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

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Let's seize our chance of a progressive alliance in Richmond - or we'll all be losers

Labour MPs have been brave to talk about standing aside. 

Earlier this week something quite remarkable happened. Three Labour MPs, from across the party’s political spectrum, came together to urge their party to consider not fielding a candidate in the Richmond Park by-election. In the face of a powerful central party machine, it was extremely brave of them to do what was, until very recently, almost unthinkable: suggest that people vote for a party that wasn’t their own.
Just after the piece from Lisa Nandy, Clive Lewis and Jonathan Reynolds was published, I headed down to the Richmond Park constituency to meet local Green members. It felt like a big moment – an opportunity to be part of something truly ground-breaking – and we had a healthy discussion about the options on the table. Rightly, the decision about whether to stand in elections is always down to local parties, and ultimately the sense from the local members present was that it would be difficult  not to field a candidate unless Labour did the same. Sadly, even as we spoke, the Labour party hierarchy was busily pouring cold water on the idea of working together to beat the Conservatives. The old politics dies hard - and it will not die unless and until all parties are prepared to balance local priorities with the bigger picture.
A pact of any kind would not simply be about some parties standing down or aside. It would be about us all, collectively, standing together and stepping forward in a united bid to be better than what is currently on offer. And it would be a chance to show that building trust now, not just banking it for the future, can cement a better deal for local residents. There could be reciprocal commitments for local elections, for example, creating further opportunities for progressive voices to come to the fore.
While we’ve been debating the merits of this progressive pact in public, the Conservatives and Ukip have, quietly, formed an alliance of their own around Zac Goldsmith. In this regressive alliance, the right is rallying around a candidate who voted to pull Britain out of Europe against the wishes of his constituency, a man who shocked many by running a divisive and nasty campaign to be mayor of London. There’s a sad irony in the fact it’s the voices of division that are proving so effective at advancing their shared goals, while proponents of co-operation cannot get off the starting line.
Leadership is as much about listening as anything else. What I heard on Wednesday was a local party that is passionate about talking to people and sharing what the Greens have to offer. They are proud members of our party for a reason – because they know we stand for something unique, and they have high hopes of winning local elections in the area.  No doubt the leaders of the other progressive parties are hearing the same.
Forming a progressive alliance would be the start of something big. At the core of any such agreement must be a commitment to electoral reform - and breaking open politics for good. No longer could parties choose to listen only to a handful of swing voters in key constituencies, to the exclusion of everyone else. Not many people enjoy talking about the voting system – for most, it’s boring – but as people increasingly clamour for more power in their hands, this could really have been a moment to seize.
Time is running out to select a genuine "unity" candidate through an open primary process. I admit that the most likely alternative - uniting behind a Liberal Democrat candidate in Richmond Park - doesn’t sit easily with me, especially after their role in the vindictive Coalition government.  But politics is about making difficult choices at the right moment, and this is one I wanted to actively explore, because the situation we’re in is just so dire. There is a difference between the Conservatives and the Lib Dems. Failing to realise that plays into the hands of Theresa May more than anyone else.
And, to be frank, I'm deeply worried. Just look at one very specific, very local issue and you’ll perhaps understand where I'm coming from. It’s the state of the NHS in Brighton and Hove – it’s a system that’s been so cut up by marketisation and so woefully underfunded that it’s at breaking point. Our hospital is in special measures, six GP surgeries have shut down and private firms have been operating ambulances without a license. Just imagine what that health service will look like in ten years, with a Conservative party still in charge after beating a divided left at another general election.
And then there is Brexit. We’re hurtling down a very dangerous road – which could see us out of the EU, with closed borders and an economy in tatters. It’s my belief that a vote for a non-Brexiteer in Richmond Park would be a hammer blow to Conservatives at a time when they’re trying to remould the country in their own image after a narrow win for the Leave side in the referendum.
The Green party will fight a passionate and organised campaign in Richmond Park – I was blown away by the commitment of members, and I know they’ll be hitting the ground running this weekend. On the ballot on 1 December there will only be one party saying no to new runways, rejecting nuclear weapons and nuclear power and proposing a radical overhaul of our politics and democracy. I’ll go to the constituency to campaign because we are a fundamentally unique party – saying things that others refuse to say – but I won’t pretend that I don’t wish we could have done things differently.

I believe that moments like this don’t come along very often – but they require the will of all parties involved to realise their potential. Ultimately, until other leaders of progressive parties face the electoral facts, we are all losers, no matter who wins in Richmond Park.


Caroline Lucas is the MP for Brighton Pavilion.