by Atul Hatwal
The roll-out of the 10p tax rate pledge was a reminder of how things should be done. Expectations were expertly managed in the run-up to the speech, the announcement was genuinely striking, and the government was caught on the hop. There was no abstract talk of responsible capitalism, no uncosted black holes opening up and the distinction with Gordon Brown’s tarnished brand was clear.
This was good economics and even better politics.
Yes, it might be better if the coverage 10p tax rate band was broader but it needs to be affordable and importantly this is a powerful signal of where the party stands.
The headlines tomorrow will be pleasing and the pressure is now on George Osborne to produce an equivalent rabbit out of his hat for next month’s budget. It’s the type of bold move by Labour that could force the chancellor into a rushed response that then unravels: “Pasty tax” redux.
But, and there is big but, as good as the delivery and content of today’s policy launch was, it doesn’t address the fundamental fear the British public have about Labour.
Earlier this week the Guardian’s ICM poll gave Labour a 12 point lead over the Tories, the biggest since May 2003. Yet, below the topline, was evidence of Labour’s lack of progress on the central issue of economic competence.
Asked to identify the main reason for our current economic problems, 29% opted for Labour’s “debts … racked up to finance unsustainable spending.” This is same as last May. In comparison 23% blamed government cuts and 21% bankers for failing to lend to business.
Labour’s problem with voter perceptions on the economy is often described in terms of the deficit, but this isn’t quite right. As far as the public are concerned, the deficit is the symptom, Labour’s spending is the problem.
