The Wilted Rose

Charting Labour meltdown 2007-2010

The TPA has won the argument, but can someone please tell Labour?

The TaxPayers’ Alliance (TPA), which was only formed in 2004 by Andrew Allum, Matthew Elliott and Florence Heath “to represent taxpayers and to fight for lower taxes”, has won the argument on taxes.  The old consensus, which formed some time in the 1990s, that taxes should not be cut but in fact should be raised in certain circumstances, has been well and truly broken by the TPA.

Whilst the TPA has won the argument on tax – for example, Labour scrambled to make a pale imitation of George Osborne’s brilliant inheritance tax proposals – elements of the Labour left are still influencing Government policies.

No doubt the business start-up rate will fall, and indeed there may be a rush to sell small firms, due to the despicable increase in Capital Gains Tax from 10% to 18%.  This was a sop to the Trades Unions, who promise to fund Labour’s election whenever that is, who have been aggravating about Private Equity bosses for years.  Whilst the CGT increase means that Private Equity Bosses still pay less than the 20% lower band tax paid by everyone else, this measure has inadvertently penalised many small business owners.  We all knew that Brown never meant what he said about entrepreneurship, and ‘enterprise for all’, and in fact all he has achieved is damaging the British economy and the main creators of new jobs – small firms.

It was reported that £1.4bn of taxes are being raised by Darling’s “mini budget”, for example by robbing pension funds (again) and many other tax-raising, entrepreneurship-harming, family-crushing measures.

More gallingly, today’s Telegraph reports that a Labour ‘opinion former’, an adviser to Brown, recommends replacing council tax with a new income tax:

“Take Council Tax away from the local authorities and make it a national property tax, easier to administer; easier to administer more fairly. Cap the property tax by reference to income, to solve the problem of the asset rich, income poor households. But don’t do any of this without serious investment in public sector skills to capture the benefit of change.”

Yes, Council Tax is unfair, but if Labour were to go down this road they would risk experiencing the same slump in popularity that the Tories achieved when they introduced the Community Charge.  Indeed, this could be Labour’s own poll tax.  Brown is so risk averse that it is unlikely he would go down this road, but one never knows.

The TPA has won the argument on taxation, so it is time that someone actually told Labour that this is the case.  Their tax-raising ‘mini-budget’, and the fact that the TPA is leading the debate on policy, has already contributed to a slump in the Government’s fall in the opinion polls. 

Such policy measures may have been popular with Labour’s ‘core vote’ when it governed in 1945-1950, 1964-1970 and 1974-1979, but (a) Labour lost the subsequent election, and (b) the Labour ‘core vote’ is not the old socialist, ‘soak-the-rich’ (i.e. soak-the-middle-classes) types of generations past.  Many people who have voted Labour since 1997 are exactly the sort of people who would be damaged by such a measure.

Think again, Gordon et al, the TPA has won the argument.  If you go down the road of a new property/income tax, you will be well and truly obliterated at the following election.  But actually that would quite suit the youngsters, such as David Miliband, who can’t wait to get the top job, but by then the top job will  be Leader of the Opposition in a Labour Party that will be out of power for a long time.

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17 October, 2007 Posted by | economy, Gordon Brown, Labour Party, politics, public sector, taxation | 1 Comment