PMQs sketch: Grilled Miliband followed sautéed Clegg

The PM could not believe how he has gone from zero to hero without any planning.

Unemployment in the UK fell by one this morning when the Deputy Prime Minister came out of hiding and returned to his main job of being the present most people don't want for Christmas.

That is not to say he was not welcomed at the final Prime Ministers Questions of the year, since MPs on all sides of the house were more than happy to snack on him before heading off for more fulsome seasonal fare.

Indeed the volume of the welcome following his decision to go on the run just 48 hours ago might have been pleasing had he not noticed the increased sound was coming from the knives being sharpened all around him.

So it was unsurprising that as he finally took his traditional place next to the Prime Minister he kept looking nervously about him. But he need not have worried because sautéed Clegg had been taken off the menu to be replaced by grilled Miliband.

It had not meant to be this way following Dave's Churchillian gesture last Friday to everyone without a UK passport. Even on Monday, with Nick Clegg cowering under his desk, Ed M and his advisors thought they were heading into the Christmas recess with the Coalition in disarray and its leadership daggers drawn over Europe.

But what they had not counted on was the pulling power of power itself, and that insults could fly and feet could be stamped but not stamped out of office.

What they also had not counted on was the public's support for Dave's two fingers to everything foreign. As PMQs began it was clear that Tory MPs were pleased enough to eat themselves never mind Nick Clegg and they were more than happy to add Ed M to the menu.

The Prime Minister ,who cannot believe how he has gone from zero to hero without any planning ,was equally at home in a place where so often he has had to resort to decibels rather than debate to get him through the half hour. Indeed so confident was he that his minder Chancellor George took time out to move down the Government front bench for a bit of pre-Christmas gossip with Cabinet colleagues.

With the worst unemployment figures for 17 years the Labour leader was on relatively safe ground as he reminded the PM that his Christmas message a year ago had been about jobs ."What went wrong? "he said.

In PMQs past Dave's collar would already been tightening around his neck producing those wonderful autumnal hues so associated with an out-of-depth Prime Minister.

But there was none of that today as he turned to his now adoring back benchers and announced he would not take any lectures from Labour.

And then Ed turned to Europe. On the surface the clash between Lib-Dems and Tories in the Coalition over Europe would appear to be rich pickings for Labour. But this assumes that Labour has a position on Europe that is both agreed and popular and neither of these are true. Indeed the whole sub-text of today's PMQs could be found in two opinion polls published this morning which were carried out AFTER Cameron wielded his veto.

Both polls put the Tories two points ahead of Labour for the first time since December 2010 and show majority support for the PM over Europe. Even though they were never raised the existence of these extra elephants were enough to un-nerve Ed and give Dave a rare win. As Labour slumped and Lib-Dems slumped further the PM looked as if he would lick himself if he could. There is a real poll going on today in the Feltham and Heston constituency just west of London where Labour is defending a 4000 majority from the general election.

Nineteen months into this parliament with record unemployment, the worst economic crisis for 80 years and at loggerheads with Europe, Dave should be up to his throat in it leaving Ed with the rewards.

Watch this space.

Peter McHugh is the former Director of Programmes at GMTV and Chief Executive Officer of Quiddity Productions.

Peter McHugh is the former Director of Programmes at GMTV and Chief Executive Officer of Quiddity Productions

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Taxation without benefits: how our tax system increases inequality

We often hear the progressive income tax used as a proxy for all tax when it actually accounts for just over a quarter of the tax take.

Tax may not be the burning issue on everyone’s minds over the next month, but the Panama Papers leak has proven that the thorny issues of who pays what, and what level of tax is fair, are ones that are never too far away from the public consciousness.

One of the most important annual publications on tax is the Office for National Statistics’ Effects of Taxes and Benefits on Household Income. Published today, it shows, among other things, the proportion of income paid in tax by people at different points on the income spectrum. This may sound like the natural domain of the data nerd, but it actually tells us some rather interesting facts about our system of taxes and benefits.

First, the good news. Our much maligned welfare system is in fact a beacon of progressiveness, drastically reducing the level of income inequality we see in this country. In fact, overall, taxes and benefits are quite substantially redistributive. Without them, the income of the richest 20 per cent of households would be 14 times higher than the poorest 20 per cent. With them, that gap falls to only four times.

The benefit system as a whole decreases the Gini coefficient, the most frequently used measure of inequality, by 14 percentage points. For anyone who sees taxes and benefits as a key component in reducing economic inequality, or boosting the incomes of the poorest, or, frankly, tackling social injustice, this is rather welcome news.

But now for the bad news.

While our welfare system is undoubtedly progressive, the same cannot be said of our tax system when looked at in isolation. The poorest face a disproportionately heavy tax burden compared to the richest, paying 47 per cent of their income in tax, compared to just 34 per cent for the richest. Last year (2013/14) this difference was 45 per cent – 35 per cent, and the year before (2012/13) the gap was 43 per cent – 35 per cent. So while the proportion of income paid in tax has fallen slightly for the richest, it has increased for the poorest.

While some taxes like income tax are substantially progressive, those such as VAT and Council Tax are not. Even after adjusting for rebates and Council Tax Benefit, the poorest 10 per cent pay 7.1 per cent of their income in council tax while the richest 10 per cent pay only 1.5 per cent.

Should this matter, if our system of benefits continues to narrow the gap between rich and poor? Well, yes, not least because that system is under severe pressure from further cuts. But there are other good reasons to focus on the tax system in isolation from the benefit system.

Polling by Ipsos MORI has shown that the public believes that the tax system by itself reduces inequality, and it is often spoken of by politicians as if that is the case. We often hear the progressive income tax used as a proxy for all tax, for example, when it actually accounts for just over a quarter of the tax take.

Understanding why the tax system does not by itself reduce inequality is therefore important for both thinking about how tax revenues could be better raised, and for understanding the importance of the benefit system in narrowing the gap between the richest and the poorest.

John Hood is Acting Director of the Equality Trust