Saturday 27 February 2021

Dunce Cap for Dunty

I see low corporation tax rates are 2021's "tuition fees are progressive, actually." At least according to Ian Dunt, Brexit flip flopper, self-regarding sweary man, and one of the most consistently wrong people making a living from writing about politics badly. His argument? Keir Starmer's corporation tax positioning is actually good and the left should support it to stop the government returning to austerity. Having seen one rubbish defence of Starmerism, is Dunty's any better?

He argues Tory plans to put corporation tax up are the first phase for a new programme of cuts. It begins with taxes on businesses as a means of Dishy Rishi getting the public on side, and then austerity comes later - a proper one-two punch to the economy and Britain's post-Covid recovery. Apparently, (unspecified) "focus group research suggests many members of the public – including in Red Wall seats – are already starting to murmur the killer words that all this spending will have to be paid back sometime." Delivering unto business a new tax bill establishes the narrative of the requirement to balance the books, and from there?

Here's comes the killer argument. The left are enabling Tory positioning by attacking Keir Starmer. He argues the left aren't paying attention to Sunak's scheming, otherwise his nefarious plan would lie exposed and the Campaign Group would be joining Dear Keir in the no lobby. Instead its "growing hatred" of Dear Keir is becoming an identifying location, and this is blinding the left to the extent which they have changed the politics of the Labour Party. "The Labour leader, for all their attacks on him, is fighting for the principles they hold." Because Dunty was an exponent of the "any other leader" crowd, rather than take his argument at face value we should examine the evidence underpinning it. And there isn't any.

For one, while Keir Starmer has ruled out a return to austerity, framing opposition to corporation tax rises as an anti-cuts move is all Dunty's. Consider how the policy put across by the leader and Lisa Nandy during the week. Their argument was entirely Hayekian and based on the assumption lower taxes means more funds available for investment. Theoretically true, but with a dearth of profitable opportunities for capital this is just a recipe for big business to carry on banking their returns and doing nothing with it: a situation that has persisted now for almost a decade. Austerity wasn't mentioned at all. A sense this is a cunning trap was entirely absent. Instead, there is a more likely explanation even hard-of-thinking Dunt-esque types might comprehend: the "SLT" saw an opportunity to appear more pro-business than the Tories, and steamed into that space thinking it a smart political move.

And then there is the question of Tory austerity itself. In Saturday's Financial Times, Sunak makes grave faces and promises to level with the British people. Sounds bad, and it is. Corporation tax is the thin end of a wedge alright, but a wedge that sees the enforcement of tax rises across the board. Instead of a carbon copy of 2010-15, which seems to exercise Dunty's imagination more in the remembrance rather than his writerly output at the time, Boris Johnson's schemes are going to be "funded" by taking cash out of the pockets of workers. You'd think this would exercise Labour more, even if only from a wonky, semi-Keynesian multipliers standpoint, but no. Johnson has repeatedly said he's not returning to an austerity programme. His words and the government's plans are more than clear on this. Even the committed Thatcherites are ruling out cutting. No one should trust the Tories, of course, and it is very clear that for all their big statism they mean to rig it in favour of big business. There is more than one way to skin a cat, just as there are multiple strategies for restabilising British capitalism around the class interests the Tories represent.

Read the room, Dunty. If Labour aren't talking about its new flagship policy in anti-austerity terms, and if the Tories aren't about to unleash a wave of public spending cuts, then your argument is empty spin. The struggle over tax is where punitive policy is coming from, not Osborne redux, despite Sunak's ideological pedigree. Still, nice try at giving Keir Starmer's prostration before the hungry gods of capital a principled spin. But I don't think LOTO are going to be in touch about a job any time soon.

Image Credit


Shai Masot said...

The added bonus of all this for Keef is that he can use Anneliese Dodds' dissent as a pretext for purging her after the disasterous May elections. I predict that he will replace her with some terrifying Blairite cyborg like Rachel Reeves. I also predict that Paul Mason will give the move his full approval in a lenghty thread of dribbling tweets.

Blissex said...

I hope that I have found a catchier way to express one of my common arguments...

Some people think that Keir Starmer and his shadow cabinet are pursuing "Blue Labour" style policies, but my impression is that they are actually still pursuing "Yellow Labour" ("whig" entryst) policies, and the social conservativism is just a figleaf.
The decision to oppose corporation tax increases is based on classic "Yellow Labour" (Militant Mandelsoncy) ideology about the primacy of "wealth creators".

NB: corporate taxes are not taxes on businesses, they are taxes on business owners, their main role is to put a floor under tax evasion and avoidance by business owners.

Blissex said...

«replace her with some terrifying Blairite cyborg like Rachel Reeves»

I have an even better suggestion: take back and replace her with Chuka Umunna himself, as he is proven be as much electoral catnip as Keir Starmer! :-)

Shai Masot said...


... or, better still, he could ennoble Simon Danczuk and make him shadow chancellor. Paul Mason would love it.

Kamo said...

It could just be that opposition to corporation tax is perfectly sensible when considering the real world tax incidence implications coming out of the pandemic. Increasing corporation tax will throttle off the more marginal investment cases just when the newly unemployed could do with them.