Balls keeps his options open on 50p tax

Shadow chancellor refuses to say whether he still wants the starting threshold lowered to £100,000.

There wasn't much that we hadn't heard before in Ed Balls's interview with Andrew Marr this morning. Labour's Keynesian pitbull deployed his usual attack lines against George Osborne, admitted that the Brown government didn't do enough to regulate the City and refused to concede that Labour overspent in the years leading up to the crash.

But one line caught my ear. Asked whether he still thought that the starting threshold for the 50p tax rate should be lowered from £150,000 to £100,000, Balls replied: "We've not sat down and discussed tax policy." In other words, he's still hoping to have the debate with Ed Miliband.

The Labour leader supports a permanent 50p rate, although Alan Johnson's presence saw a greater emphasis on merely retaining it "for this parliament", but he has never publicly supported reducing the threshold to £100,000.

One reason why it's worth watching Balls's statements on the 50p tax is that he is at one with public opinion on this subject. A Sunday Times/YouGov poll published today found that 33 per cent think the top rate should eventually be brought down, 49 per cent think it should be made permanent (the Miliband position) and 51 per cent would like to see the threshold brought down to £100,000, with 29 per cent opposed.

George Osborne's recent statement that the 50p rate is "temporary" (in contrast to the "permanent" VAT rise) suggests that he plans to offer significant cuts in direct taxation at the next election. After years of falling living standards, which taxes Labour and the Tories choose to keep and which they choose to cut will do much to determine the result in 2015.

George Eaton is political editor of the New Statesman.

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Article 50: Theresa May tries to charm the EU but danger lies ahead

As the Prime Minister adopts a more conciliatory stance, she risks becoming caught between party and country. 

She may have been a "reluctant" one but a Remainer Theresa May was. The Prime Minister's first mission was to reassure her viscerally anti-EU party that Brexit meant Brexit. Today, by invoking Article 50, she has proved true to her word.

In this new arena, it is not Britain that has "taken back control" but the EU. When Brussels drew up the divorce proceedings it did so with the intention of maximising its influence. The withdrawal deal that Britain reaches must be approved by at least 72 per cent of member states, representing 65 per cent of the EU’s population. The two-year deadline for leaving can only be extended by unanimous agreement. Even the much-maligned European Parliament has a vote.

While keeping her famously regicidal party on side, May must also charm her 27 EU counterparts. In her Commons statement on Article 50, she unmistakably sought to do so. The PM spoke repeatedly of a new "deep and special partnership" between Britain and the EU, consciously eschewing the language of divorce. In contrast to Donald Trump, who pines for the EU's collapse, May declared that "perhaps now more than ever, the world needs the liberal, democratic values of Europe" (prompting guffaws and jeers from Tim Farron's party and the opposition benches). Indeed, at times, her statement echoed her pro-Remain campaign speech. 

Having previously argued that "no deal is better than a bad deal", the Prime Minister entirely ignored the possibility of failure (though in her letter to the EU she warned that security cooperation "would be weakened" without an agreement). And, as she has done too rarely, May acknowledged "the 48 per cent" who voted Remain. "I know that this is a day of celebration for some and disappointment for others," she said. "The referendum last June was divisive at times. Not everyone shared the same point of view, or voted in the same way. The arguments on both side were passionate." 

Having repeatedly intoned that "we're going to make a success" of Brexit, May showed flashes of scepticism about the path ahead. She warned of negative "consequences" for the UK: "We know that we will lose influence over the rules that affect the European economy. We know that UK companies that trade with the EU will have to align with rules agreed by institutions of which we are no longer a part, just as we do in other overseas markets. We accept that." May also acknowledged that any deal would have to be followed by a "phased process of implementation" (otherwise known as transitional agreement) to prevent the UK falling over what the PM once called the "cliff-edge". 

In Brussels, such realism will be welcomed. Many diplomats have been stunned by the Brexiteers' Panglossian pronouncements, by their casual insults (think Boris Johnson's reckless war references). As the UK seeks to limit the negative "consequences" of a hard Brexit, it will need to foster far greater goodwill. Today, May embarked on that mission. But as the negotiations unfold, with the EU determined for the UK to settle a hefty divorce bill (circa £50bn) at the outset, the Prime Minister will find herself torn between party and country. Having delighted the Brexit-ultras to date, will she now risk alienating the Mail et al? The National Insurance debacle, which saw the government blink in the face of a small rebellion, was regarded by Remainers as an ominous precedent. May turned on the charm today but it will take far longer to erase the animosity and suspicion of the last nine months. 

George Eaton is political editor of the New Statesman.