Ed Miliband's tax dilemma

He's promised to tax more than Brown and Darling. But which should he raise?

The Tories have given us a preview of one of the strategies we can expect them to use against Ed Miliband, in a new Matt Hancock-penned dossier entitled: "which taxes would you put up, Mr Miliband?".

Miliband has pledged to support a 50:50 split between tax rises and spending cuts, the same balance adopted by Norman Lamont and Ken Clarke during the last period of significant fiscal tightening in the 1990s. This marks a break with the Brown-Darling plan which adopted a 67:33 split between taxation and spending.

In a interview with Channel 4 News last night, Milband confirmed that he would "do more from taxation" than Darling and cited his plans for a higher banking lavy and a crackdown on tax avoidance. The last Labour government planned £73bn of spending cuts and tax rises (George Osborne has announced an additional £40bn) which means that, assuming he retains the £21bn tax rises announced by Darling, Miliband needs to raise an additional £15.5bn from taxation.

As well as a beefed-up banking levy, which would raise an extra £5bn, he should consider reviving the original Lib Dem plan to tax capital gains at the same rate as income (the Tories limited the rise to 28 per cent). This would raise £3.2bn and have the advantage of dividing the coalition, while also wooing disillusioned Lib Dem supporters. Cutting the annual CGT exemption to £2,000 from its present level of £10,100, would raise a further £900m.

The Miliband team should also look at poaching the Lib Dem plan for a "mansion tax", a policy supported by David, but not Ed, during the leadership campaign. A 1 per cent a year levy on homes worth more than £2m would raise at least £1.7bn. These measures, combined with a tax avoidance crackdown of the sort planned by the coalition, would comfortably raise enough for Miliband to fulfil his 50:50 pledge.

By the end of the conference season and the all-important spending review, he will need to have some answers.

George Eaton is political editor of the New Statesman.

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PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

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