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Monday 21 May 2012

The New Class War

Wednesday, 2nd December 2009

James argues, quite correctly in my view, that it is now clear that Gordon Brown is preparing to run a campaign arguing that, as Brother Forsyth puts it, "a Cameron government will be a government of the rich, by the rich, for the rich." Ben Brogan makes the same point in his column today:

In a fight to the death, there is no longer any point pretending to govern in the national interest. As it was in the beginning for Labour, so shall it be in the end: class war, plain and simple. Soak the rich, crow about it, and damn the consequences.

It's true that this is red meat for the Labour base - precisely the constituency Brown must rally first - and it's also true that it dovetails with a classic Shrumian narrative of "the people against the powerful" and "the many, not the few". These are familiar tunes and it is, in some respects, a mark of some desperation and of how much Labour has retreated from the New Labour "project". But is it entirely unfair?

This is what the Conservatives' website promises on taxation:

•    We will freeze council tax for two years by reducing wasteful spending on advertising and consultancy in central government
    •    We will introduce a £50bn National Loan Guarantee Scheme to underwrite bank lending to businesses and get credit flowing again
    •    We will provide tax cuts for new jobs with a £2.6bn package of tax breaks to get people into work, funded by money that would otherwise go on unemployment benefit
    •    We will cut the main rate of corporation tax to 25p and the small companies' rate to 20p, paid for by scrapping complex reliefs and allowances
    •    We will give small and medium-sized businesses a six-month VAT holiday, funded by a 7.5% interest rate on delayed payments
    •    We will cut National Insurance by 1% for six months for firms with fewer than five employees, paid for from the above changes to the company tax regime
    •    We will abolish Stamp Duty for nine out of ten first-time buyers and raise the Inheritance Tax threshold to £1 million. Both of these changes will be funded by a flat-rate charge on non-domiciles.

Now you may say that, individually, these are all sensible, even laudable commitments. And you may be right. It is also true, as the Tories say, that " Brown's economic mismanagement means we can’t offer big upfront net tax cuts like some other countries." But look at that list again: for all that help for business is welcome, even vital, it remains the case that there's almost nothing in that list for the family on average wages. More to the point, the only people promised a tax cut are the minority of people who would otherwise face paying inheritance tax. What this really means, then, in most cases, is a bonanza for people whose parents die during the next parliament. In other words, a minority of a minority.

On one level this is symbolic stuff and, sure, symbols matter. But if you offer a clear and, alas, easily-demagogued commitment to reducing taxes on the rich while offering little to nothing for those on average wages then you can't really or honestly complain if this is used against you.

That doesn't mean I think the Tories should drop their inheritance tax proposals (not least because they're not wholly unreasonable) but it does suggest they offer something more to the guy earning £20,000 a year.

Of course, the Tories might argue, with some reason, that a freeze on Council Tax benefits the average family in real terms. True. But "real terms" tax benefits are a tougher sell than actual-see-it-in-your-pay-packet reductions. And, in any case, for the minority of people paying attention to the Tories' localism project, freezing Council Tax makes one wonder (again!) how genuine their commitment to localism really is. Making councils even more dependent upon central government for their financing does not seem an obvious way of increasing local flexibility and accountablility. In other words, one part of the Tory "message" contradicts another part of it.

So while I might - nay, do! - find Labour's "class war" rhetoric tedious and juvenile it's not immediately obvious that the Tories haven't, in some ways, invited it upon themselves.

*Note, however, that this is to be paid for by "reducing wasteful spending on advertising and consultancy in central government." That smacks of back-of-an-envelope scribbling if ever any promise did.

Filed under: Labour (2135 more articles) , Tax (182 more articles) , Tories (273 more articles)

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ndm

December 3rd, 2009 2:05am Report this comment

I liked the way in which each of the proposals had individualized funding source including the ever-popular chestnut "reducing wasteful spending." The Conservatives need to be reminded that Government revenue is fungible.

Dave B

December 3rd, 2009 7:59am Report this comment

Don't the Tories have a priority of reversing a rise in NI for the lowest paid, that Mr Darling announced in last years budget?

David Bouvier

December 3rd, 2009 9:34am Report this comment

Well, not increasing council tax does a lot for the family on a tight budget.

Helping small and medium sized business with cash flow problems will help a lot of people keep there jobs or small businesses going.

IHT is expensive to collect and raises little money, but worries people. And £1m is now half the Lib Dems mansion tax threshold.

Aside from these being policies designed to actually help people rather than scorch the earth or earn a Mirror headline, that they might actually have to implement, what have you got against them?

It may take more than a sound bite to explain, but they are the right policies.

Should we push the wrong policies for convenience, or assume the people are not entirely stupid.

Nicholas

December 3rd, 2009 9:41am Report this comment

"a Cameron government will be a government of the rich, by the rich, for the rich."

In that case then, presumably the current New Labour hegemony will be voting Tory?

Beer Moth

December 3rd, 2009 10:13am Report this comment

And neither party will do a damned thing about immigration which continues apace.

daniel maris

December 3rd, 2009 1:41pm Report this comment

The Conservatives have only themselves to blame. But turning their backs on populism and signing up in full to the PC agenda, they have isolated themselves from the people and put a load of rich public school boys in the window display.

They are adrift on Europe, wobbly on the economy, unconvincing on mass immigration.
They have made a huge strategic error in targetting the public sector in general and conditions of employment.

The populist position should have been to mercilessly attack government waste and argue that if we cut that out - get rid of nonsense jobs, the huge money-sucking IT schemes and so on whilst at the same time tackling welfare dependency - we could balance the books.

They're more concerned about what the FT thinks then what the people think. Look at their pathetic silence over dangerous dogs. There is a huge majority in the countries that loathes them and wants something done but the Tories are pathetic about that.

Richard

December 3rd, 2009 5:25pm Report this comment

"...for all that help for business is welcome, even vital, it remains the case that there's almost nothing in that list for the family on average wages..."

Sorry, but where do you think that average wage comes from?

Is it not good to allow more people to draw that average wage, and those on it to have it increase? Helping business helps people, as business is vital to everyone, from the wealthy owner through the workers to the unemployed who live off the taxes those business, wealthy business owners and workers pay.

That list looks precisely like governing for all, as opposed to Labour's government for the special interest that harms even those clients in the long term.

ndm

December 3rd, 2009 7:04pm Report this comment

Helping business helps people, as business is vital to everyone, from the wealthy owner through the workers to the unemployed who live off the taxes those business, wealthy business owners and workers pay.

Got to love that old trickle-down theory. Along with the Laffer curve it is the conservative version of ... of .... of ... cold fusion.

Beer Moth

December 3rd, 2009 7:25pm Report this comment

daniel maris.

Are you honestly stopping people in the street and asking them if they loathe dogs?

You'll get locked up mate, like that bloke on the bus with his Fray Bentos bomb.

Beefeater

December 3rd, 2009 8:25pm Report this comment

"... a government of the rich, by the rich, for the rich."

About time.
Much prefer the deserving rich to the idle poor.

daniel maris

December 3rd, 2009 11:56pm Report this comment

Beermoth -

Er no. People are intelligent enough to notice the difference between a Yorkshire terrier and a pit bull cross breed. They know about the people in their area - the ones who are drug dealers, petty criminals, violent thugs or BNP bovver boys.