10p tax rate: the politics of tiny differences
I read Ed Miliband’s speech this morning before I realised that there was a fuss over his plan to reintroduce a 10p income tax band, paid for by a mansion tax on homes worth more than £2m.
So I came to the 10p tax bit, and the attack on Gordon Brown, cold. They read a bit oddly. But, as there is little difference in practice between restoring a 10p lower rate of income tax and simply raising the income tax threshold, it seemed more to distance Ed Miliband, symbolically, from the government in which he was a Cabinet minister than, in substance, from the current Government.
The coalition has in any case, as Alex Hern pointed out, raised the threshold to take all those who were paying the 10p rate (that Brown abolished) out of income tax. Brown’s mistake has already been reversed.
More important, therefore, was Miliband’s endorsement of the £2m mansion tax, although I think Labour has been in favour of this in principle for some time.
As for the rest, it was a summary of previous policies: cut VAT; keep the 50p top income tax rate; keep tax credits; introduce a technical baccalaureate; subject takeovers to a two-thirds vote of shareholders; split retail and investment banks. The first three will be out of date by the time of the next election, by which time Labour will be bound by coalition spending plans for the following two or three years.
There was an argument to be had about whether the coalition cut public spending and raised taxes too fast, but it is almost over now and neither side won a decisive victory. By 2015 Labour will not want to promise higher borrowing, so all its policies will have to be self-financing. All this speech and Ed Balls’s article for the Evening Standard suggest is that Labour will take a few billion more from the rich and take a few billion less from the middle (the actual poor, as I have tried to point out a million times before, not paying much income tax anyway).
So, for all its expansive talk of the “childcare they need” (oops a bit of “us and them” crept in there, along with several billion of unfunded spending promises), the “social care they need”, the jobs and the roads, rail and housing that will be built in the New Jerusalem, the speech came down to the incremental politics of tiny differences.Tagged in: 10p tax, 50p tax, ed balls, ed miliband, mansion tax
Recent Posts on Eagle Eye
- The King of Bhutan’s hopes in 1987 for Gross National Happiness are valid today
- Cameron and Modi bond as they woo some 60,000 overseas Indians at Wembley
- Modi tries to revamp his battered image as he flies to London
- Big defeat for India's Narendra Modi just before UK visit
- Mark Carney is compromising the Bank of England’s independence
Latest from Independent journalists on Twitter