Peter Hoskin

Why Labour’s 50p tax wobble is dangerous for Ed Miliband

Why Labour's 50p tax wobble is dangerous for Ed Miliband
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Why did Gordon Brown wait until the last few weeks of Labour's thirteen-year reign to implement a 50p tax rate? Easy. Because it wasn't so much a fiscal policy as a fiendish trap, designed to cut into a Tory government's flesh. But now, it seems, the trap has snared another victim: Labour itself.

The Telegraph's Daniel Knowles has already neatly summarised the politics arising from Sam Coates' report (£) that Labour will neither back the scrapping of the 50p rate nor promise to reinstate it either. But the basic point is worth repeating: if that's the approach that Labour chooses, then they'll be left in a complete mess. They can attack the coalition all they like for cutting taxes for high earners, but the answer will come back, ‘well, would you keep it?’ And they wouldn't have an answer, or at least not a very persuasive one. Come the next election, they'd have to decide whether to campaign to increase the tax, or just to yield to the coalition's policy.

Of course, Oppositions do not have to provide every detail of their policy programme so far away from an election. But this ‘we do not agree with the coalition, but we do not necessarily disagree with them either’ strategy is becoming a defining — and tragic — feature of Ed Miliband's leadership. From spending cuts to EU fiscal compacts, such flaccid oppositionalism is present everywhere. Little wonder that Labour MPs are becoming increasingly disgruntled.

But what makes this 50p moment particularly dangerous for the Labour leader is that it goes against much of what we've previously heard about him. His instincts, it was once said, are to keep the 50p rate for good. This was then watered down to the position that, ‘it is “inconceivable” that the 50p tax rate won't be needed at the time of the next election.’ And now it could be diluted even further. If Miliband lacks the force of his convictions on this one policy, then — Labour might ask — is he actually leading, or just following?