Will Balls be forced to use the 50p tax to protect benefits?

Pegging the welfare uprating to the 50p tax rate would be an expensive decision in terms of future policy development.

Ed Balls yesterday gave the clearest indication yet of how Labour intends to handle coalition plans to raise benefits by less than the rate of inflation over the next three years.

George Osborne’s aim to put a Welfare Uprating Bill before parliament next year is plainly meant as a political trap for Labour – forcing them, or so the Chancellor sees it, into unpopular defence of wasteful spending on benefit-dependent layabouts. (The nuances of Osborne’s calculation and the dilemmas it poses for Labour are examined in more detail here, here and here.)

Balls was challenged in parliament to say whether he would support the measure. The nub of his reply was to suggest that Labour would only back the real terms cut to welfare provision on the condition that the top 50p rate of income tax is restored. Specifically he said:

“On the question he asked, we will look at the legislation. But if he intends to go ahead with such an unfair hit on mid- and lower-income working families, while he’s giving a £3 billion top rate tax cut, we will oppose it.”

There is no chance of the 50p tax rate coming back, so in effect Labour is committed to voting against the Welfare Uprating Bill and hoping to reframe the argument around fair contributions from the top of society when those at the bottom – specifically those in work and struggling to get by – are hit hardest.

Much commentary on Labour’s position has focused on the difficulties the party will face winning over voters who are hostile to the idea of benefit “scroungers”.  Balls’s solution indicates that he has his eye on a different dimension to the problem, which is that by opposing Osborne’s move he implicitly makes a spending commitment – and the shadow chancellor is deeply averse to making any of those before he has to.

Balls will be alert to the accusation coming down the line that, whatever Labour says it plans to do about the deficit after 2015, it has already implicitly offered to raise spending on benefits. This can easily be fashioned into an attack along the lines summarised by one shadow cabinet minister as “the £10bn benefits black hole in Labour’s plans”. Not surprisingly, that is a charge Balls is determined to avoid.

Pegging the welfare uprating to the 50p tax rate at least provides some fiscal cover to the Labour position – but it would be an expensive decision in terms of future policy development. It implies a Labour pledge to restore the top rate as soon as the party gets into power and then pre-emptively spends the proceeds, which means the cash isn’t available for anything else. There aren’t that many obvious revenue-raising measures going spare. Balls will not be happy if Osborne forces him to deploy one of them upfront and on benefit spending, more than two years before an election.

Ed Balls said Labour would oppose "an unfair hit on mid and lower income working families". Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Photo: Martin Whitfield
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Labour MP for East Lothian Martin Whitfield: "I started an argument and ended up winning an election"

The former primary school teacher still misses home. 

Two months ago, Martin Whitfield was a primary school teacher in Prestonpans, a small town along the coast from Edinburgh. Then he got into an argument. It was a Saturday morning shortly after the snap election had been called, and he and other members of the local Labour party began discussing a rumour that the candidate would be an outsider.

“I started an argument that this was ridiculous, we couldn’t have a candidate helicoptered in,” he recalls. He pointed out that one of the main issues with the Scottish National Party incumbent, the economist and journalist George Kerevan, was that he was seen as an outsider.

“I kept arguing for an hour and a half and people started gently moving away,” he jokes. “About two days later I was still going on, and I thought enough’s enough.” 

He called Iain Gray, the Scottish Labour veteran, who interrupted him. “He said, 'Right Martin, are you going to put up or shut up?’ So I filled in the forms.

"Then I had to have a very interesting conversation with my wife.”

One successful election campaign later, he is sitting in the airy, glass-roofed atrium of Westminster’s Portcullis House. Whitfield has silver hair, glasses, and wears a Labour-red tie with his shirt. He looks every bit the approachable primary school teacher, and sometimes he forgets he isn’t anymore. 

I ask how the school reacted to his election bid, and he begins “I have”, and then corrects himself: “There is a primary four class I had the pleasure to teach.” The children wanted to know everything from where parliament was, to his views on education and independence. He took unpaid leave to campaign. 

“Actually not teaching the children was the hardest thing,” he recalls. “During the campaign I kept bumping into them when I was door-knocking.”

Whitfield was born in Newcastle, in 1965, to Labour-supporting parents. “My entire youth was spent with people who were socialists.”

His father was involved in the Theatre Workshop, founded by the left-wing director Joan Littlewood. “We were part of a community which supported each other and found value in that support in art and in theatre,” he says. “That is hugely important to me.” 

He trained as a lawyer, but grew disillusioned with the profession and retrained as a teacher instead. He and his wife eventually settled in Prestonpans, where they started a family and he “fought like mad” to work at the local school. She works as the marketing manager for the local theatre.

He believes he won his seat – one of the first to be touted as a possible Labour win – thanks to a combination of his local profile, the party’s position on independence and its manifesto, which “played brilliantly everywhere we discussed it”. 

It offered hope, he says: “As far as my doorstep discussion in East Lothian went, some people were for and against Jeremy Corbyn, some people were for and against Kezia Dugdale, but I didn’t find anyone who was against the manifesto.”

Whitfield’s new job will mean long commutes on the East Coast line, but he considers representing the constituency a “massive, massive honour”. When I ask him about East Lothian, he can’t stop talking.

“MPs do tend to say ‘my constituency’s a microcosm’, but it really is Scotland in miniature. We have a fishing industry, crabs and lobsters, the agricultural areas – the agricultural soil is second to none.” The area was also historically home to heavy industry. 

After his first week in Westminster, Whitfield caught the train back to Scotland. “That bit when I got back into East Lothian was lovely moment,” he says. “I was home.”

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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