“We’re not seeking a mandate to increase people’s taxes. We’re seeking a mandate to grow the economy,” Rachel Reeves, the shadow chancellor, assured the Financial Times this week.
Her party certainly talks a good game on wealth generation. Can Labour stay focused on economic growth or will it get sidetracked into progressive social engineering?
Buried on page 88 of the Labour manifesto is a clear signal of the latter. It states, rather innocuously, that Labour “will enact the socioeconomic duty in the Equality Act 2010”. This provision, proposed by Harriet Harman in Gordon Brown’s final year in office and later scrapped by David Cameron, would blur Labour’s priorities. For it would mandate that the public sector show “due regard” to the desirability of narrowing inequalities of outcome, rather than improving growth, when making all significant decisions.
This broad yet vague mandate adds to existing racial and gender equality duties, requiring all departments, regulators and most quangos to consider how their decisions affect income, wealth and material deprivation inequalities stemming from differences in occupation, education, place of residence or social class.
Public entities from the Low Pay Commission to town planners would thus need to demonstrate, probably through impact assessments, how their decisions affect socioeconomic disadvantage and outline steps to reduce gaps between rich and poor through resource allocation or procurement. Failure to meet this “duty” could prompt judicial reviews, potentially leading courts to overturn policies or decisions on procedural grounds.
Opinions on its impact vary. Some ex-civil servants, such as Jonathan Portes, suggest it would be a mere formality and would not significantly prevent policies with other objectives. Scotland and Wales adopted this duty in 2018 and 2021 respectively. As Laurie Wastell noted in The Spectator, it hasn’t prevented regressive policies such as minimum alcohol pricing in Scotland or stringent green targets for Welsh farmers.
Yet if it wouldn’t change policy decisions, why waste public sector time and resources on compliance? Do we really need to know how a new nuclear plant affects wealth gaps? Should public sector pay bodies focus on income inequality rather than just addressing worker shortages? Should the Ministry of Defence spend time analysing its impact on material deprivation rather than solely concentrating on defence?
Labour clearly believes the answer to these questions is “yes”, or it wouldn’t propose the duty. It’s therefore important to note the radical principle behind this idea. While all social democrats favour more material equality of outcome, it’s quite another thing to think that all significant government decisions should be made considering that goal.
Indeed, it’s easy to see how this could be weaponised to slow down or block government decisions aimed at achieving other, less popular objectives. One New Statesman senior editor, for example, believes the duty would have created legal barriers to implementing “austerity” measures to reduce the budget deficit in the 2010s.
Looking back at the debate about the idea in 2009, you’ll find that others considered the duty even more significant. Polly Toynbee, a Labour-supporting commentator, waxed lyrical about how it would practically ensure more redistribution, higher minimum wages and compressed public sector pay awards. A cabinet minister even described it as “socialism in one clause”.
That was clearly an exaggeration but Sir Keir Starmer’s Labour should think carefully about the trade-offs. There’s a progressive conceit that all good things must go together — that what’s good for reducing economic inequality will also benefit growth, defence and other priorities. The reality is that inserting multiple objectives into every decision means prioritising none.
At best, this socioeconomic duty would waste public sector resources and undermine decisive, pro-growth infrastructure, tax and spending decisions by giving bureaucrats and ministers excuses for delays and inaction. At worst, it would shift Starmer’s government’s focus away from growth. If Labour is serious about making Britain more prosperous, it cannot afford such distractions.