A winning message for Miliband?

The Labour leader should pledge to scrap the VAT increase, not merely condemn it.

Like 2010, 2011 begins with Labour and the Conservatives at war over the economy. Last year it was Alistair Darling attacking the Tories' £34bn "black hole", this year it's Ed Miliband condemning tomorrow's VAT rise. The Labour leader will take to the campaign trail in Oldham East and Saddleworth (the first big electoral test of his leadership) and attack the increase as the "wrong tax, at the wrong time".

On paper, this should be an easy win for Miliband. The VAT increase is unfair (as David Cameron noted in April 2009, "it hits the poorest the hardest"), unnecessary and economically reckless. In his campaign against the rise, Miliband can also count on the support of some unfamiliar allies, including the Taxpayers' Alliance and the Daily Mail. And he can handily remind voters that it was the Lib Dems who warned of a "Tory VAT bombshell" (before joining the assault) and Cameron who insisted during the general election campaign that he had "absolutely no plans" to raise the tax.

Miliband will say: "Today we start to see the Tory-led agenda move from Downing Street to your street. At midnight VAT goes up, hitting people's living standards, small businesses and jobs. The VAT rise is the most visible example of what we mean when we say the government is going too far and too fast."

But if he's to win over the voters, he will need to rebut the charge that Labour's profligacy made the tax rise "unavoidable". Miliband should point out that the VAT increase was only required to pay for tax cuts elsewhere: £12.4bn of the £13.5bn to be raised could have been saved, had the government not cut other taxes including corporation tax, council tax, National Insurance and income tax.

As Robert Chote noted in May, while he was still director of the Institute for Fiscal Studies: "When Mr Osborne said that 'the years of debt and spending' made the £13bn increase in VAT unavoidable you might just as well say it was his desire to cut other taxes that made it so."

After this, Miliband should pledge to scrap the rise, not merely condemn it. On too many issues, from the Spending Review to tuition fees to education, Labour's attack has been blunted by the lack of a clear alternative. This mistake must not be repeated.

George Eaton is political editor of the New Statesman.

Ellie Foreman-Peck
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Martin Schulz: could this man bring an end to the reign of Angela Merkel?

The German Eurocrat is the biggest threat to the possibility of a fourth term for Merkel. 

At first sight, Martin Schulz looks like an unlikely political saviour. Thin of hair and thick of waist, the 61-year-old was a member of the European Parliament for 23 years and its president for five. In an anti-establishment age, it was predicted that Schulz would struggle when he became the Social Democratic Party’s (SPD) candidate to replace Angela Merkel as the German chancellor in January. Instead, he is spearheading a remarkable revival in his tribe’s fortunes. On 19 February, for the first time in a decade, the SPD polled above Merkel’s Christian Democrats (CDU), attracting 33 per cent to their 32 per cent. The SPD vote share has increased by 12 points in a month. The cause is clear: “Martin mania”.

For months, it was assumed that Merkel would secure a fourth term as chancellor in September’s federal election. The SPD, the grandfather of European social democracy and Germany’s oldest party (it was founded in 1863), had polled as low as 19 per cent. After forming a grand coalition with the CDU in 2013, Schulz’s party was marginalised as Merkel claimed credit for policies such as the country’s first minimum wage. Voters defected to the far-left Die Linke and the far-right Alternative für Deutschland. The SPD’s future looked to be one of managed decline.

Sigmar Gabriel, the party’s leader since 2009, stood little chance of supplanting Merkel as chancellor. As a result, like François Hollande, he reached for the pearl-handled revolver: he announced his intention to step aside on 24 January after internal SPD polling showed that Schulz would perform significantly better against Merkel. “It was not an easy decision but I’m convinced it was the right decision,” Gabriel told reporters. His judgement was vindicated as public polls gave Schulz an 11-point lead over Merkel (49-38).

The German chancellor’s apparent unassailability owed less to her strength than to her opponents’ weakness. Eleven years after she entered office, voters had grown weary of Merkel’s leadership but saw no viable alternative. In Schulz, they have found one. Having been engaged at EU level and held no domestic office since standing down after 11 years as mayor of the north-western market town Würselen in 1998, Schulz has been embraced by voters as a relative outsider.

Unlike his SPD colleagues, Schulz can criticise the CDU’s record without appearing hypocritical or feeble. He has attracted voters with a centre-left emphasis on redistribution and social justice. “When people see that their taxes are used to give their children a future, they buy into it,” Schulz has said in interviews.

The European Parliament has been a useful platform for his pugnacious style. He is best known for being compared to a concentration camp guard by Silvio Berlusconi in 2003 and for his interjection in 2010 after Nigel Farage branded the then EU president, Herman Van Rompuy, a “damp rag”. Schulz retorted: “It’s not right that this man should be able to trample over the dignity of this house!”

Voters have warmed to Schulz’s personal story as well as his political history. He was born on 20 December 1955 in the village of Hehlrath, North-Rhine Westphalia, to a policeman father and a homemaker mother (he is the youngest of five). Rather than going to university, he trained as a bookseller and was a promising footballer. Two severe knee injuries ended his playing career at the age of 18 and he sought refuge in alcohol after falling into depression. Having contemplated suicide, he recovered to open a bookshop in his home town (which he ran until he became an MEP in 1994) and has been teetotal since 1980.

Schulz educated himself by devouring historical fiction (his favourite writers are John Steinbeck and Giuseppe Tomasi di Lampedusa) and retains the restlessness of an autodidact (he often works 18-hour days). His bonhomie and blunt manner appeal to voters who regard Merkel as aloof.

That Schulz has come to the SPD’s rescue is unsurprising. He joined the party at the age of 19 and became the youngest mayor in North-Rhine Westphalia when he was elected in Würselen at 31. After more than two decades serving the EU, the attractions of a return to domestic politics were obvious. “People must look into your eyes and see that you are a bloody streetfighter,” he remarked in 2013, as he presciently dismissed Ed Miliband’s electoral chances.

Schulz has disoriented the Christian Democrats, who failed to anticipate a centre-left renaissance. In a mark of how much he has unsettled them, the German finance minister, Wolfgang Schäuble, has denounced him as a Trump-like populist for his slogan “Make Europe great again”. Were Schulz to replace Merkel and Emmanuel Macron to be elected French president, the pair would unite in seeking to impose punitive Brexit terms on the UK.

For Germany’s Social Democrats, the fear is that Schulz’s surge has come too soon – voters could swing back to Merkel and the CDU before polling day. But after years as an emblem of centre-left malaise, the SPD has momentum. Schulz is determined to prove that there are second acts in political lives. 

George Eaton is political editor of the New Statesman.

This article first appeared in the 24 February 2017 issue of the New Statesman, The world after Brexit