The New Class War

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.