Budget 2018: Ending austerity means building a co‑operative economy

Response to today's UK Budget from Co‑operative Party Parliamentary Chair, Jim McMahon MP


Co-operative Party / Natasha Hirst

Earlier this month the Prime Minister called on MPs to “Put the national interest first” (10th Oct). With a budget that does nothing to support the growth of a more co-operative economy, her own Chancellor has failed to do just that.

As the country takes its first steps towards a post-Brexit future, this was an opportunity to champion businesses who pay their way and contribute to our economy and society. Instead, he chose to continue tilting the playing field towards multinationals who cut corners by avoiding tax, leave our high streets high and dry, and who pay poverty wages.

This was a budget that failed to champion the fairest forms of business: co-operatives democratically owned by their customers and employees. In other words, this was a recipe for more of the same.

According to the IFS, it will take £19bn just to avoid further cuts, and as much as £108bn could be needed to reverse a decade of economic self-harm (25 Oct). Austerity may be coming to an end in the minds of the Tory Party, but it’s time for the Chancellor to face up to the fact that you can’t end austerity if you tolerate companies who avoid tax.

We need an economy that serves the national interest in the years ahead. If this were a Co-operative Party budget, we would see:

  • Companies required to demonstrate basic standards of tax transparency through measures such as the Fair Tax Mark, which has been pioneered by Britain’s leading co-operatives.
  • Steps to double the size of the co-operative sector and to actively encourage diverse forms of grassroots enterprise, by differentiating corporation tax treatment of social, private and PLC businesses.
  • A radical redesign of business rates to end to the unfair advantage enjoyed by online retailers, levelling the playing field for local businesses and reversing the decimation of high streets.
  • A fair funding settlement for local government that enables local authorities to invest in the services and social infrastructure needed to secure the future of town centres over the long-term.

All around us, there are huge changes taking place in our economy, on our high streets, and in how we buy, spend and earn. We can choose to stand idly by, accepting these changes as inevitable, or we can take control.

It’s within our power, through the decisions we make as consumers and here in Parliament as policymakers, to shape those trends and decide the kind of economy we want, and the kind of business culture that can deliver it.

At a time when the country needed boldness, this is a missed opportunity to transform how our economy is run.