Weekly Blog - 12 July 2024 - First 100 Days

First 100 days

The general election in the UK last Thursday 4 July brought the Labour Party into government with a huge majority of 411 out of 650 seats. The new government has hit the ground running, but there are huge challenges ahead on the economy, public services, international peace and stability, and the environment. In time honoured fashion, this week’s Arise weekly blog sets out what Arise would like to see from the new government in its first 100 days, on building a green and fair economy (the focus of our 4 Shifts campaign), and on supporting democracy and human rights (the focus of our Reform Movements campaign).

Four Shifts for a green and fair economy

Our current UK and global economy has over decades created the jobs and wealth that have lifted millions of people out of poverty. However, it has done so off the back of fossil fuels and overconsumption of natural resources, driving an enormous environmental crisis which threatens to overwhelm and undo all those gains. Furthermore, since the 2008/9 financial crisis, and most recently with the cost of living squeeze, the economy has increasingly not been working for more and more people across society, and the gap between rich and poor has grown greater with every passing year. Arise’s 4 Shifts campaign sets out the crucial 4 Shifts that are needed to rewire our UK and global economy so it still creates the jobs and wealth that lift people out of poverty, but does so without relying on fossil fuels and the overconsumption which is wrecking our planet. How do the new government’s policies compare with these shifts, and what more is needed in their first 100 days?

Shift 1: Clean energy

To tackle the dire emergency of global climate change the UK and every nation needs to take urgent steps to scale down the use of fossil fuels to zero emissions and scale up clean energy to 100% by 2030, banning the future use of fossil fuels and doing this in every sector (energy, transport, building, industry etc.) Such urgent economic change seems radical, but it is what is required if we are to avoid the worst impacts of climate change, and it is entirely possible. We have an excellent example from our very recent history. In 2020 in response to the Covid 19 pandemic, huge public and private funds were invested in vaccine development, enabling vaccines that would usually have taken years or even decades to develop, to be produced in a matter of months, and mass vaccination of the entire population to be rolled out. In addition, rapid and radical policies like nation-wide lockdowns and mass testing were introduced. A huge furlough scheme protected jobs, businesses and the national economy. The army was called on for key roles. Whole new hospitals were built within weeks. Core workers were prioritised, protected and supported. And in the midst of all this, the nation came together in solidarity behind the government to respond to a national emergency. That is the kind of ambition and rapid action that we need in the UK and every nation to address global climate change. It would also be significantly beneficial for the economy as well as the environment, unleashing billions in investment and creating tens of thousands of new green jobs.

The Labour government does in fact intend to deliver a zero-carbon electricity system in the UK by 2030, and to drive this in part through the creation of a new publicly-owned energy company, Great British Energy, and a new National Wealth Fund, alongside other policies. These are important steps forward, but still further ambition is needed. That plan needs to be expanded out to include every sector not just energy generation – transport, heating/buildings, industrial emissions etc. In its first 100 days the government should …

Set out a clear plan for the UK to get to absolute zero emissions by 2030, and expand that commitment to cover not just power generation but all sectors (transport, heating/buildings, industrial emissions etc.).
Take that position beyond the UK to the international community too, and call for a raising of ambition to that level in all nations through the UN climate change talks.

Shift 2: Circular economy

Our current linear economic model uses polluting methods to extract, consume, and then discard natural resources faster than the planet can replenish them. This threatens not just God’s amazing creation, but also human society and existence itself, which is a fundamental part of that creation. We are deeply dependent upon a flourishing, healthy and diverse natural environment to provide the fresh water and food we need to survive, the clean air we need to breathe, the clothing we wear, the natural resources to build our homes and on which our economy is based. We must shift to what experts call a circular economy. Just as God designed his creation so nothing is wasted in nature but gets broken down and reused in the biosphere, a circular economy would eliminate all pollution, overconsumption and waste and push resources back around the economy in a circular fashion, moving us back into balance with creation as God intended. The UK and every nation should agree new circular economy laws that ban all polluting activity, further human expansion into wild lands, the production of natural resources that takes out more than it puts back in, and all waste. As with the urgent action required on climate change above, this sounds radical, but is entirely possible, and indeed is in our own economic interests too.

The Labour government does in fact intend to ‘clean up rivers, lakes and seas’, ‘ensure nature recovery’ and move Britain to a ‘zero waste economy’, amongst other things as part of its policies. It will also continue with the draft Producer Responsibility Obligations Regulations 2024, published by the previous government in May, which will significantly tighten up the responsibilities on companies to reduce packaging and waste. Again, these would be good first steps but they don’t go far enough. The new government needs to set out a specific target date of moving the UK to a zero waste economy by no later than 2030. It also needs to expand this ambition to also include ending all polluting activity, ensure protected status for all wild natural habitats in the UK’s land and seas, and banning all unsustainable production. In its first 100 days the government should …

Set a target date for moving the UK to a zero waste economy of no later than 2030, and commit to expanding this ambition to also end all polluting activity, ensure protected status for all wild natural habitats in the UK’s land and seas, and banning all unsustainable production.
Commit to taking this ambition to the international community too, and call for a new global circular economy agreement to cover the same areas.

Shift 3: Strong and fair economy

Alongside the above two shifts to transition the UK and global economy to be green and sustainable, further shifts are still needed to ensure the economy is thriving and fair and working for all in society. The first of these is for the UK and every nation to have a proactive national industrial and economic development strategy. This should ensure governments takes a proactive and partnering approach, working with the private sector with intentionality to design the policies that ensure a thriving and fair national economy. The UK’s last industrial strategy ran from 2017 – 2021, since which the government has supported industry in a more ad hoc way.

