a return to the 1970s, however - there's no return to strikes without ballots and the closed shops of the Red Robbo era. Instead, sectoral collective bargaining - a policy suggested by Owen Smith in his leadership bid last year - would enable collective pay agreements to be secured in the sort of insecure, low-paid private sector work where bottom-up unionisation is difficult. By using the collective force of numbers, the bargaining power of workers will be increased.

But if these sectors have low levels of unionisation, how can trade unions represent those who work in them?

Banning zero hours contracts will go down well with some, but Matthew Taylor's government-commissioned review is already looking at improving the rights of the self-employed, and his suggestion of a higher minimum wage for zero hours contracts is a more focused tool for tackling abuse of the system.

Also, while shrill business lobby warnings about workers' rights are nothing new, granting full employment protections from day one would surely dent the willingness of employers to take on new staff, especially those not already known to them through personal and professional networks.

Takeaway: Nobody who supports cutting immigration to drive up wages can criticise collective bargaining to drive up wages as well - but while the objective is an important one, there are significant unanswered questions

Education

  • Create a National Education Service, funded from higher corporation tax, to offer free opportunities for lifelong learning and training
  • Free school meals for all primary school children in England, funded by VAT on private school places
  • Free childcare for all two-year-olds and eventually some one-year-olds
  • Eventually replace childcare subsidies to parents with direct subsidy of childcare places
  • Cap class sizes at 30 for 5-7 year olds
  • No cuts to school funding

The Bevanite language of the National Education Service is a throwback, but the objective is a modern one - to enable greater opportunities for retraining and skills development for the workforce.

The Conservatives are also putting more money into adult education - suddenly this forgotten field is political prime real estate. But simply giving more money to existing providers is easier than fusing those providers into a new state service.

Takeaway: Labour is going for a big, bold idea, but more detail is required on how it would work in practice

Universities

  • Abolish university tuition fees
  • Reintroduce maintenance grants for students

Labour introduced tuition fees in 1998; now it is pledging to get rid of them. Critics dismiss abolition as an expensive middle class subsidy. But estimates suggest 20-30% of student debt racked up under the current £9,000 fees will never be repaid, and many other European countries have kept higher education free.

The Conservatives turned maintenance grants for students into loans, adding more debt to the system; restoring grants and expanding their provision will probably do more for student finances than abolishing the fees themselves.

Takeaway: A policy with symbolic importance for Corbyn and the Labour left which fits into their plan for a lifelong free National Education Service

Pensions

  • Commit to maintain the 'triple lock', ensuring that throughout the next parliament pensions will rise by at least 2.5% a year, or higher in order to match inflation or pay growth
  • Retirement age to be capped at 66 instead of rising to 68, with a new flexible retirement age to be considered

Labour is miles behind the Tories among pensioners - their solution is to copy a Tory policy that the Tories themselves are considering abandoning.

The triple lock doesn't come cheap - an estimated £4bn a year more than raising pensions in line with inflation and pay growth - and the manifesto doesn't appear to say where the funding would come from. If inflation rises, then the comparative cost of the triple lock will fall.

Takeaway: A lunge for the 'grey vote' that is unlikely to succeed - pensioners like May and don't like Corbyn

Energy

  • Immediate energy price cap so that the average dual fuel household bill stays under £1,000 a tear, "while we transition to a fairer system"
  • Renationalise the energy transmission and distribution grids
  • At least one publicly owned energy company in each region of the UK
  • 60% of energy generation to be from renewable sources by 2030

Labour does not appear to be looking to nationalise the 'Big Six' energy suppliers, which would be expensive and involve buying  out foreign government shareholders. Instead, it will create publicly owned regional energy firms, with the intention that they cut prices, support community energy projects, and force bigger energy firms to lower their own tariffs - effectively using the state to bring greater price competition to the market.

Whether the government has the wherewithal to pull it off, especially if the big suppliers undercut the public firms to starve them of market share, is an open question.

