FEATURE
INTERVIEW Phillipson and Labour leader Sir Keir Starmer discuss postCovid-19 support for businesses at engineering components manufacturer Beard & Fitch
saw 62.4% vote ‘leave’ in the 2016 referendum, Phillipson is unsurprisingly keen to move on from the divisions of the Brexit vote. “I think that question of ‘leave’ or ‘remain’ is a divide that is now behind us,” she says. But she admits that winning back ‘red wall’ voters who deserted the party in droves in 2019 will be “a really big challenge”. Phillipson is sceptical about the government’s version of ‘levelling-up’. “They cannot even define what it means,” she says. She bemoans current funding as overly focused on infrastructure and transport: “Unless you address the big challenges we face around skills, that investment will not deliver the best possible outcomes.” She also criticises the government’s system of bidding for pots of cash, which requires councils to spend time writing bids “rather than the government thinking about how they can use their role to support more strategic development in our towns, villages and cities”.
Legacy of austerity Phillipson firmly rejects the argument that, in the light of Covid-19, austerity was a prudent strategy, creating the financial headroom needed to fight the pandemic. “I think austerity has led to the lack of resilience that many families and communities are currently facing,” she says. “It has also meant that our public services were less well prepared for a crisis than they should otherwise have been.” The government would be making a big mistake by rushing to implement early cuts and tax rises to reduce government borrowing resulting from the pandemic, she says. “If you look at the impact of the council tax increases that the chancellor is pushing onto local councils, the cuts to universal credit, the fact that many key workers will face a pay freeze – that triple whammy will suck demand out of many of our local economies at a really critical moment.” In her Mais lecture, Dodds pledged another ‘value for money’ policy unlikely to scare the horses. A future Labour government would extend fiscal planning from the current cycle of five years (or less) to more than 20 years. This would create greater resilience to allow the public finances to respond better to future crises, including climate change, believes Phillipson. “If you take social care,”
“I think austerity has led to the lack of resilience that many families and communities are currently facing”
she says, “that is not going to be solved by simply a short-term injection of cash. It requires a much broader consideration of demographic change.” The extent of private sector involvement in providing public services is another traditional hot potato for Labour. While Phillipson is critical of “the fixation Conservative governments have had with assuming solutions will also lie in the private sector”, she says Labour would want to work closely with business. “We have seen during this crisis some wonderful examples of what can be achieved when you have government, business and trade unions working closely together,” she says. “We want to see a new kind of social contract under a Labour government that would allow that to develop.” Citing bus services, she says local areas could be given greater control without full-blown nationalisation. At some point, the Labour Party will have to firm up such ideas. But that time is not now. As we bring the conversation to a close, Phillipson says that, from shadow cabinet meetings to coffee mornings, she has now adapted to the online shift necessitated by lockdowns. To relax, she is a keen jogger. “I have used lockdown to explore parts of my constituency that I have not been to for a while, and to learn new routes to places; to take a new path.” The description might equally apply to her party’s slowly emerging approach to public finances.
34 PUBLIC FINANCE MARCH/APRIL 2021
30-34 Feature - Interview_Mar-Apr 2021_Public Finance 34
23/02/2021 16:06