Benn's history lesson on tax

Income tax reached 95 per cent under Churchill

Tony Benn has a history lesson for those who depicted Gordon Brown as Lenin after the government announced its decision to raise the top rate of income tax to 50 per cent. He writes:

The modest increase announced for wealthier people has been denounced by the City but it is nothing compared to the highest level when Churchill left office in 1945 - 95%, justified on the grounds that the money was needed to fight the war and that the rich should share the burdens that others had to bear. These arguments apply to the present economic crisis.

Even Margaret Thatcher managed to live with a top rate of 60 per cent for nine years. As I've argued elsewhere today, I think the government should now focus on raising taxes on unearned income to plug the deficit. But Labour should still cite history to rebut the clichéd charge that they will "tax the rich till the pips squeak".

Incidentally, just as Voltaire never said "I disapprove of what you say, but I will defend to the death your right to say it" (that was his biographer Beatrice Hall) and Jim Callaghan never declared "Crisis? What crisis?" (that was a Sun headline writer), so Denis Healey never uttered those famous words.

His actual words to Labour's party conference were: "I warn you that there are going to be howls of anguish from those rich enough to pay over 75 per cent on their last slice of earnings".

George Eaton is political editor of the New Statesman.

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How Theresa May laid a trap for herself on the immigration target

When Home Secretary, she insisted on keeping foreign students in the figures – causing a headache for herself today.

When Home Secretary, Theresa May insisted that foreign students should continue to be counted in the overall immigration figures. Some cabinet colleagues, including then Business Secretary Vince Cable and Chancellor George Osborne wanted to reverse this. It was economically illiterate. Current ministers, like the Foreign Secretary Boris Johnson, Chancellor Philip Hammond and Home Secretary Amber Rudd, also want foreign students exempted from the total.

David Cameron’s government aimed to cut immigration figures – including overseas students in that aim meant trying to limit one of the UK’s crucial financial resources. They are worth £25bn to the UK economy, and their fees make up 14 per cent of total university income. And the impact is not just financial – welcoming foreign students is diplomatically and culturally key to Britain’s reputation and its relationship with the rest of the world too. Even more important now Brexit is on its way.

But they stayed in the figures – a situation that, along with counterproductive visa restrictions also introduced by May’s old department, put a lot of foreign students off studying here. For example, there has been a 44 per cent decrease in the number of Indian students coming to Britain to study in the last five years.

Now May’s stubbornness on the migration figures appears to have caught up with her. The Times has revealed that the Prime Minister is ready to “soften her longstanding opposition to taking foreign students out of immigration totals”. It reports that she will offer to change the way the numbers are calculated.

Why the u-turn? No 10 says the concession is to ensure the Higher and Research Bill, key university legislation, can pass due to a Lords amendment urging the government not to count students as “long-term migrants” for “public policy purposes”.

But it will also be a factor in May’s manifesto pledge (and continuation of Cameron’s promise) to cut immigration to the “tens of thousands”. Until today, ministers had been unclear about whether this would be in the manifesto.

Now her u-turn on student figures is being seized upon by opposition parties as “massaging” the migration figures to meet her target. An accusation for which May only has herself, and her steadfast politicising of immigration, to blame.

Anoosh Chakelian is senior writer at the New Statesman.

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