Ham­mond taxes Labour minds

Birmingham Post - - NEWS -

or­di­nary thresh­old, it’s peo­ple on higher wages that en­joy the big­gest in­crease in their take-home pay.

You might ex­pect Labour (espe­cially in its cur­rent, unashamedly left-wing guise) to be against this sort of thing.

But Shadow Chan­cel­lor John Mc­Don­nell has said he won’t op­pose the Chan­cel­lor’s plans.

Why? To an­swer that, take a look at Labour’s 2017 gen­eral elec­tion man­i­festo.

There was a lot of talk in that about spend­ing more money.

But it con­tained some re­as­sur­ing lines for any­one wor­ried that Labour would put up taxes.

The man­i­festo in­cluded a prom­ise of “no rises in in­come tax for those earn­ing be­low £80,000 a year, and no in­creases in per­sonal Na­tional In­sur­ance Con­tri­bu­tions or the rate of VAT”.

And it made the same pledge again, in a dif­fer­ent form, when it said “95 per cent of tax­pay­ers will be guar­an­teed no in­crease in their in­come tax con­tri­bu­tions.”

Now, we could ar­gue about whether Labour’s other plans might have an ef­fect on the in­comes of work­ing peo­ple.

But as far as in­come tax is con­cerned, the mes­sage was very clear. Or­di­nary work­ing peo­ple – even those on above-av­er­age in­comes – were told they had noth­ing to fear from a Labour gov­ern­ment.

The Shadow Chan­cel­lor may very well hope to make a sim­i­lar prom­ise at the next gen­eral elec­tion.

But this would be im­pos­si­ble if he said he planned to re­verse tax cuts an­nounced in the Bud­get. Re­vers­ing those would mean a tax in­crease for peo­ple earn­ing sig­nif­i­cantly less than £80,000.

In the­ory, per­haps, Mr Mc­Don­nell could say he “op­poses” the Tory tax cuts but pledges not to do any­thing about them when he gets into power. But that would be silly. So he’s has sim­ply said that he doesn’t op­pose the cuts at all.

Mr Mc­Don­nell was crit­i­cised by “mod­er­ate” Labour MPs for this, but to be bru­tally hon­est their views don’t count for a lot any more.

The idea that the “mod­er­ates” or “Blairites” aren’t fans of the peo­ple cur­rently run­ning the Labour Party is taken for granted.

What’s sur­pris­ing, how­ever, is that Labour leader Jeremy Cor­byn chose to come out against the tax cuts when he ques­tioned Prime Min­is­ter Theresa May in the House of Com­mons.

He asked: “Can the Prime Min­is­ter ex­plain why she chose not to end the ben­e­fit freeze for 10 mil­lion house­holds but in­stead brought for­ward a tax cut for higher earn­ers?”

A fair ques­tion per­haps, un­til you re­mem­ber that Labour says it doesn’t op­pose the tax cut Mr Cor­byn is crit­i­cis­ing the Prime Min­is­ter for.

Ei­ther he’s a bit of a hyp­ocrite or he dis­agrees with his own Shadow Chan­cel­lor on this one.

That’s not to say ev­ery Con­ser­va­tive MP is over the moon about the Bud­get.

Birm­ing­ham Tory An­drew Mitchell, MP for Sut­ton Cold­field, wel­comed many of the mea­sures, but warned that it did lit­tle to deal with what he called “in­ter­gen­er­a­tional un­fair­ness” – the idea that older peo­ple are do­ing well at the ex­pense of the young. He said: “I am espe­cially con­cerned about in­ter­gen­er­a­tional un­fair­ness, which in Bri­tain is ex­em­pli­fied in the own­er­ship, rent­ing and part-own­er­ship of homes, which the Bud­get does some­thing about. We see it also in the heavy bur­den on the younger gen­er­a­tion of univer­sity fees, and of pay­ing for the bur­geon­ing el­derly pop­u­la­tion.

“The younger gen­er­a­tion in­creas­ingly do not see the ben­e­fits of free en­ter­prise, a strong pri­vate sec­tor and cap­i­tal­ism, be­cause we Con­ser­va­tives are not stand­ing up prop­erly for those things, so I was pleased to see the Chan­cel­lor do that to some ex­tent to­day. “Cap­i­tal­ism and free en­ter­prise are not only about de­liv­er­ing white goods at the best pos­si­ble price for those on av­er­age in­comes. They are about pro­tect­ing our free­doms and lib­er­ties.”

And he said he was con­cerned about the in­tro­duc­tion of Univer­sal Credit, which has been used as a mech­a­nism for cut­ting ben­e­fit for some peo­ple.

“The car­di­nal rule gov­ern­ing ben­e­fit changes is not to use the change to take money away – to re­duce the in­come of those on ben­e­fits and at the bot­tom of so­ci­ety.

“A Gov­ern­ment can get away with a stand­still po­si­tion for the fu­ture or con­strain in­creases, but they can­not re­duce fund­ing for what is al­ready de­pen­dency in­come. When­ever the Trea­sury breaks that golden rule, iron­i­cally, it costs more.”

It’s Labour that are in dis­ar­ray over the Bud­get

> Shadow Chan­cel­lor John Mc­Don­nell

> Chan­cel­lor Philip Ham­mond

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