Zohran Mamdani’s surprise success in the New York City Democratic Mayoral primary can be attributed to a number of factors – the epic scale of the grassroots campaign, the stylish and accessible social media content, Mamdani’s own charisma – but one critical feature saw swathes of 2024 Trump voters flock to a Muslim socialist: an obsessive focus on affordability.
In one Queens district, which had supported Trump by a 25-point margin in the 2024 presidential election, Mamdani won with 84 per cent of the vote. This wasn’t achieved through nebulous, macroeconomic promises or trickle-down “growth” rhetoric, but with specific and tangible policies that were laser-focused on the cost of living. Mamdani’s headline messages were: rent freezes, fast and free buses and city-owned grocery stores.
Whether you agree with these policies or not, the point was to put more money back in the pockets of ordinary New Yorkers (crucially, funded by increased taxes on the super rich), and it worked.
Labour could meaningfully reverse its fortunes, taking a page out of Mamdani’s playbook, by tangibly tackling the cost of living. And Labour has the opportunity to go big, far bigger than Mamdani, with national-scale policies that drive deep into the main causes of the great squeeze.
I propose a true “cost-of-living package” that credibly puts more money in people’s pockets, and fast. The package is built on three core pillars which, like Mamdani, relentlessly focus the key causes of the affordability crisis, a crisis which consistently polls at the top of the electorate’s concerns.
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Land value tax
First, a Land Value Tax – every economist’s dream. By taxing the value of unimproved land, the Government might just raise enough money to replace council tax and business rates, as well as scrapping Stamp Duty Land Tax altogether.
This is an easy argument to sell. Each of these taxes are well-known to be regressive, outdated, anti-growth or a combination of all three. Land Value Tax, on the other hand, would tackle land speculation and land banking. It would support productive use of land, create downward pressures on rent and deal with vacant or underutilised properties.
This policy would cut deep into housing costs for businesses, renters, owner-occupiers and movers, all while rebalancing property taxes to the benefit of working people.
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Zonal energy pricing
Second, Zonal Energy Pricing would allow the British energy market to reflect the true cost of delivering electricity across the UK and finally realise the full benefits of our growing stock of renewable energy assets. Octopus Energy has been campaigning for Zonal Energy Pricing for years, and the Government recently confirmed after consultation that it is no longer considering this as an option, in favour of an undetermined reform of the existing – and very broken – national pricing system. This is a mistake that will, quite literally, cost working people.
Zonal Energy Pricing would cut the cost of living where it is needed most, in particular for the north of England and in Scotland, where regional inequality has hit hardest. But moreover, the savings on grid costs and constraint costs, including the outrageous (in both principle and sum) cost of paying generators to turn off their renewable energy assets, would be enough to subsidise bills everywhere, regardless of any mythical postcode lottery.
Octopus suggest that the implementation of Zonal Energy Pricing would take no more than two years and could save every household across the country hundreds of pounds annually on their energy bills. Labour are failing to grasp at low hanging fruit here, with an easily implementable policy that would quickly slash bills.
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A ‘meaningful’ wealth tax
Finally, a meaningful Wealth Tax. Whether this is formulated based on Gary Stevenson’s two per cent on assets over £10 million, or instead through a reconfiguration of the existing tax system, the country, and the economy, is desperate for a solution to wealth inequality.
More sensible taxes on wealth could accrue substantial sums: Patriotic Millionaires claim that their wealth tax could raise an estimated £24 billion annually. Capital Gains Tax reform could raise £12 billion, National Insurance Contributions on investment income could raise £11 billion.
Together, these tax reforms could fund enormous tax cuts for workers, universal childcare, or a National Care Service – take your pick. Either way, this policy saves thousands each year for every working person in the country and creates the opportunity for a legacy to rival Attlee.
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‘Mamdani’s win wasn’t magic, it was material’
The default response from this government when fielding questions on rapidly increasing inequality, poverty and homelessness cannot simply be to grow our way out of it. In any event, growth comes from the bottom-up and the middle-out. Trickle-down economics rooted in deeply flawed neoliberalism was discredited long ago and leaving it behind is well overdue.
A cost-of-living package that returns more money directly to working people will not only grow the economy but also reverse Labour’s impending electoral nightmare by actually making a material difference to our everyday lives. These policies could win round more than just progressives yearning to tax the rich, but also a working class desperate for more money in its pockets. This is the point: Mamdani’s win wasn’t magic, it was material. If Labour gets it right, Mamdani’s impossible win might not look so impossible here.
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