Well, those tax attacks worked out well, didn’t they? Tax avoidance is on the front pages of the newspapers, but not in a way that benefits either main political party.
Even though George Osborne’s guide to minimising your tax bill has gone viral, Labour isn’t benefitting because it has ended up talking about receipts for hedge trimmers, not the activities of hedge funds. It was a wrong turn easily taken by Labour but one that makes week three of its tax avoidance row messy.
Week one was messy partly down to Balls, too, after his ‘Bill Somebody’ interview, which fed the narrative that Labour was ‘anti-business’. Week two was better because Ed Miliband’s high stakes gamble with Lord Fink paid off after the peer backed down in an interview with the Evening Standard, and because the Tories had started the week auctioning their ministers to donors at the Black and White Ball. This week had the potential to start well, but by 11 o’clock on Sunday, after Balls had told John Pienaar about his receipt-keeping activities.
Perhaps Labour’s good week last week was just down to good luck. Lord Fink might not have blinked. The row that started all this off, with Stefano Pessina, might not have coincided with the Black and White Ball.
But in any case, far bigger than how many years’ worth of window-cleaning receipts Ed Balls has, or however many ‘Minimising Your Tax Bill with George Osborne’ videos there are, is a crisis not just rumbling but roaring in the eurozone. As James explained in the magazine recently, the fallout from what is happening in Greece will, unsurprisingly, be far bigger than any scrap about tax.
But Labour should be worried that it cannot turn what should be a straightforward discussion about bad behaviour in banking into a strong political debate and that instead it has ended up talking about hedge trimming. With more organisation, this could have been a knockout three weeks for the party. Instead, it has been far more scrappy, in both senses of the word.
P.S. It is worth noting that the Institute of Directors quite liked Ed Miliband’s ‘pro-business speech yesterday. Here’s what Christian May had to say:
‘The Labour leadership seems to have found its voice in the debate about the importance of successful businesses. This is an important change in tone from Ed Miliband and one which will be welcomed by the business community. After all, business and enterprise must be supported and celebrated, not just tolerated. In particular, Miliband’s focus on creating long-term value by boosting productivity and addressing the skills gap will win the support of employers.
‘However, it is hard to square this new-found enthusiasm for wealth creation with Labour’s commitment to reintroducing the inefficient 50p rate of tax. New figures show that revenue raised from these taxpayers jumped by £8bn after it was cut, proving that reinstating the punitive 50p rate would do more harm than good.’
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