Hypocrisy, lies, and spin: Miliband and the 10p tax rate
He may have pulled the wool over the eyes of many, but Miliband’s first major policy announcement was a masterclass in double standards, deceit and shameless spin
Ed Miliband’s Valentine’s Day treat for his wife, we are told, was a Chinese takeaway at their Primrose Hill pad followed by an utterly ominous sounding “surprise”. And while we are thankfully spared the details of Justine’s late night treat, it was not the Labour leader’s only big reveal of the day.
Miliband’s shock announcement that he would reverse Gordon Brown’s abolition of the 10p tax rate won him praise across the board yesterday. The Spectator’s James Forsyth noted the boldness of his rebuke to Brown; Owen Jones chirped gloatingly that redistribution was back.
Even Labour’s enemy of the people, Dan Hodges, felt this was a watershed moment for his old foe. Truly a red letter day for Red Ed.
A resounding success then? Not quite. He may have pulled the wool over the eyes of many, but Miliband’s first major policy announcement was a masterclass in double standards, deceit and shameless spin.
First: the hypocrisy. Back in 2008, when he was in government and had to actually account for the pledges his party had dreamt up, Ed was a leading supporter of the Brown 10p tax abolition. Here he is explaining how scrapping the 10p rate “makes the tax system fairer”:
Fast forward five years and Miliband is reversing that very policy. Why? Because he wants, wait for it, a “fairer tax system”. What a difference being in opposition makes.
Second: the deceit. Ed Balls was battered and bruised by the time Andrew Neil had finished with him on the Daily Politics yesterday; being a chief Brownite lieutenant in the Treasury while the 10p tax rate was abolished was always going to be awkward for the Shadow Chancellor. Balls insists he tried to convince the then Prime Minister not to go ahead with it:
Neil: “And you told Gordon Brown don’t do it?”
Balls: “Yes. Yes”
Neil: “And he ignored you?”
That’s not quite how his contemporaries remember it. In his chronicle of the Brown years, the biographer and commentator Anthony Seldon recounts how Balls’ position was rather more complex:
“[Spencer] Livermore, a senior political adviser, was fiercely opposed, as Balls later claimed himself to be. Balls’s claim is strongly contested by those present at the time...a meeting between Brown and Balls resulted in the latter switching his position and becoming an advocate of abolishing the 10p rate; in return he received a “rock-solid” commitment that he would be given a department of his own.”
Shameless. Worst of all, however: the spin. Balls and Miliband have announced that they will fund their new flagship policy with a mansion tax on properties worth over £2 million. Just the two problems.
One: Labour have already committed to spending the money raised through a mansion tax on reversing the Coalition’s cuts to tax credits.
Two: Even if the cash had not already been set aside for something else, the mansion tax would only raise £2 billion. That figure is a considerable distance short of the £7 billion required to pay for reversing the abolition of the 10p rate.
Let us give the last word to the Institute for Fiscal Studies:
“The proposal for a new 10p starting rate of income tax has no plausible economic justification. It would complicate the income tax system and achieve nothing that could not be better achieved in other ways...To have observed lower starting rates of tax being introduced and abolished by governments of both complexions over the last three decades and then to propose the same thing again suggests a remarkable failure to learn from history.”
The Labour leader has pledged to reverse a policy that he himself implemented; his party has offered no credible explanation about how it would be funded. This is magic money politics, disingenuous in the extreme.
Until now Ed Miliband has offered nothing but a blank page. As he finally writes the first words, at last we begin to see why.
Alex Wickham is The Commentator's UK Political Editor and a reporter at the Guido Fawkes website. He is a contributor to their column in The Sun newspaper. He tweets at @WikiGuido
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