Can the right be persuaded to back a "mansion tax"?

ConservativeHome editor Tim Montgomerie says the right should support higher property taxes.

Tim Montgomerie has a typically thoughtful piece in today's Guardian on social justice and the coalition. The ConservativeHome editor points out that the right has accepted significant parts of the Blair-Brown settlement - a ring-fenced NHS (at least in theory), higher international development spending, the minimum wage, a panoply of pensioner benefits - and asks if the left can make similar concessions. He writes: "[C]an the left acknowledge the harm caused by family breakdown? Can Labour politicians get to the point where they agree that single parenthood is sometimes wonderful, often unavoidable but rarely ideal?"

As luck would have it, this week's New Statesman is on that very subject. We asked ten left-wing politicians and thinkers, including Spirit Level authors Kate Pickett and Richard Wilkinson, Marc Stears, Diane Abbott, David Lammy and Melissa Benn, to address the issue of family breakdown and you can read their responses in the new issue (out today in London and in the rest of the country tomorrow).

Blue Labour thinker Marc Stears, for instance, writes:

For far too long, many of us on the British left have spoken to the country like washed-out tutors of Marxist social science. All questions of family breakdown, domestic abuse and personal ethics have been rendered as issues of material distribution. Problems have been presented as the all but inevitable outcomes of inequalities in income, wealth or opportunity and their solutions said to lie almost exclusively with the redistributive power of the state ... The call to re-engage with the family presents the perfect moment for us to put this oversight right.

In his Guardian article, Montgomerie argues that we must rebalance the welfare state in a pro-family direction. As this week's NS leader noted, a remarkable number of the coalition's benefit cuts - from the abolition of baby bonds and the Health in Pregnancy Grant to the three-year freeze in child benefit - hit families hardest. In addition, as I revealed last month, Cameron has broken his promise to protect Sure Start, a lifeline for low income families, and 20 centres have already been closed. By contrast, benefits for the elderly - free TV licences, free bus passes, the winter fuel allowance [WFA] - have been ring-fenced for entirely political reasons (the elderly vote more than any other age group). Montgomerie proposes means-testing the WFA (80 per cent of recipients are not in fuel poverty) and investing savings of £2.2bn in early intervention programmes. It's a stance that Labour's boldest thinkers, most notably James Purnell, will be sympathetic to.

But Montgomerie also wants the right to make some more concessions of its own. He calls for greater taxation of wealth, including high-value properties, and supports a version of Vince Cable's "mansion tax". Britain, he writes, has taxed income too heavily and wealth too lightly.

It's a subject that the New Statesman has devoted considerable attention to over the past year. In a cover story published in October 2010 ("The coming battle over land and property") NS editor Jason Cowley argued for a new model of taxation that shifts the burden of taxation from earned to unearned income; from taxes on income and consumption to those on property, inheritance and land.

In our leaders, we have long argued that there are strong, principled and pragmatic arguments for higher taxes on property. As a recent editorial noted:

These automatically apply to largely untaxed foreign owners, target the source of much unearned wealth and are harder to avoid than taxes on income. In addition, they reduce the distorting effect that property speculation has on the economy.

As the coalition's internal debate on taxation continues (the Lib Dems want the 50p rate to be replaced with a range of new property taxes), it's encouraging to see one of the right's brightest thinkers take up this agenda.

 

Vote for The Staggers as your favourite blog in the Total Politics blog awards.

George Eaton is political editor of the New Statesman.

Getty
Show Hide image

Want to beat child poverty? End the freeze on working-age benefits

Freezing working-age benefits at a time of rising prices is both economically and morally unsound. 

We serve in politics to change lives. Yet for too long, many people and parts of Britain have felt ignored. Our response to Brexit must respond to their concerns and match their aspirations. By doing so, we can unite the country and build a fairer Britain.

Our future success as a country depends on making the most of all our talents. So we should begin with a simple goal – that child poverty must not be a feature of our country’s future.

The Institute for Fiscal Studies projects that relative child poverty will see the biggest increase in a generation in this Parliament. That is why it is so troubling that poverty has almost disappeared from the political agenda under David Cameron, and now Theresa May.

The last Labour Government’s record reminds us what can be achieved. Labour delivered the biggest improvement of any EU nation in lifting one million children out of poverty, transforming so many lives. Child poverty should scar our conscience as much as it does our children’s futures. So we have a duty to this generation to make progress once again.

In my Barnsley constituency, we have led a campaign bringing together Labour party members, community groups, and the local Labour Council to take action. My constituency party recently published its second child poverty report, which included contributions from across our community on addressing this challenge.

Ideas ranged from new requirements on developments for affordable housing, to expanding childcare, and the great example set by retired teachers lending their expertise to tutor local students. When more than 200 children in my constituency fall behind in language skills before they even start school, that local effort must be supported at the national level.

In order to build a consensus around renewed action, I will be introducing a private member’s bill in Parliament. It will set a new child poverty target, with requirements to regularly measure progress and report against the impact of policy choices.

I hope to work on a cross-party basis to share expertise and build pressure for action. In response, I hope that the Government will make this a priority in order to meet the Prime Minister’s commitment to make Britain a country that works for everyone.

The Autumn Statement in two months’ time is an opportunity to signal a new approach. Planned changes to tax and benefits over the next four years will take more than one pound in every ten pounds from the pockets of the poorest families. That is divisive and short-sighted, particularly with prices at the tills expected to rise.

Therefore the Chancellor should make a clear commitment to those who have been left behind by ending the freeze on working-age benefits. That would not only be morally right, but also sound economics.

It is estimated that one pound in every five pounds of public spending is associated with poverty. As well as redirecting public spending, poverty worsens the key economic challenges we face. It lowers productivity and limits spending power, which undermine the strong economy we need for the future.

Yet the human cost of child poverty is the greatest of all. When a Sure Start children’s centre is lost, it closes a door on opportunity. That is penny wise but pound foolish and it must end now.

The smarter approach is to recognise that a child’s earliest years are critical to their future life chances. The weight of expert opinion in favour of early intervention is overwhelming. So that must be our priority, because it is a smart investment for the future and it will change lives today.

This is the cause of our times. To end child poverty so that no-one is locked out of the opportunity for a better future. To stand in the way of a Government that seeks to pass by on the other side. Then to be in position to replace the Tories at the next election.

By doing so, we can answer that demand for change from people across our country. And we can provide security, opportunity, and hope to those who need it most.

That is how we can begin to build a fairer Britain.
 
 

Dan Jarvis is the Labour MP for Barnsley Central and a former Major in the Parachute Regiment.