Labour steps up its attack on the 50p tax cut

New figures show that 8,000 millionaires will gain an average of £107,500 from the abolition of the top tax rate.

One of Ed Miliband's favourite lines of attack against the coalition is that the abolition of the 50p tax rate will give a tax cut of at least £40,000 (£42,500, to be precise) to every person earning over a million pounds a year. The Labour leader says "at least" because many of the 8,000 people in question will, of course, receive far more. Today, at a joint Q&A with Ed Balls ahead of George Osborne's Autumn Statement, Miliband will reveal just how much more.

New figures released by Labour show that income millionaires (as opposed to those whose assets are worth at least a million, a distinction Miliband failed to make in his conference speech) will gain an average of £107,500 from the move. Miliband will say:

They don't understand that you build economic success not from wealth trickling down but by rewarding and supporting working people. Earlier this year I highlighted the millionaires’ tax cut. I said David Cameron would be giving a £40,000 tax cut to every person earning over a million pounds a year.

But new figures we are publishing today show it is even more than that. The Government is about to give an average of £107,500 each to 8,000 people earning over a million a year. Not £40,000. But £107,500. To 8,000 millionaires. David Cameron and George Osborne are giving them this money. But it’s coming from you. You are paying the price of their failure and them standing up for the wrong people.

The Labour leader rightly believes that the abolition of the 50p rate remains one of the government's weakest points. Between now and next April, when the tax cut is formally introduced, we can expect him to take every opportunity to remind the public just how much the richest will benefit from the move. Labour also plans to maintain the pressure on David Cameron to say whether he will gain from the abolition of the top rate. A private poll released by the party in October showed that 62 per cent of voters believe Cameron should "come clean and tell people honestly whether he is personally benefitting from this".

Ed Miliband will today give a Q&A with shadow chancellor Ed Balls ahead of George Osborne's Autumn Statement on 5 December. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Sooner or later, a British university is going to go bankrupt

Theresa May's anti-immigration policies will have a big impact - and no-one is talking about it. 

The most effective way to regenerate somewhere? Build a university there. Of all the bits of the public sector, they have the most beneficial local effects – they create, near-instantly, a constellation of jobs, both directly and indirectly.

Don’t forget that the housing crisis in England’s great cities is the jobs crisis everywhere else: universities not only attract students but create graduate employment, both through directly working for the university or servicing its students and staff.

In the United Kingdom, when you look at the renaissance of England’s cities from the 1990s to the present day, universities are often unnoticed and uncelebrated but they are always at the heart of the picture.

And crucial to their funding: the high fees of overseas students. Thanks to the dominance of Oxford and Cambridge in television and film, the wide spread of English around the world, and the soft power of the BBC, particularly the World Service,  an education at a British university is highly prized around of the world. Add to that the fact that higher education is something that Britain does well and the conditions for financially secure development of regional centres of growth and jobs – supposedly the tentpole of Theresa May’s agenda – are all in place.

But at the Home Office, May did more to stop the flow of foreign students into higher education in Britain than any other minister since the Second World War. Under May, that department did its utmost to reduce the number of overseas students, despite opposition both from BIS, then responsible for higher education, and the Treasury, then supremely powerful under the leadership of George Osborne.

That’s the hidden story in today’s Office of National Statistics figures showing a drop in the number of international students. Even small falls in the number of international students has big repercussions for student funding. Take the University of Hull – one in six students are international students. But remove their contribution in fees and the University’s finances would instantly go from surplus into deficit. At Imperial, international students make up a third of the student population – but contribute 56 per cent of student fee income.

Bluntly – if May continues to reduce student numbers, the end result is going to be a university going bust, with massive knock-on effects, not only for research enterprise but for the local economies of the surrounding area.

And that’s the trajectory under David Cameron, when the Home Office’s instincts faced strong countervailing pressure from a powerful Treasury and a department for Business, Innovation and Skills that for most of his premiership hosted a vocal Liberal Democrat who needed to be mollified. There’s every reason to believe that the Cameron-era trajectory will accelerate, rather than decline, now that May is at the Treasury, the new department of Business, Energy and Industrial Strategy doesn’t even have responsibility for higher education anymore. (That’s back at the Department for Education, where the Secretary of State, Justine Greening, is a May loyalist.)

We talk about the pressures in the NHS or in care, and those, too, are warning lights in the British state. But watch out too, for a university that needs to be bailed out before long. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.