Takeaway: Energy privatisation is a shambles that has failed on every count - Labour's plans are bold, but represent a newer approach than the 1970s comparisons would suggest

Railways

  • Bring privatised rail franchises back into public ownership as they expire
  • Once in public ownership, freeze fares, introduce free wi-fi across the network, ensure safe staffing levels and end driver-only operation
  • Improve disabled access
  • Complete HS2 from London into Scotland

You can find a queue of wonks, technocrats and Labour centrists begging to tell you how privatised rail is cheap, efficient, performs well and invests wisely. You'll struggle to find many passengers who'll say the same.

A Labour government would need to be ready for a string of expiring franchises coming thick and fast before 2022 - the Department for Transport would have to be rapidly prepared for its new role running the railways. Network Rail, the state-owned company that maintains the track, is not exactly a runaway success.

Nor is it clear whether Labour has done the costings for its staffing plans, given that it wants to freeze rail fares at the same time.

Still, nobody will miss Southern Rail.

Takeaway: Labour would need to be quick off the mark to ensure renationalisation didn't turn into as defining a failure as privatisation was for John Major

Community amenities

  • Renationalise Royal Mail at the earliest opportunity
  • End the closure of Crown Post Office branches
  • Set up a commission to establish a Post Bank, owned by a the Post Office and providing a full range of banking services to the local community
  • Strengthen community powers to protect Post Offices, as well as community pharmacies, high street banks, local pubs and independent shops
  • Ban local bank branch closures where there is a "clear local need" for them to remain open
  • Promote measures to decrease high street vacancies

Renationalising Royal Mail is an odd pledge - it was a botched sale and the postal workers' union clearly wants it reversed, but how much public demand is there for it?

Creating a Post Bank meets the left's desire for more publicly run banking providers. The powers to protect local amenities are vague but could in theory allow communities to 'take back control'.

Takeaway: Renationalising Royal Mail will raise a few eyebrows - it's not an issue that's likely to come up on the doorstep

Immigration

  • No immigration cap, but supports "controlled" immigration
  • Replace the minimum income threshold on non-EU spouses with an obligation to live in Britain without relying on benefits
  • Crackdown on employers who undercut wages with migrant labour, or recruit workers solely from abroad

Jeremy Corbyn does not want to spend his time arguing about immigration.

Takeaway: "Let's talk about something else, alright?" If only.

The deficit

  • Eliminate the current budget deficit, on day-to-day government spending, on a rolling five-year timescale
  • Reduce debt as a share of "trend" GDP by the end of each parliament
  • Allow borrowing to invest in infrastructure

According to George Osborne in 2009, Britain would soon be bankrupt if he didn't achieve his deficit targets. He didn't. It isn't. Nobody cares.

Except they do care when Labour's name is mentioned, so this is a fully costed manifesto - although it doesn't yet have full costings.

And there's a deficit pledge. Which might be met. Or might not. Who's even counting anymore?

Takeaway: Voters who care about the deficit won't touch Corbyn's Labour party. In other news, we'll still be talking about the deficit in 2047

Conclusion

This is an ambitious and bold manifesto from a party leader with nothing left to lose. His supporters will enthusiastically welcome it. Cynics may dismiss it as a meaningless wish list given Labour's standing in the polls.

There are significant unanswered questions, notable omissions, and little detail as yet on how it would all be funded. If Labour were unexpectedly elected next month, it's frankly unlikely that it would be able to roll out so many large scale policy initiatives while the civil service is buried neck-deep in Brexit.

But parts of the 1983 'suicide note' manifesto eventually found their way onto the statute books. Theresa  May is stealing Ed Miliband's agenda. Don't be surprised if sections of the Corbyn manifesto one day appear on the agenda of a government not led by Jeremy Corbyn.

Chaminda Jayanetti is covering the general election for Politics.co.uk. He tweets here.

The opinions in politics.co.uk's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.

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