Miliband's 10p tax pledge is a political masterstroke

The Labour leader has distanced himself from one of Gordon Brown's biggest mistakes, demonstrated his commitment to redistribution and left the coalition playing catch-up.

It looks like Ed Miliband has been reading the New Statesman. Last week's NS leader urged the Labour leader to call for the return of the 10p tax rate (as demanded by Conservative MP Robert Halfon) and in his speech on the economy, Miliband has done just that. 

Having borrowed one smart idea from a Tory, Miliband has borrowed another from a Lib Dem (Vince Cable). The return of the 10p rate will be funded by the introduction of a "mansion tax" on houses worth more than £2m. 

The numbers will need to be scrutinised but the politics are perfect. The pledge distances Miliband from one of Gordon Brown's greatest mistakes, demonstrates his commitment to redistribution and splits the coalition. The Tories want a 10p tax rate but oppose a mansion tax; the Lib Dems want a mansion tax but oppose a 10p rate (preferring an even higher personal allowance of £12,500). 

Here's the key section from the speech: 

A One Nation Labour budget next month would lay the foundations for a recovery made by the many, not just a few at the top.

Let me tell you about one crucial choice we would make, which is different from this government.

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.

Moving Labour on from the past and putting Labour where it should always have been, on the side of working people.

The question now is how George Osborne will respond when he delivers the Budget on 20 March. David Cameron hinted at PMQs yesterday that the Chancellor would announce the return of the 10p tax rate but having ruled out the introduction of a mansion tax, he'll need to find another means of funding it. The Lib Dems, meanwhile, are sceptical of the measure, arguing that a income tax threshold will do more to benefit the poorest.

As Lib Dem minister David Laws argued yesterday: "It's [raising the personal allowance] much simpler than having a 10p rate. It’s far more attractive to say to people on low incomes you won't pay any income tax until you earn a sensible amount of money. We’re even talking about raising it further in the next Parliament so people on minimum wage don’t pay any tax at all."

But whatever deal the coalition hammers out, Miliband's political masterstroke means Osborne now has no choice but to play a "trump card" at the Budget. 

Labour leader Ed Miliband pledged to reintroduce the 10p tax rate abolished by Gordon Brown in his speech on the economy in Bedford. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Felipe Araujo
Show Hide image

Hull revisited: What happens when a Brexit stronghold becomes City of Culture?

We report from Hull, to find out if you can replace the kind of nostalgia that led to a Leave vote with cultural investment.

At 75 metres long, the offshore wind turbine blade erected across Queen Victoria Square, in the heart of Hull, is a sculpture intended to mark a new chapter in the city’s history. For the next 12 months, Hull, a city of more than a quarter of a million people in the northeast of England, will be the UK’s City of Culture.

The 28-tonne blade hails from the local Siemens plant. The German technology company employs around 1,000 people in the area, making it Hull’s biggest single employer.

Seen up close in this context – laid dormant in the middle of a town square instead of spinning up in the air generating energy – the structure is meant to remind passersby of a giant sea creature. It is also, I’m told, an allusion to Hull’s rich maritime history.


All photos: Felipe Araujo

Nostalgia is a big thing in this part of the country. At one point, Hull was the UK’s third largest port but technology and privatisation drastically changed that. The battle over cod fishing with Iceland in the waters of the North Sea 40 years ago has also dealt a major blow to a region with a long and proud trawling tradition.

People here still talk about a bygone era when the fishing industry provided jobs for everyone and there was enough money to go around.

Fast forward to 2017, and the country’s new capital of culture is the same city that voted 67 per cent in favour of leaving the EU last June. Its new-found prestige, it seems, is not enough to erase years of neglect by a political class “too busy for commoners like us”, as one resident puts it.

“More than a message to Brussels, it [the Brexit vote] was a message to Westminster,” Paul Leeson-Taylor, a filmmaker born and bred in Hull, tells me. “For the first time in a long time people in Hull felt like they had the chance to change something, and they took it.”

But while speaking to people on the high street and hanging out with locals at the Community Boxing Club in Orchard Park, one of the city’s most deprived areas, there is one word that consistently popped up in conversation – more than any specific policy from Westminster or the much-hated rules “dictated” by Brussels. Foreigners.

According to official figures, Hull’s population is 89.1 per cent white British. Still, immigration is big on people’s minds here.

During my two-day stay in the city, I find myself being the only black person in most places I visit – I’m certainly the only black guy at the boxing club. So when someone begins a sentence with “I’m not racist but…”, I know a tirade on immigrants is about to ensue.

“There are just too many of them,” Nick Beach, an estate agent whose Polish clientele is a big part of his business, tells me as he is about to teach a boxing class to local children. Beach was born in Shepherd’s Bush, in West London, but has been living in Hull for the last 20 years.

“When I go down there these days and go into Westfield shopping centre, it is very rare you get an English person serving you now,” he says. “I just find it disappointing that you go into your capital city and you are a minority there.”

These are the much-discussed “left behind”, a white working-class community that has gained particular prominence in a time of Brexit and Donald Trump. Under economic pressure and facing social change, they want to have their say in running a country they claim to no longer recognise.

For Professor Simon Lee, a senior politics lecturer at the University of Hull, immigration is only a superficial layer when it comes to explaining the resentment I witness here. For him, the loss of the empire 70 years ago is still something that as a country Britain hasn’t come to terms with.

“The reason for us to be together as a United Kingdom has gone, so what is the project?”

As destiny would have it, a foreign company will now play a major role on Hull’s economic future, at least in the short term. In the wake of the Brexit vote, there were widespread fears Siemens would pull out of the region and take its factory elsewhere. With the massive blade looming large in the background, Jason Speedy, director of the blade factory in Hull, assures me that isn’t the case.

“The Brexit decision has made no difference. We have made our investment decision, so Siemens, together with the Association of British Ports, has put in £310m. It’s all full steam ahead.”

As Hull becomes the country’s cultural hub for the next few months, the hope is that its residents stop looking back and start looking forward.

For Professor Lee, though, until there is a complete change in the power structures that run the country, the north-south divide will remain – with or without the EU. “The way you kill nostalgia is to have something new,” he said. “The reason why people here are nostalgic is because there is nothing to replace it with.”

Felipe Araujo is a freelance journalist based in London. He writes about race, culture and sports. He covered the Rio Olympics and Paralympics on the ground for the New Statesman. He tweets @felipethejourno.