Posts Tagged ‘50p tax rate’

Reverse the child benefit cut and the politics of the 50p rate become irrelevant

29/01/2014, 12:46:12 PM

by Kevin Meagher

Of all Gordon Brown’s decisions – both good and bad – the most questionable, perhaps the oddest, and certainly the most irritating, was to award a peerage to Digby Jones and invite him into his government as trade minister.

What on earth was Gordon thinking? Jones – a corporate lawyer and former head of the CBI – is also a blowhard’s blowhard and has snapped at the hand that once fed him ever since. He can be relied upon as a rent-a-quote Labour basher these days and was at it again, jowls a-quivering, at Ed Balls’ pledge to restore the 50p top tax band for those earning over £150,000 a year. Reaching new heights of self-parody, he claimed:

“In the last few months we’ve got, oh, ‘if it creates wealth let’s kick it’ – really go for energy companies, really go for house-building, bankers, this time it’s going to be the high-earners.

“I am amazed he’s going to keep it at 50[p]. I’d expect if he [Balls] becomes Chancellor of the Exchequer we could be looking at 55, 60 on the excuse he gave today.”

But the outriders for the wealthy like Diggers can’t have it both ways. If raising the 45p rate to 50p is an inefficient way of raising revenue, the contention of august institutions like the Institute for Fiscal Studies, then the well-heeled clearly aren’t losing out very much, so it can hardly be catastrophic.

The economics of making those with the broadest shoulders pay the most to reduce the deficit, Ed Miliband’s phrase to describe the move, is sound enough, but the politics of tax rates are, of course, tortuous stuff for Labour.


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Budget preview: an opportunity to change the nature of Labour’s political attack?

18/03/2012, 08:00:52 AM

by Anthony Painter

If the leaks turn out to be true, we are facing one the most radical Budgets in living memory. The abolition or reduction of the 50p rate, regionalisation of public sector pay, increasing the personal allowance, and the introduction of “tycoon tax” (ie: minimum tax rate for all) is a major package of reform. As soon as George Osborne stands up, the framing battle will commence. What should Labour’s line be?

I’ll put my personal allowance tax saving on the fact that the line will be “fairness”. Ed Miliband and Ed Balls will focus on the abolition or reduction of the 50p tax rate. They will say this proves we are not all in it together; one rule for the rich and one rule for the rest of us. They will follow with a flurry of numbers about how the average family has been hit by the Tory-led government’s tax and spending changes since 2010. Labour would tax banks, protect tax credits and reduce VAT. The Tories favour the rich over the rest.

When George Osborne announced the VAT increase, the reaction was pretty much the same. The party HQ printing presses went into overdrive even while the leadership election was on and off Labour went. People didn’t want VAT to increase and they don’t want the 50p tax rate abolished. So it’s a no-brainer, right?

The problem is that it didn’t work.

Labour cries “unfair” at every possible opportunity. People know that Labour thinks everything the government has done is “unfair”. A good portion of the population think it is unfair too. One problem is that they take “fairness” to mean a slightly different thing to Labour. They take it mean reciprocal fairness: you should receive in accordance with your contribution. Labour means distributional fairness: the poorer you are, the more you should get. That is why Labour’s cris de coeur about fairness slightly miss the mark.

There is another approach: attack the government’s fiscal and economic decisions. The package of measures which is rumoured undermines fiscal consolidation and economic growth.


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Sunday News Review

11/09/2011, 06:33:19 AM

10 years on

On this 10th anniversary of the terrorist attacks of ­September 11, 2001, we remember that 9/11 was not only an attack on the United States, it was an attack on the world and on the humanity and hopes that we share. We remember that among the nearly 3,000 innocent people lost that day were hundreds of citizens from more than 90 nations, including 67 from the United Kingdom. They were men and women, young and old, of many races and faiths. On this solemn anniversary we join with their families and nations in honouring their memory. We remember with gratitude how 10 years ago the world came together as one. Around the UK, entire cities came to a standstill for moments of silence. People offered their prayers in churches, mosques, ­synagogues and other places of worship. And we in the United States will never forget how the people of Britain stood with us in ­solidarity in candlelight vigils and among the seas of flowers placed at our embassy in London. We are touched that the UK will honour the victims again today – including by breaking with protocol and flying the Union Flag at half-mast at its ­embassy and consulates in the United States. – Barack Obama, the Mirror

