The right warms to property taxes

Tory MPs and others on the right are beginning to recognise the case for greater taxation of propert

I recently noted that Tim Montgomerie, the influential editor of ConservativeHome, had declared his support for greater taxation of property (including a version of Vince Cable's "mansion tax"), a cause the New Statesman has long championed. Since then, others on the right have joined him. In a piece on ConservativeHome today, Tory MP Mark Reckless, rightly noting that we tax property less than almost anywhere else in the world, calls for a range of new property taxes to replace the 50p rate. He calls for the coalition to ensure the rich pay stamp duty (many avoid it by putting properties into shell companies), to levy capital gains tax on non-UK residents and to introduce a mansion tax, although with the threshold set at £5m rather than £1m or £2m. In return, he says, the coalition should reduce the 50p rate to 45p and the 40p rate to 38p.

Elsewhere, the Spectator's James Forsyth writes about the growth of the "undeserving rich", those who have acquired huge wealth through illegitimate means. Forsyth cites the example of bankers and oligarchs but, to my mind, this category should also encompass those who have benefited immensely, through little effort of their own, from the dramatic rise in house prices over the last decade. As NS editor Jason Cowley argued in a October 2010 cover story ("The coming battle over land and property"), there is a strong meritocratic argument for heavier taxation of unearned wealth (inheritance, property and land) and lighter taxation of earned income. Property taxes are also harder to avoid than those on income (you can't move a mansion to Geneva) and reduce the distorting effect that property speculation has on the economy. For the psephologically minded, it's worth noting that high-end property taxes are popular. Last week's Sunday Times/YouGov poll found that 63 per cent of the public (including 56 per cent of Tories) support a mansion tax, with just 27 per cent opposed (38 per cent of Tories).

Yet most on the right remain instinctively hostile to Vince Cable's call for greater taxation of land and property. They should realise that they are missing a trick. In an age of austerity, the Tories cannot afford to be seen as the party of the wealthy. Replacing the 50p rate with a range of new property taxes would change the terms of debate and send Labour back to the drawing board (the 50p rate may not raise as much revenue as Ed Miliband and Ed Balls hope). Simply abolishing the top rate is neither morally, nor politically, nor fiscally credible. The right should not miss an opportunity to demonstrate that it can think imaginatively about wealth, property and opportunity.

George Eaton is political editor of the New Statesman.

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It's time for Jeremy Corbyn's supporters to take on the unions

The union support for expanding Heathrow reflects a certain conservatism. 

The government’s announcement that it will go ahead with a third runway at Heathrow seems to have unlocked an array of demons. It has also created some unlikely alliances. Zac Goldsmith, the pro-Brexit mayoral candidate whose campaign was widely condemned as racist, is seeking to re-invent himself as an environmental champion, campaigning alongside fellow Heathrow MP John McDonnell. And the Richmond byelection which he is triggering could yet become a test case for Labour’s progressive alliance enthusiasts.

But perhaps the most significant position is that of the major unions. To the shock of many less seasoned activists on the left, Unite, the largest trade union in the UK and a consistent supporter of Corbyn’s leadership, has loudly called on the government to “be bold and build” the new runway, even now urging it to accelerate the process. Far from being a revelation, Unite’s position on Heathrow is longstanding – and it points to the lasting power and influence of an establishment trade unionism.

In August, the TUC co-ordinated a joint statement from five unions, urging the government to go ahead with the third runway. Like the rest of the unions’ lobbying efforts, it was coordinated with other pro-expansion stakeholders like the CBI, and it could just as easily have been authored by the business lobby. Heathrow expansion will, it says, “deliver at least £147bn to UK GDP and 70,000 new jobs”. “Trade unions and their members”, said Frances O’Grady, “stand ready to work to help the government successfully deliver this next major national infrastructure project”.

The logic that drives unions to support projects like Heathrow expansion – and which drives the GMB union to support fracking and Trident renewal – is grounded in a model of trade unionism which focuses not on transforming the workplace, but on the narrowly-defined interests of workers – job creation, economic growth and a larger share of the pie. It views the trade union movement not as merely antagonistic to employers, but as a responsible lobbying partner for business and industry, and as a means of mediating workers’ demands in a way that is steady and acceptable to the state and the economic system. This model, and the politics that accompanied it, is why, historically, trade unions were a conservative influence on Labour’s internal politics.

Nothing could be more at odds with the political, environmental and economic realities of the 21st century. It is not in the interests of workers or ordinary people to live on a planet which is slowly becoming uninhabitable. To avoid catastrophic global warming, we need to leave the vast majority of fossil fuels in the ground – that probably means shrinking the aviation industry, not expanding Heathrow’s passenger capacity by 70 per cent. All of this is implicitly recognised by Jeremy Corbyn’s environmental and industrial strategy, which aims to create a million new jobs and build a million new homes while switching to renewables and democratising the energy industry.

The gap between Corbyn’s policies and the policies of many major trade unions tells us something deeper about the challenges facing the left. If Corbynism is an unfinished revolution in the Labour Party machine, it is one which has barely started in the wider labour movement.

The gradual leftward shift in many unions’ political allegiances has broadened the alliance around Corbyn and given him strength in numbers and resources, but it is often as much about internal union politics as it is a deep conviction for what Corbyn represents. Unison general secretary Dave Prentis did back Corbyn’s re-election following a ballot of members, but is hardly a left-winger, and the union’s votes on Labour’s NEC are not safely aligned to the left.

The political radicalisation of the unions has been matched, if anything, by a decline in coordinated industrial action. The national strategy that fuelled the anti-austerity movement in 2011 and 2012 is only a memory. The democratic and organising culture in many unions, too, remains bureaucratic and opaque. Trade unions have played a key role in Corbyn’s coalition, but without a significant shift in their internal culture and a shift away from their role as respectable partners of industry, they could easily scupper the project as well. 

The expansion of Heathrow airport is a step backwards for the future of the planet and the interests of ordinary people – and yet, if it happens at all, it will have been made possible by the concerted efforts of key trade unions. This is not an aberration but a reminder that, despite their rhetorical flourishes in support of Corbyn, Britain’s trade unions are also in need of change. Any project that aims to transform the Labour party and wider society must also aim to transform the whole of the labour movement – from the shop floor to the corridors of power.