Thursday, 14 February 2013

One Nation Needn't Be Taxing

Ed Miliband's One Nation Economy speech this morning was interesting and welcome. Interesting because it puts clear political water between Labour, the Conservatives and their LibDem mini-mes. And welcome because we are starting to catch a glimpse of what a Labour government under EdM could look like.

Let's start with the headline grabber - the 10p Tax. When the last Labour government scrapped it, the fall out was positively radioactive. In the popular imagination it underlined how far the party had drifted from its roots and it took a deserving punching at the polls. So it is good to see the idea resurrected in a speech which, despite being clothed in the wonky garb of the 'squeezed middle', addressed itself to the systematic erosion of living standards. Even better, this tax cut is to be funded by the introduction of a mansion tax. It might not be "squeezing the rich until the pips squeak" but it is a welcome corrective to the weak-kneed relationship New Labour had to affluence.

As you might expect, there's been some LibDem crowing that this is not too dissimilar to their policy. True, but there are two crucial differences. Labour won't be lowering the income tax threshold to bring more people into a new 10p tax bracket. Rather, tax will likely *start* at the level it inherits in 2015 - assuming the polls hold good and we are returned to power. The second point is Labour will actually be able to deliver a mansions tax, something the LibDems have singly failed to do in nearly three years of government.

The speech trailed a few other welcome-sounding suggestions that could well find their way into the next manifesto. They're not quite the storming of the Winter Palace, but the temporary VAT cut, caps on train fares, curbing bank charges, and taking action on rip off payday loans will put money in people's pockets. If you want to tackle a standard-of-living crisis, this is one way of doing it.

EdM's other comments about supporting small businesses hammered by business rates, helping young people into work through subsidised training places, emphasising skills and overcoming the comparatively low productivity of the British economy all point toward the sort of industrial strategy that belatedly got an airing in the dying days of Brown's premiership. Of course, there is much policy meat to be put on the bare bones - particularly Labour has to understand that vocational training (and its jobs guarantee) cannot come at the expense of the terms and conditions of existing workers. But the One Nation idea that is fitfully emerging is obviously social democratic, and is infinitely preferable to the nightmarish dog-eat-dog society the Tories and LibDems are bringing into being.


Phil said...

Here's the test of the EdM email that went out to party members tonight:

Dear Phil,

I am putting Labour where it should always have been, on the side of working people and families – with an economic recovery built by the many, not just a few at the top.

We would cancel David Cameron’s millionaires’ tax cut, and a One Nation Labour Government would make the tax system fairer by taxing mansions and reintroducing the 10p tax rate to help working families.

Join the campaign for a One Nation Labour budget by sharing the image below.

David Cameron’s economic vision is of a race to the bottom in wages and skills, rewarding those at the very top but leaving everyone else squeezed as never before.

The last two years show that David Cameron’s approach doesn’t work. The economy isn’t growing – it has now flatlined for over two years, and the deficit is going up.

I believe that we can only build prosperity, when everyone plays their part in building our economy.

A fair tax system is a central part of building a successful One Nation economy. That’s why we would use the money raised from taxing houses worth over £2m million to cut taxes for working people, reintroducing the 10p tax rate.

A One Nation Labour Government would cut tax for millions – not give a tax cut to millionaires.

You can help make this happen - show your support for our campaign by sharing the image above on Twitter and Facebook, or forwarding this email to your friends

If we all do our bit we can do this.

Thank you

Ed Miliband

Gary Elsby said...

Come on Phil, you'll get a few more of these Valentine's letters over the next two years.

Let's be truthful.
This was a message to voters in Eastleigh and afurther message to Liberals that a coalition post 2015 is on the table.

Labour's economic dilemma is dreadful to watch (It was Ed and Ed who dropped the 10p tax).

Undoubtedly Labour will act just as preposterous for elderly care provision as the Tories (semi detached mansion tax).

I've noted that the 'deficit is going up' slipped in there somewhere.
Is it, or have they noticed a blip for the month?

Trident is going to cost £100bn (they'll say it'll cost a few quid over a few million).
Labour will vote for it.

10p my f***** ar**.

asquith said...

I'm glad they now appreciate it's better to tax land and unearned rather than earned income, especially that of the worst off, who have in fact benefited under the raising of the income tax threshold (and I do support the lowering of the top tax rate- it should never have been raised to 50% in the first place and I think Brown and Darling did it out of calculation rather than because they thought it was a good idea).

I'd be even happier if someone proposed a full-on LVT, which I believe was an idea of Lloyd George (even though I was PM at the time, my memory isn't what it was, with having been dead for 75 years) although it was never enacted because my government was already fighting on too many fronts, with landowners being especially staunch foes.

And it seems never to have really been a Labour priority at all, correct me if I'm wrong but Attlee never even entertained the idea.

As you'll have inferred, I'm not much for Labour but the world might have to come to terms with them being a majority or the largest party in 2015.

asquith said...

Yeah, it was actually 85 years. And the fact is, this is more of a Tory government because they are the senior partners in government. If we had a more equitable voting system they wouldn't be so dominant, with their 36% of the vote. Also, even if this Lib Dem implosion happened (which I think it won't) they'd still have more MPs than they do now!?

Phil said...

I disagree with you on the 50p tax, but we'd be nuts to reverse the raised tax thresholds the LibDems have championed. Proof that even they can have the occasional good idea. Pity it will get swallowed up by the bedroom tax, council tax rises for the poorest, and the spiralling cos of living. They give with one hand and take it away with another.