"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.

Picture: ANDRÉ CARRILHO
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Leader: Boris Johnson, a liar and a charlatan

The Foreign Secretary demeans a great office of state with his carelessness and posturing. 

Boris Johnson is a liar, a charlatan and a narcissist. In 1988, when he was a reporter at the Times, he fabricated a quotation from his godfather, an eminent historian, which duly appeared in a news story on the front page. He was sacked. (We might pause here to acknowledge the advantage to a young journalist of having a godfather whose opinions were deemed worthy of appearing in a national newspaper.) Three decades later, his character has not improved.

On 17 September, Mr Johnson wrote a lengthy, hyperbolic article for the Daily Telegraph laying out his “vision” for Brexit – in terms calculated to provoke and undermine the Prime Minister (who was scheduled to give a speech on Brexit in Florence, Italy, as we went to press). Extracts of his “article”, which reads more like a speech, appeared while a terror suspect was on the loose and the country’s threat level was at “critical”, leading the Scottish Conservative leader, Ruth Davidson, to remark: “On the day of a terror attack where Britons were maimed, just hours after the threat level is raised, our only thoughts should be on service.”

Three other facets of this story are noteworthy. First, the article was published alongside other pieces echoing and praising its conclusions, indicating that the Telegraph is now operating as a subsidiary of the Johnson for PM campaign. Second, Theresa May did not respond by immediately sacking her disloyal Foreign Secretary – a measure of how much the botched election campaign has weakened her authority. Finally, it is remarkable that Mr Johnson’s article repeated the most egregious – and most effective – lie of the EU referendum campaign. “Once we have settled our accounts, we will take back control of roughly £350m per week,” the Foreign Secretary claimed. “It would be a fine thing, as many of us have pointed out, if a lot of that money went on the NHS.”

This was the promise of Brexit laid out by the official Vote Leave team: we send £350m to Brussels, and after leaving the EU, that money can be spent on public services. Yet the £350m figure includes the rebate secured by Margaret Thatcher – so just under a third of the sum never leaves the country. Also, any plausible deal will involve paying significant amounts to the EU budget in return for continued participation in science and security agreements. To continue to invoke this figure is shameless. That is not a partisan sentiment: the head of the UK Statistics Authority, Sir David Norgrove, denounced Mr Johnson’s “clear misuse of official statistics”.

In the days that followed, the chief strategist of Vote Leave, Dominic Cummings – who, as Simon Heffer writes in this week's New Statesman, is widely suspected of involvement in Mr Johnson’s article – added his voice. Brexit was a “shambles” so far, he claimed, because of the ineptitude of the civil service and the government’s decision to invoke Article 50 before outlining its own detailed demands.

There is a fine Yiddish word to describe this – chutzpah. Mr Johnson, like all the other senior members of Vote Leave in parliament, voted to trigger Article 50 in March. If he and his allies had concerns about this process, the time to speak up was then.

It has been clear for some time that Mr Johnson has no ideological attachment to Brexit. (During the referendum campaign, he wrote articles arguing both the Leave and Remain case, before deciding which one to publish – in the Telegraph, naturally.) However, every day brings fresh evidence that he and his allies are not interested in the tough, detailed negotiations required for such an epic undertaking. They will brush aside any concerns about our readiness for such a huge challenge by insisting that Brexit would be a success if only they were in charge of it.

This is unlikely. Constant reports emerge of how lightly Mr Johnson treats his current role. At a summit aiming to tackle the grotesque humanitarian crisis in Yemen, he is said to have astounded diplomats by joking: “With friends like these, who needs Yemenis?” The Foreign Secretary demeans a great office of state with his carelessness and posturing. By extension, he demeans our politics. 

This article first appeared in the 21 September 2017 issue of the New Statesman, The revenge of the left