by Greig Baker
As a junior Parliamentary staffer working for the Tories in 2005, I drafted a Bill to raise the income tax threshold for low earners. I wanted my party to make a pitch to Labour’s traditional working class voters without compromising our principles on lower taxes. Cutting taxes for poor people seemed like a good way to do both – it was counter-intuitive and principled at the same time. Years later, a very similar measure was adopted by George Osborne and it went down pretty well.
Labour should use the same approach now. To be clear, I have no love for the Labour party and I don’t want to see it win in 2020. However, I do want there to be a realistic prospect of it winning. The Conservatives need to be kept honest and the government must be kept on its toes. To do that, Labour has to be an effective opposition and, to do that, it needs to come up with some surprising and eye-catching policies to appeal beyond the converted, without selling its soul – in other words, to be counter-intuitive and principled. Here’s what I suggest…
For starters, John McDonnell should stop thinking about what he wishes tax and spend was like, or even what it is like right now, and instead start thinking about what the Government’s approach to tax and spend will be by 2019-20. That’s when voters will be looking at his policies in detail and seeing how they match up to reality.
General impressions are formed now, but he has to make sure his prescriptions for the economy don’t get further away from the real world the closer we get to polling day. He’s going to have to play the ball where it lies, not where he wishes it was. For example, the government now uses fiscal policy to buy specific social outcomes (think the Apprenticeship Levy) and will do much more of this over the coming years, as it’s relatively cheap and very targeted. What will Labour’s response be? Rather than threatening to ban dividends, Labour should be planning to offer tax breaks to SMEs that invest in the social programmes the party wants, like free childcare, social housing, or promoting gender equality. That would be counter-intuitive, but principled.
In a similar vein, rather than just bashing rich people (who pay sly accountants to help them ignore most tax changes anyway), why not make a direct appeal to the wealthy and give them an excuse to get onside with the Corbyn project? How about OBEs for anyone who pays an extra 10% income tax? Or knighthoods for anyone who pays an extra 20%? At a stroke, Labour would be rewarding entrepreneurs and discouraging tax avoidance. Counter-intuitive, but principled.
Or Labour could be really bold and even try to beat Osborne at his own game. The toilet flush in the Treasury might be pulled a bit more often if Corbyn promised to abolish inheritance tax…on the condition that estates over the current threshold had to be passed on in the form of educational bursaries, charitable donations, or investment in start-ups, according to the deceased’s wishes. People could leave the first £325k cash to their grasping brood, then anything over that gets put to work for the community – a kind of forced philanthropy that would pay for what a Labour government would want to buy anyway. Counter-intuitive, but prin… anyway, you get the idea.
I’m sure there are much better ideas out there, but the important thing is: however desperate Labour’s state might seem to be, it’s not too late for the party to start offering some surprises. You can put the frighteners on my lot by sneaking onto Tory ground… and bringing your principles with you.
Greig Baker is a former Conservative staffer and now Chief Executive at The GUIDE Consultancy
Tags: economic policy, George Osborne, Greig Baker, Jeremy Corbyn, John McDonnell MP
This article skirts round the real problem: Like the LibDems, the whole point of the Labour Party seems to be – survival at all costs.
What, for example, is the Labour position on Europe just before the referendum?
What is the Labour policy on the debt which has an unmentioned effect on the economy (for instance, low interest rate or the coming economic crash)?
How do Labour plan to deal with the crush on the Social Services, Education and the NHS with all these new people flooding in?
And when are the Labour Party going to attack the bland assumptions on global warming and the idiocy of windmills and solar in a northern country without batteries? Workers are being laid off in droves because of this – and the Workers’ Movement could not care less!
Imaginative people – like Lord Adonis – are sidelined. Instead we get the same tired old rubbish in Dover where Diane Abbott was encouraging a riot last week.
Good out of the box thinking.
But to do as suggested you need to be brave, intelligent (to see the perils of your proposals) and be credible so that people believe you will do what you say..- most of the time anyway.
And the latter is the issue. Most of what Labour have said they will (or might) do is so stupid…no-one in their right minds either believes tehy will do it (so credibility = zero), or would want them to do it – as teh proposals are so plan stupid (subs without missiles etc).
The current Labour leadership have already defined the public’s view of them – and Cotbyn’s dismal leadership polling says all that needs to be said.
The best thing for Labour is for Corbyn to retire on grounds of ill health and John McDonnell to be rendered dumb.
In a similar vein, rather than just bashing rich people (who pay sly accountants to help them ignore most tax changes anyway),
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Why not ask why you as a politician are using accounting tricks to hide you debt mess?
http://www.ons.gov.uk/ons/dcp171766_263808.pdf
Levy (2012) explains that the last official figure for the state pension schemes’ obligations was
produced by the Government Actuary’s Department (GAD), as at 31 March 2005, at £1.347 trillion
In summary, the estimates in the new supplementary table indicate a total Government pension
obligation, at the end of December 2010, of £5.01 trillion
636 bn a year.
Note too, that the Tories have doubled the debts and that includes pensions
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Hence the need to put penal taxation on the public.
Greig
As one who voted Labour for three decades but turned to the Tories in 2010 and 2015 I can tell you that your comments will fall on deaf ears in most areas of the Labour party. Some on here are sensible and will understand and agree with some of the points made. However the new Corbynistas are the left of the left, and its clear they don’t believe in the concept of personal property or personal responsibility and are more in tune with the large state and high taxation. When these people consider Venezuela as the best economic model and appoint a chancellor who knows nothing about finance and the global markets, it tells you all you need to know. Don’t waste your time and energy.
This article lost me at the 1st sentence – raising the tax threshold was Libdem policy & Clegg had to force it through against the opposition of both Cameron & Osborne. Go back to the TV debates & watch Cameron insisting that the country couldnt afford it. Of course once the policy turned out to be affordable & popular the Tories starting claiming it as their idea.
I am sorry but I dont buy all that hogwash about The Tories needing a strong opposition. What intelligent Tories fear is that a Labour split will see the end of fake opposition with a revived Libdems or a new “Alliance” offering Reformism with genuine Reforms.
With The Tories split as well the whole rotten, cosy consensus could break up.
Your article reveals the one of the core conceits of the Tory party – that they believe that taxation should be something voluntary, if you’re rich enough, and that so should social contributions, and that this will somehow magically lead to a good outcome.
That just leaves the poor people with obligations like PAYE and NI.
At some point the upper end of the economic spectrum are going to have to realize that their wealth is founded on a civil society that educates and cares for it’s people, and that without that strong foundation, they have no customers.
> Labour should be planning to offer tax breaks to SMEs that invest in the social programmes the party wants
Big business doesn’t want to pay it’s taxes, so instead we should offer tax breaks to small business if they’ll provide the things that the taxes would have paid for? Simultaneously ignoring the problem, and reducing tax revenues? The Conservative party would laugh themselves silly if Labour adopted this idiotic policy, but it simultaneously sounds like something they would enact themselves.
> How about OBEs for anyone who pays an extra 10% income tax? Or knighthoods for anyone who pays an extra 20%?
Reveals more about the Tory mindset – quid pro quo, selling favours.
> inheritance tax
So the rich will be able to choose how they disburse their funds upon death. There’s no chance of them leaving it to, say, a “charitable foundation” that exists to provide jobs for hapless young heirs and heiresses, and possibly also pay to lobby impressionable politicians, no?
All thinly veiled self-servitude.
is the gentleman’s article extracting the …..?
Or is he merely a concern troll?
Thanking you