The 45p gambit is all about politics not raising revenue. Brown knows jolly well that even on a static calculation it only raises two and a bit billion and in reality will bring in far less. However, Brown is hoping that the move will either lure the Tories into vocal opposition, allowing him to paint them as defenders of the privileged rich, or cause division in their ranks. (The move, though, does only increase one’s annoyance that the Tories didn’t move to counter-act this by offering their own middle class tax cut over the summer.)
Its shameless pre-leaking was also designed to distract attention from the far more significant tax rises, for instance the expected increase in national insurance contributions—which is equivalent to a rise in income tax, and creates yet another false narrative: all this massive borrowing and the attendant tax cuts can be paid for with a tax on the super-rich.
So, it is encouraging to see the Tories not falling into this trap. Philip Hammond’s response when asked about the issue was pretty much pitch-perfect:
Today is going to be a test of the Tories calmness under pressure and the ability of their spin operation’s ability to spot the traps that Brown is laying for them. Their refusal to take the bait on 45p suggests that they might be more ready for this challenge than people think.“Clearly if the government is going to announce a huge package of additional borrowing today there will have to be large tax rises after the election. Of course people on higher incomes will have to pay their share of that but don’t let anybody be deluded by the political spin into thinking that the black hole that Labour has created will be filled by a tax on a really quite small number of very higher earners, it wont. We are talking about a couple of billions of pounds, the hole is likely to be a hundred billon pounds big, its going to require tax rises across the board and I’m afraid it will be ordinary families and businesses that are hit not just the very rich.”
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