"Brown's mistake" has already been reversed

The personal allowance has grown to undo any losses the abolition of the 10p rate inflicted.

Ed Miliband has committed to introducing a mansion tax, and using the money to fund a re-introduction of the 10p tax band, saying:

We would tax houses worth over £2 million. And we would use the money to cut taxes for working people. We would put right a mistake made by Gordon Brown and the last Labour government. We would use the money raised by a mansion tax to reintroduce a lower 10 pence starting rate of tax, with the size of the band depending on the amount raised. This would benefit 25 million basic rate taxpayers.

The original 10 pence tax band was applied on incomes between £0 and £2,230, once the personal allowance was taken into account. Its abolition was used to fund the reduction in the basic rate of tax from 22p to 20p. But while Miliband says he will "put right [the] mistake made by Gordon Brown", he's not going to be reversing the basic rate cut. Instead, the money will come from the mansion tax.

But the Social Market Foundation's Ian Mulheirn points out that that mansion tax is not expected to raise anywhere near as much as two per cent on the basic rate of tax would. He tells me that their expectation for a mansion tax on houses over £2m is in the low billions — probably around £2bn or £3bn.

But every billion pounds raised would only pay for a 10p tax band of between two and three hundred pounds, he says:

We've got about 30 million income taxpayers in the UK, once you take the personal allowance into account. Assuming that they all would benefit by the full amount, then if you've got £1bn to play with, you could have a tax band of about £330.

A tax band of £330 would return £33 to each taxpayer. If the mansion tax raises the high end of estimates, then the band could be around £1000, returning £100 to each taxpayer. That's not to be sniffed at, but it's less than half of the size of the abolished band. It's not putting right Brown's mistake, but it ameliorates it slightly.

But actually, Brown's mistake has already been largely put right.

In 2007, the last year of the 10p tax rate, the personal allowance stood at £5,035. With the 10p band on top, basic rate tax started at £7,265. Uprated for inflation, that will be worth slightly under £9000 in the tax year starting in 2013.

In that same year, the personal allowance will stand at £9,440. Someone who would in 2007 have been paying only the 10p tax rate is today paying no tax at all. Miliband's actions, if introduced in 2015, will likely introduce a reduced tax rate for people earning between £10,000 and £11,000 to complement a zero tax rate for people earning less than that. That's likely a good thing; but it's a new thing, not a reversal of Brown's actions. They have already been undone.

Of course, if you have to delve into uprating tax bands by inflation to prove a point, it's not going to fly very well in political debates. That's why, as George writes, politically, the move is a masterstroke.

Brown walks through Rugby. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Justin Tallis/Getty Images
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If Jeremy Corbyn does win, the Greens should shut up shop

If self-described socialists continue to organise outside of the Labour party, they risk depriving the left's main outlet of both talent and voters, warns Michael Chessum.

It could all be rash complacency, but for much of left thoughts have already begun to focus on the reality of a Corbyn-led Labour Party. In the Labour left, the air is swirling with new projects – to back Corbyn up as leader, to organise the membership against parts of the PLP if necessary, to bring Labour into social movements and social movements into Labour. But outside Labour, too, the wider left is waking up to discover the entirely different reality that could be posed by a sharp left turn in leadership. In the Green Party, and especially among those on the left of the party, there is increasing pressure to find a formal working arrangement with Corbyn’s Labour, much of which is reflected in Caroline Lucas’s open letter in the Independent last week. An electoral pact is, apparently, already on the table.

Lucas’s call for an electoral pact is a pretty honest gesture, and will not be entirely uncontroversial in her own party; it is certainly worth much more than, as some more cynical onlookers in Labour have put it, “please don’t run against me in Brighton Pavillion”. It could also be significant in terms of electoral arithmetic: after boundary changes, and in any tight election, Labour will need the 3.8 per cent of the vote that the Greens got at the last election.  But while Lucas and other leftwingers in the Green Party are at least acknowledging the issue, there is a danger that they will avoid a more fundamental question: if Corbyn wins, does it really make sense for self-described socialists in the Green Party to continue a separate existence outside of Labour at all?

Corbyn represents the undeniable arrival of a wider political trend. Across Europe, democratic socialism is undergoing a split: yesterday’s “realists”, who argue for an accommodation with neo-liberal economics and the austerity politics that follows it like clockwork, are on one side; on the other is an assortment of socialists and social democrats who argue for something else. Mass anti-austerity politics has not been a one-party affair in the UK: it was built from the ground up by students, workers and community campaigns; it was road-tested in Scotland; and it has been formulated into policy from a variety of angles, as well as by the Corbyn campaign itself. But now, in the face of the realities presented by five more years in opposition, the vital political expression of the anti-austerity movement seems to have come to fruition in the Labour Party.

This fact will leave one of the largest sections of the organised left – the Green left – disorientated and unsure of what to do. Some socialists and leftwingers in the Green Party are there on the basis of a genuine conviction that the green movement, rather than the labour movement, is their political home. But for the vast bulk of those drawn to the Green left – many of them freshly recruited from recent social movements, others exiles from Labour under Blair – the purpose of the Green left is premised largely on the idea that a credible party-political alternative was needed, and that an anti-austerity surge would be impossible inside the Labour Party. This premise is now ebbing away.

The race is now on for the true believers to convince their periphery of the virtues of remaining in the Green Party after Corbyn wins. Many may yet be convinced, and the Labour left should not be complacent about recruiting a sudden tide of departing Greens.  But for those who joined because they wanted to intervene into mainstream politics from the left, there should be no doubt as to where the big fights will now happen, and where those committed to having them should go.

The incorporation of elements of the radical left’s core constituency into the Greens was always a peculiarity of recent British history. Had it become a sustainable arrangement and grown into a faint British Syriza, it would have made the Green Party of England and Wales unique in Europe, where ecologist and green parties usually sit distinctly and uneasily next to their far-left counterparts.

Much of the uneasiness that characterises the relationship between green parties and radical left groupings in other countries is about ideas, but much of it is also about tribalism – the simple fact that they have separate organisations which need to be different, and which breed differences in approach as often as they reflect them. If either the Green left or the Labour left are not careful, this tribalism will replicate itself, weakening everyone and dividing the left for no particularly coherent political reason.

That is why it is so significant that figures as senior as Caroline Lucas are already making overtures to Corbyn’s Labour. However, there is a danger that behind the positive gestures lie a serious of less friendly assumptions: that any electoral pact is temporary, is designed to build and promote the existence of the two separate parties, and would end upon the introduction of a proportional voting system – a move which, although positive in itself, would further entrench the fault lines between the Green and Labour lefts.

There are numerous ways that this could be overcome which would avoid the Greens simply dissolving themselves or quietly surrendering their politics. If it carried majority support in the party, the Green Party could reach the same arrangement with Labour that the Co-operative Party has: it would have its own structures, and would run Green-Labour candidates in places where it won the selection inside the local Labour Party. If there is no majority for such an arrangement, socialist Greens who want a higher degree of unity with Labour could form a faction, first within the Greens, and, if they continued to lose the argument, they could break away to form a platform in Labour.

As the seemingly impossible becomes a reality, there will be all kinds of realignments in the political space that the Labour left and Green left both claim to occupy – not to mention a potential split on Labour’s right wing. The best hope for a healthy realignment of the British left lies in an honest exchange of ideas; a newly democratised and pluralistic Labour Party which embraces – rather than excludes – political energy formerly to its left; and a willingness on the part of external political forces to orientate themselves towards Labour as the political expression of a mass movement. Those forces should involve the left wing of the Green Party.