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Is it ‘just politics’, or do we deserve better?

I watched Ed Miliband’s speech on television yesterday, and I found it, and him, impressive. Having met him once, and having been astonished to find him so impressive in the flesh, I had always been surprised about what a geek he comes across as on the box. Yesterday, I thought he did a lot to change that.

But the thing that I absolutely hated about his speech, and his comments on television since (as reported in tonight’s Evening Standard), is the way in which he has so disingenuously tied David Cameron’s own personal position to the 5% tax cut at the top end of the spectrum.

The whole “the cut is like writing a cheque for £40,000 to the richest people” approach, I can handle, inaccurate though it is. I can also just about accept, very reluctantly, the giving of an impression that the 330,000 people who are millionaires are affected by the tax cut, rather than the 6,000 who have an income over £1million a year. What I detest is the tying together of ‘Cameron’, ‘millionaire’, ‘top tax rate’, ‘£40,000’, and ‘he’s writing a cheque to himself’, in a way which is just the worst kind of smoke and mirrors.

David Cameron earns £142,000 a year. He also has income from renting his house, but none of us knows whether that is offset against a mortgage. We can assume for the moment that it isn’t, and that the income from that, or perhaps from dividends, takes him just over the £150,000 top-rate threshold.

Ed Miliband, meanwhile, earns £132,000. He can’t rent his house out, because he’s living in it. If he gets to Downing Street, his having a new residence means that presumably he will. I have no idea whether he has dividend income as well, and don’t really care. The long and the short is that in terms of income that we know about for sure, he is £10,000 worse off than Mr. Cameron, and their positions might reverse at the next election.

On the basis of their known incomes, neither falls into the top tax bracket; on the basis of our assumptions about Mr. Cameron, it is possible – likely, even – that Mr. Cameron does, but almost certainly by a small amount. If he has any sense in managing his finances, he won’t be making bundles on his rented house, so it is safe to assume that he goes over the £150,000 threshold by a few grand at most. Mr. Miliband may be the same through dividends, but may not be. Either way, it’s close. Every thousand pounds over the £150K means a saving to either one of them of £50 a year.

While Mr. Miliband claims that the point is ‘about cutting tax for a section of the population while the Prime Minister was among them’, the rhetoric is clearly designed to muddle wealth and income, and to tie Mr. Cameron personally to £40,000 in savings. He has made a point of repeatedly saying that Mr. Cameron is a millionaire (as Andrew Neil rightly skewered Douglas Alexander for on yesterday’s Daily Politics), and the intention is quite clearly to imply, and nail into the public consciousness, that Mr. Cameron is getting a £40,000 cheque.

Mr. Miliband himself, meanwhile, baulks at suggestions that his £1.6m house means that he, too, is a millionaire, and that if you are comparing apples with apples, then everything he says about Mr. Cameron on this subject is also true of him: if we’re talking about millionaires in wealth terms, they’re both in; if we’re talking about incomes of a million, neither is close; and if we’re talking about falling into the top rate of tax, then the chances are that both do by a very small amount, or both miss it by a fraction. In this latter category, their positions are close, and could easily be reversed before long.

We were debating this in the Camberton office today, and the reaction of one of my colleagues was, “that’s politics”. Why do I care, when there are so many other things to worry about?

I care because in my view, the statement that “that’s politics” is simply not enough to excuse it. Our politicians are forever asking why the public is tiring of politics, and I think that much of the reason for that is that points like this one are made which deliberately seek to distort the truth. Like Mr. Cameron, who arrived at the top of the greasy pole saying that he wanted to end ‘Punch and Judy politics’, Mr. Miliband arrived in the leadership with some similar platitude about wanting a new, more grown-up, form of debate. So why does he decide to imply a falsehood, as he has, when he has a perfectly valid point that he can make without it?

In short, if Mr. Miliband has a point to make which he thinks is strong enough, he should make it: if he wants to argue that a 5% cut in the top rate of tax is bad for the country (and why), and bad for the country’s economy (and why); and that he would reverse it given the chance, then good luck to him. He should say what he thinks, explain it, and stand by it. There’s an argument to be made, so why not make it straight?

Perhaps he thinks it isn’t strong enough straight, which would tell a story in itself: perhaps he wouldn’t reverse it (his mentor Gordon Brown introduced it, after all, saying it was temporary). Whatever the reason, though, my view is that we deserve better that to watch our prospective leaders dragging their opponents into debates on a personal basis in a way that is completely misleading.

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2 Responses

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  1. PPBox says

    I’m afraid that is modern politics, Mark, and yes we do deserve better.

    Take the “scandal” of Barclays being “forced” to admit that it “only paid 1% tax” in 2009 by Labour shadow minister Chuka Umunna. The majority of the £11.6Bn profit came from the sale of its fund-management arm BGI to Blackrock, a transaction which doesn’t attract tax. A clever wheeze by the evil geniuses at Barclays? The exploitation of an obscure tax loophole?

    Nope, it was the explicit policy of the last Government, brought in under the Finance Act 2002 by Gordon Brown and while the current Leader of the Opposition and Shadow Chancellor were working for HM Treasury!

    As with the example you cite, whether large companies should be taxed on substantial disposals is a topic whose merits could be discussed. Equally we could consider whether Barclays engages in unacceptable tax avoidance. But how can a Labour shadow minister hammer a company publicly for not paying tax on something his own party exempted from tax by law when they were in power?

    And then come election time they’ll all be wringing their hands together wondering why so few people bothered to vote.

Continuing the Discussion

  1. Ed Miliband: Is it ‘just politics’, or do we deserve better? | Speaker's Chair linked to this post on October 4, 2012

    […] post first appeared on Mark’s blog here, and is reproduced on Speaker’s Chair with his […]

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