Manhattan is always a hectic place. It is frequently gridlocked and its citizens are used to hustling their way through crowded streets and subways. But on Saturday it was different. As New York prepared to mark the 10th anniversary of the 9/11 attacks, a new terror alert provided a grim reminder that a decade of war and struggle has not removed the threat. The visible evidence was all over New York. In the wake of an unconfirmed but scarily specific threat that three terrorists, likely to be aiming to use a car or truck bomb, had entered the country to attack the Big Apple, the city went into a kind of security lockdown. Yet, through it all, New Yorkers were urged to keep calm and carry on. “If you do lock yourself in your house because you’re scared, they’re winning,” Bloomberg said on his weekly radio show. Most people seemed to agree. Even with a wary eye on the security efforts, people seemed to feel it was still business as usual. “They look like they know what they are doing. I’m going to keep acting normal,” said Izzie Garcia as she arrived in Manhattan’s Union Square for an early start to a morning of shopping in her favourite stores. Bloomberg was also leading by example. It was he who had appeared on the nation’s TV screens to give the first official public details of the new terror threat. At a press conference in New York he had warned of the dangers and had urged New Yorkers to keep taking the subway. – the Observer

In America they speak of the “lost decade”. The moment it began is obvious: the morning of 11 September 2001, when the world’s lone superpower fell victim to the most devastating terrorist attack of modern times. Its end, however, is harder to date. One answer is 1 May this year, when a team of Navy Seals tracked down and killed Osama bin Laden at his hideaway in Pakistan. A circle was complete; after almost 10 years of frustration, false leads and continuous war, the master planner of 9/11 had finally paid for his crime. But look at it another way and the answer is not so obvious. In these 10 years America has lost much, in terms of lives, treasure and reputation. Most of all, perhaps, it has lost its illusions. One, that its home territory was invulnerable, beyond the reach of hostile foreigners, vanished on that terrible Tuesday morning. But a decade on, another no less cherished illusion has disappeared as well: the certainty that whatever happened in the world beyond, America was a place of infinite opportunity and ever-growing prosperity. – the Independent

New Scottish Labour

The Scottish Labour Party has put in place the first building block for its fightback in Scotland. It decided that Iain Gray’s successor as leader will not, as now, just be leader of Labour’s MSPs but leader of the whole party in Scotland. The review group recognised that for an individual to have the authority to lead Labour in Scotland all sections of the party must be involved in his/her selection and know their views will count. So the base from which a future leader can be drawn has been expanded. No longer will a candidate have to be an MSP, instead any Labour parliamentarian will be free to stand – MPs, MSPs and MEPs. However, it will be clear that whoever becomes leader will be Labour’s candidate for First Minister of Scotland. Expanding the gene pool from which a future leader is drawn is a first but insufficient step. The basic building block of Labour Party organisation has always been its Constituency Parties (CLPs). These are based on Westminster boundaries. The consequence has been that gearing up to fight a general election has been much easier than preparing to fight a Scottish Parliament election. Often MSPs or candidates have had to deal with two, three or even four CLPs, wasting time, effort and money on internal organisation when their time would have been more productively spent linking into their local communities. The new organisational base for Labour in Scotland will be based on Scottish Parliamentary boundaries reflecting our determination to have an organisation fit for purpose to fight the Scottish Parliament elections in 2016. – Scotland on Sunday

Proposals by MP Jim Murphy will go before their ruling executive committee today which could “transform” the party. The blueprint is the result of a four-month review led by Murphy and MSP Sarah Boyack following Labour’s crushing defeat in the Holyrood election. Insiders who have seen secret presentations by the pair say the plans amount to Labour’s biggest shake-up since 1918. But some changes could prove so controversial with sections of of the party that there are no guarantees the committee of MPs, MSPs, union leaders, local party bosses and others will give their approval when they meet in Glasgow today. Under the radical plans, Scottish Labour would: Loosen ties with the UK party, Appoint a Scottish leader – who might not be an MSP – with unprecedented powers to shape policy and plan strategy north of the Border, Kick out long-serving MPs and MSPs and train a new generation of “top notch” candidates, Reconnect with the business world and Haul themselves into the 21st century by using social media for campaigning. – Daily Record

Don’t cut the 50p rate

One of the biggest names in British business has told the government not to scrap the new 50p rate of income tax. The former head of Marks & Spencer, Sir Stuart Rose has not only said he opposes the move but is happy to pay more tax to help the country out of its current financial difficulties. Rose is the biggest name so far to oppose the move which has been backed by a group of 20 economists on Wednesday, who feel the levy is hurting the UK’s competitiveness. Rose told BBC Radio 4’s Hard Talk yesterday: ‘I don’t think that they should reduce the income tax rate. How would I explain to my secretary that I am getting less tax on my income, which is palpably bigger than hers, when hers is now going down?’ Rose’s comments are in stark contrast to former Conservative Chancellor Nigel Lawson who urged George Osborne to axe the 50p top rate of income tax, warning it is ‘dangerous’ and ‘foolish’ to leave it in place. – Daily Mail

