The title of 2015 Labour Manifesto, Britain can be better, echoes the title of the 1997 manifesto (Because Britain deserves better), although minus the New Labour appellation and the big picture of the leader on the cover. Labour’s “fiscal responsibility lock” is a much more conservative approach to fiscal policy than New Labour’s two fiscal rules, and essentially locks in a Tory “handbag” approach to macroeconomics in perpetuity. Labour promises to cut the deficit every year – which would mean that if the economy were experience a recession, they would need to cut spending, an economically disastrous pre-Keynesian approach much worse and less flexible even than the Coalition Government’s 5-year rolling target for structural fiscal balance.

And although Labour’s proposed medium-term fiscal target is better than the Conservatives in that Labour is only promising a surplus on the current budget rather than the overall budget including capital spending, thus theoretically leaving room for additional capital investment, the manifesto does not take advantage of historically low interest rates on government debt to promise greater capital investment – instead the headline mantras are “no extra borrowing” and “we must live within our means”.

Shadow Chancellor Ed Balls must know that this approach is economically illiterate, but his Keynesian instincts have been completely suppressed for political expediency. This approach may garner Labour some extra votes among floating voters thinking of casting their votes for the Tories or Liberal Democrats instead, (although it is just as likely to lose them votes to the Nationalist Parties in Scotland and Wales, and the Greens just about everywhere); but any short term electoral gain will be at the cost of completely straitjacketing Labour in government.

This straitjacket arises because most progressive reforms cost money, at least in the short run. Labour’s manifesto makes a reasonably good fist of identifying sensible policies which don’t directly cost the government money, or where the cost is limited enough to be met by the £7.5 billion they are planning to raise through tax changes (of which more in a moment). In particular, the extension of paid paternity leave to four weeks at a higher rate, extra funding for childcare for three and four-year-old children, a slightly higher minimum wage, reforms to voter registration to allow block registration for students, and tenancy reform in the private rented sector are all welcome. However, outside of these bright spots Labour is committed to the continuation of the draconian spending cuts inflicted on Britain by the Coalition Government over the last five years. To be sure, Labour’s proposed further cuts are less severe than those promised by the Tories or the Liberal Democrats; but all the same, they are further cuts to public services, many of which are already on life support due to the slash-and-burn approach of the last five years. It is quite possible that certain areas of public service provision could collapse completely on Labour’s watch if further cuts were implemented – which would be electorally disastrous.

What should Labour do instead? Because of expanding need in areas like health, social care, social security and public housing and the extent of the cuts made by the Coalition Government, it is likely that Labour would need to spend something like an extra £100 billion per year (around 6 percent of GDP) relative to current levels of spending, to achieve the kind of positive transformation in the quality of public services that it claims to be committed to. This would require some combination of higher borrowing and substantial increases in taxation, including (for example) a General Anti-Avoidance Rule (as proposed by Michael Meacher MP), a tax on Land Values to replace the regressive Council Tax, higher income tax rates at the top end, and reversal of the Coalition’s cuts to corporation tax.

Labour is committed to ending the non-domicile rule, closing a few other tax loopholes and reintroducing the 50% top rate of income tax. These are all welcome reforms, but together raise only around £7.5 billion – a small fraction of the revenue required to provide high quality public services and restore the social security safety net fractured by the Coalition. As it stands, Labour has pledged to scrap the ‘Bedroom Tax’ on social housing tenants but will keep over £20 billion of other benefit cuts introduced by the Coalition, much of which falls on the poorest working-age families. Ed Miliband’s rhetoric suggests that Labour is looking for an alternative to neoliberal Thatcherite capitalism but the manifesto policies are not radical enough to achieve this. Indeed on the key fiscal policy question, Miliband is running significantly to the right of New Labour, which at least believed in a sustained real-terms increase in public expenditure over time, and fiscal rules that were flexible enough across the business cycle to allow a Keynesian response to a serious economic crash such as 2008.

Furthermore, in some areas a Labour Government might preside over things getting a lot worse than they are at the moment. For example, the manifesto states that Labour is committed to the principles of TTIP – the Transatlantic Trade and Investment Partnership. As shown at https://stop-ttip.org/, this trade agreement would, if passed in its current form, mean the end of democracy in most spheres of our lives, allowing unelected and unaccountable multinational corporations to sue governments which attempted to regulate them in any way which might restrict their profits, with the legal proceedings taking place in secret courts. It is impossible for Labour, or any other left-of-centre party, to support TTIP without fatally compromising any vestiges of social democratic credibility they might have left. To be fair, the Labour manifesto is committed to securing an exemption from TTIP provisions so that at least some of the NHS can remain in public hands, but it is still far from clear whether this will be possible under EU legislation, and in any case this means that most other public services – including schools and higher education – would remain vulnerable to legally enforced privatisation.

To sum up, the Labour Manifesto does succeed in differentiating Labour from the Tories. However, an unfortunate political asymmetry has established itself in the last two decades in Britain and many other advanced industrialised countries whereby right-of-centre (and even some allegedly left-of-centre) governments are transformative, advancing the neoliberal agenda while systematically dismantling the welfare state, the social safety net, public services and the regulations which were built up over the 20^th century to protect working people and the poor from the ravages of unfettered market forces. By contrast, recent left-of-centre governments are almost never transformative; instead they are at best a holding action, ensuring that things don’t get any worse (until they are voted out in favour of a right-wing government which continues the neoliberal onslaught). In order to establish the fairer capitalism which Ed Miliband claims he wants to see, Labour needs to be a transformative left-of-centre project. And, sadly, the 2015 Labour Manifesto in many cases falls short of being transformative.

Howard Reed is Director of Landman Economics