The new Labour government does in fact plan to bring back a new industrial strategy. This is again a good start, but once more this is important not just for the UK, but for every country in the world. Therefore, in its first 100 days the government should …

Launch the new industrial and economic development strategy for the UK, and ensure it leads to good well-paid jobs with good conditions.
Through its foreign aid and international policies, the government should encourage and support every nation to develop their own industrial and economic development strategy.

Shift 4: Tax and social spending

It is crucial though, that all in society benefit from a green and fair thriving economy, not just the wealthiest. Inequality has been growing in the UK and around the world in recent years, and increasingly more and more people struggle to find decent well-paid jobs with good conditions. Meanwhile the cost of living has gone up dramatically, and the public services that so many rely on are struggling. Therefore, appropriately taxing the wealth generated through the national economy and providing essential services through public spending so all in society benefit, not just the wealthiest, is essential. Arise has conducted extensive research into how much the most successful countries with the healthiest economies and lowest levels of poverty and inequality collect in tax and spend on social services. As a result, the 4 Shifts campaign recommends that the UK and every nation should collect tax at an amount equivalent to at least 45% of the national economy, one third from income taxes, one third from wealth taxes and one third from other taxes, and spend at least two thirds of this on healthcare, education and social protection (pensions, benefits etc.).

In the last couple of years since the Covid pandemic, the government has collected about £1,095 billion in taxes (around 40% of the size of the national economy), and spent slightly more in public expenditure (around 44%). So the total amount of taxation and public spending is heading towards the right levels, yet the corresponding benefits are not being felt as widely as they should. This is because firstly the balance of where tax income is coming from, and secondly the balance of where it is spent, is skewed. Currently around 47% of tax comes from taxes on income (income tax, national insurance etc.) but only around 9% from wealth taxes (capital gains tax, inheritance tax etc.) and around 45% from other taxes (consumption taxes, business rates etc.), rather than a balance of a third each, that the 4 Shifts campaign calls for. This means income and taxes on products etc. are proportionately higher than they should be, whilst wealth (assets, finances etc.) is significantly undertaxed. Rebalancing the tax taken from these sources would mean the very wealthiest in society who can afford it, would pay proportionately more through taxing unearned and extreme levels of wealth. This would still be at very manageable levels, leaving them far wealthier than average citizens. Meanwhile taxation on earned income through hard work can be significantly decreased. Thus, by focusing mainly on rebalancing, rather than increasing, the total tax rate, ordinary people can be left significantly better off.

There is also rebalancing needed on the expenditure side too. The 4 Shifts report call for two thirds of public expenditure to be spent on health, education and social protection (pensions, benefits etc.) and a third spent on other kinds of government expenditure. Currently only 47% of public spending is on health, education and social protection, and of the other types of state spending a significant proportion is on interest and national debt repayments. A significant rebalancing is needed, providing a huge extra injection of cash into essential basic services that so many are dependent upon and again lifting up the lives of the vast majority of ordinary people and significantly reducing the inequality gap, together leaving ordinary people healthier, better educated and better paid. (There should also be a real focus on reducing that interest and national debt.)

The new government has taken some steps in this direction. They have committed not to increase income tax, national insurance or VAT, to make the tax system fairer, close the loopholes that allow wealthy non-domiciles to live in the UK without paying tax, and introducing a further windfall tax on the large profits of the fossil fuel energy companies. However, there is a lot further they could go to rebalance the tax and social spending system in the UK to make it work more effectively for all in society. In its first 100 days the government should …

Set out a revised budget to collect tax at an amount equivalent to at least 45% of the national economy, one third from income taxes, one third from wealth taxes and one third from other taxes, and spend at least two thirds of this on healthcare, education and social protection (pensions, benefits etc.).
They should also commit to taking this ambition to the international community too, and calling for a new global tax and social spending agreement for these levels in every nation, so all benefit.

These would be great first steps on the headline asks of Arise’s 4 Shifts campaign. There are further more detailed ideas for the new government in each of these areas in our 4 Shifts Report.

Reform Movements striving for democracy and human rights

Arise’s Reform Movements campaign is supporting Christian-led movements of campaigners and activists who are peacefully struggling for democracy and human rights in countries around the world. Such movements have overwhelmingly been the most successful ways for progressing freedom, democracy and human rights in nation after nation around the world. The new Labour government has been keen to stress its commitment to maintaining good standards in public life, respecting parliament, the civil service, the devolved national authorities, and the other crucial pillars that uphold our rights, freedoms and democracy in the UK. This is good and important. They have been less clear how much this will be a priority in their foreign policy. Therefore, in its first 100 days the government should …

Set out their plans for supporting democracy and human rights standards and activists in countries around the world.

Conclusion

In each of the areas above under Arise’s 4 Shifts and Reform Movements campaigns there have been positive signals and steps from the new government which are welcome. However, in each there is also scope for greater progress. Our proposals for the new government to achieve in its first 100 days would be huge steps forward to a thriving, greener and fairer economy, and a more free, just and democratic world.

Find out more

Find out more about how God is at work in the world, and the role we all have to play in that work, in the Arise Manifesto. This report is Arise’s big picture, researched, Biblical, holistic and practical vision for a better world. It looks at what the Bible says, and what we can learn from the best data and the world’s leading experts on the five major areas of evangelism, discipleship, social justice, development and the environment. It then draws these lessons together into a practical road map for the changes we need to see in our world, which the Arise movement campaigns to achieve.

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