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Monday News Review

15/08/2011, 06:49:41 AM

Real politics returns

Ed Miliband will today accuse the ­Government of resorting to “gimmicks” as David Cameron pledges a “social fightback” against the rioters. The PM will promise to reverse the “slow motion moral collapse” that has taken place in parts of Britain. In a speech, Mr Cameron will also accuse some parts of Government of being de-moralised and will blame the breakdown on a ­bureaucratic society that twists human rights laws. Meanwhile, Work and Pensions ­Secretary Iain Duncan Smith has vowed to make “life hell” for those responsible for the violence. He wants a war on gangs and says that their leaders must be “harassed” by tough policing. As part of the zero-­tolerance policy, boot camp-style academies could be introduced for young offenders. Other plans would see police work with the Driving Standards Agency and TV Licensing to check gang members have paid taxes and motoring fines. But in a sign the political truce on the riots is over, Labour leader Mr Miliband will warn against knee-jerk reactions. – Daily Mirror

The prime minister will go head to head with the leader of the opposition as the two make speeches setting out their competing analyses of the riots and looting. The pair make similarly emphatic condemnations of the rioters, but in a speech at his old school in Camden, Ed Miliband, theLabour leader, will denounce Cameron’s ideas to deal with rioters, put forward over the weekend, as “gimmicks”. Miliband will also link the behaviour of the looters and bankers, phone hacking and MPs’ expenses scandals, saying: “It’s not the first time we’ve seen this kind of me-first, take-what-you-can attitude. The bankers who took millions while destroying people’s savings: greedy, selfish, immoral. The MPs who fiddled their expenses: greedy, selfish, immoral. The people who hacked phones to get stories and make money for themselves: greedy, selfish and immoral. Let’s talk about what this does to our culture.” Today, Cameron will push his long-held opinion that parts of Britain are broken, despite opinion polls that show the public believes he has not handled events well. He will say today that government ministers from both parties will audit their portfolios for policies aimed at mending the “broken society”. – the Guardian

Named and shamed

The Crown Prosecution Service is to order prosecutors to apply for anonymity to be lifted in any youth case they think it is in the public interest. The law currently protects the identity of any suspect under the age of 18, even if they are convicted, but it also allows for an application to have such restrictions lifted, if deemed appropriate. Theresa May has revealed that she wants as many of the young criminals identifying as possible. She said: “When I was in Manchester last week, the issue was raised to me about the anonymity of juveniles who are found guilty of crimes of this sort. What I’ve asked is that CPS guidance should go to prosecutors to say that where possible, they should be asking for the anonymity of juveniles who are found guilty of criminal activity to be lifted.” – Daily Telegraph

Theresa May said guidance should be given to prosecutors that juveniles found guilty of criminal activity may lose their legal anonymity. She was firing the starting gun for the “zero tolerance” approach advocated by David Cameron to make life impossible for gang members. The Home Secretary also backed up actions by some councils who have threatened to evict the families of those found guilty of being involved in rioting. Wandsworth council became the first to serve an eviction notice after an 18-year-old man appeared in court following rioting near Clapham Junction, south London. – Daily Express

Bratton widens the rift

In a new low for relations between the police and politicians, senior officers ridiculed the Prime Minister’s decision to appoint American ‘supercop’ Bill Bratton to advise the Government on gang warfare. And in a new broadside about plans for 20 per cent budget cuts to the police, the Mayor of London insisted that crime will come down only if there are more police on the streets. Senior policemen angrily denounced Home Secretary Theresa May for suggesting that it was politicians who turned around the initially sluggish police response to last week’s riots. Sir Hugh Orde, president of the Association of Chief Police Officers, complained that commanders had their hands tied by human rights laws. The increasingly acrimonious relationship between politicians and police gained new impetus yesterday when Mr Cameron signalled his support for Mr Bratton’s zero tolerance approach to cleaning up crime when he ran the police departments in New York and Los Angeles. Mr Bratton was initially mooted as the next Metropolitan Police Commissioner – a positions in which he said he was ‘seriously interested – but the idea was blocked by Mrs May. Instead, Mr Bratton will join a taskforce on gangs. – Daily Mail

Osbourne shows his true blue colours

George Osborne has confirmed he wants to scrap the 50p top rate of tax because it is not raising significant amounts of money for the Treasury. The Chancellor branded the 50p rate “uncompetitive” and said there was “not much point” in having taxes that brought in little revenue. “I have said with the 50p rate I don’t see that as a lasting tax rate for Britain because it’s very uncompetitive internationally, and people frankly can move. What is it actually raising? It’s only been in operation for a year this tax.” The Chancellor’s intervention will cheer Conservative backbenchers but puts him on a collision course with senior Liberal Democrats, who have said cutting taxes for the poor should be a priority. – the Independent

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