Labour steps up its 50p tax attack with new "Tory Millionaire's Day" campaign

Ahead of the abolition of the 50p tax rate on 6 April, Labour looks again to paint the Tories as the party of the rich.

When I recently interviewed Conservative MP Robert Halfon, who first called for the reintroduction of the 10p tax rate, he lamented how Labour's "brilliant" campaign against the abolition of the 50p rate had defined the Tories as "a party only interested in cutting taxes for millionaires". More than any other single measure, the move retoxified the Conservative brand and confirmed the Tories' status as "the party of rich". Every time that David Cameron defends an unpopular tax rise or spending cut, Ed Miliband is able to remind voters that he has simultaneously chosen to reduce taxes by an average of £107,500 for 8,000 income-millionaires.  

With just over a month to go until the tax cut is introduced on 6 April, Labour is stepping up its campaign against the measure. The party has today launched a new ad featuring Cameron writing a cheque for £100,000 to "a millionaire" and a clock counting down to "Tory Millionaire's Day". In response, expect the coalition to point out that the new 45p rate is, as Danny Alexander recently noted, still higher than the 40p rate seen for 155 of the 156 months that Labour was in power. 

Alongside the new campaign, I'm told that Labour, encouraged by how Barack Obama forced Mitt Romney onto the defensive over his tax bill, will continue to challenge the PM to say whether he will benefit from the reduction in the top rate. Private polling by the party has previously shown that 62 per cent of voters, including 46 per cent of Conservative supporters, believe he should "come clean and tell people honestly whether he is personally benefiting". 

Unlike George Osborne, who said last year that he would not gain from the move, Cameron has so far refused to say whether he will. When challenged on this subject by Stephen Pound MP at PMQs earlier this month, the PM replied evasively that he would "pay his taxes". Under ever-greater pressure from Labour, the Tories will need to decide whether this strategy is sustainable.

Labour's new advert reminds voters that those earning a million pounds a year will gain more than £100,000 from the cut in the top rate of tax.

George Eaton is political editor of the New Statesman.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.