PMQs review: Cameron's 50p tax problem hasn't gone away

The PM's decision to cut taxes for the highest earners left him vulnerable to Miliband's Reagan-style attack over living standards.

It was Ronald Reagan who Ed Miliband channelled at today's PMQs as he asked his own version of the US President's famous question to Jimmy Carter in the 1980 presidential debate: "Are you better off now than you were four years ago?" 

After today's Resolution Foundation report on "Squeezed Britain" warned that household incomes will not return to pre-recession levels until 2023, Miliband asked David Cameron: "At the end of the parliament, will living standards be higher or lower than they were at the beginning?" 

Understandably reluctant to reply "no", Cameron pointed to the action the coalition had taken to protect living standards, including the rise in the personal allowance and the council tax freeze. But Miliband swiftly countered that the biggest tax cut of all was for those earning over a million pounds a year, who would see their income tax bill fall by more than £100,000 from this April. What made the PM think that those earning £20,000 a week needed "extra help to keep the wolf from the door", he asked.

It was a reminder of why the decision to scrap the 50p rate tax was so politically disastrous for the Tories; it confirmed their status as the party of the rich and overshadowed the Budget's more popular measures. Cameron may contend that the 50p rate was a revenue loser for the Treasury but to most voters that sounds like an argument for cracking down on avoidance, not for cutting taxes. Later asked by Labour MP Stephen Pound whether he would personally benefit from the move, Cameron replied evasively that he would "pay his taxes". Expect Labour to take every opportunity to ask this question before the start of the new tax year on 6 April. 

But Cameron gained the upper hand when he turned his fire on Miliband. Referencing the "major speech" that the Labour leader will give on the economy tomorrow, he mockingly quoted reports that "it won’t have any new policies in it". Jon Cruddas had said that "simply opposing the cuts without an alternative is no good", the PM went on to note. "That is right, the whole frontbench opposite is no good." 

It was punchy stuff but Cameron's decision to cut the 50p rate, combined with the suspicion that he will benefit from the move, means he remains vulnerable on the subject of living standards. With this in mind, Tory MP Robert Halfon has imaginatively called for the reintroduction of the 10p rate, to prove that his party believes in "tax cuts for the many, not just for the few", while simultaneously reminding voters of a Labour error. 

So it was notable that Cameron remarked towards the end of the session, "we won't forget the abolition of the 10p tax rate". Was this is a hint of action to come in the Budget? Almost certainly not (the fiscally conservative Osborne wouldn't allow it), but it would be exactly the kind of "trump card" that Tory MPs have been urging the Chancellor to play. 

David Cameron waits outside Number 10 Downing Street in London on February 11, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Our union backed Brexit, but that doesn't mean scrapping freedom of movement

We can only improve the lives of our members, like those planning stike action at McDonalds, through solidarity.

The campaign to defend and extend free movement – highlighted by the launch of the Labour Campaign for Free Movement this month – is being seen in some circles as a back door strategy to re-run the EU referendum. If that was truly the case, then I don't think Unions like mine (the BFAWU) would be involved, especially as we campaigned to leave the EU ourselves.

In stark contrast to the rhetoric used by many sections of the Leave campaign, our argument wasn’t driven by fear and paranoia about migrant workers. A good number of the BFAWU’s membership is made up of workers not just from the EU, but from all corners of the world. They make a positive contribution to the industry that we represent. These people make a far larger and important contribution to our society and our communities than the wealthy Brexiteers, who sought to do nothing other than de-humanise them, cheered along by a rabid, right-wing press. 

Those who are calling for end to freedom of movement fail to realise that it’s people, rather than land and borders that makes the world we live in. Division works only in the interest of those that want to hold power, control, influence and wealth. Unfortunately, despite a rich history in terms of where division leads us, a good chunk of the UK population still falls for it. We believe that those who live and work here or in other countries should have their skills recognised and enjoy the same rights as those born in that country, including the democratic right to vote. 

Workers born outside of the UK contribute more than £328 million to the UK economy every day. Our NHS depends on their labour in order to keep it running; the leisure and hospitality industries depend on them in order to function; the food industry (including farming to a degree) is often propped up by their work.

The real architects of our misery and hardship reside in Westminster. It is they who introduced legislation designed to allow bosses to act with impunity and pay poverty wages. The only way we can really improve our lives is not as some would have you believe, by blaming other poor workers from other countries, it is through standing together in solidarity. By organising and combining that we become stronger as our fabulous members are showing through their decision to ballot for strike action in McDonalds.

Our members in McDonalds are both born in the UK and outside the UK, and where the bosses have separated groups of workers by pitting certain nationalities against each other, the workers organised have stood together and fought to win change for all, even organising themed social events to welcome each other in the face of the bosses ‘attempts to create divisions in the workplace.

Our union has held the long term view that we should have a planned economy with an ability to own and control the means of production. Our members saw the EU as a gravy train, working in the interests of wealthy elites and industrial scale tax avoidance. They felt that leaving the EU would give the UK the best opportunity to renationalise our key industries and begin a programme of manufacturing on a scale that would allow us to be self-sufficient and independent while enjoying solid trading relationships with other countries. Obviously, a key component in terms of facilitating this is continued freedom of movement.

Many of our members come from communities that voted to leave the EU. They are a reflection of real life that the movers and shakers in both the Leave and Remain campaigns took for granted. We weren’t surprised by the outcome of the EU referendum; after decades of politicians heaping blame on the EU for everything from the shape of fruit to personal hardship, what else could we possibly expect? However, we cannot allow migrant labour to remain as a political football to give succour to the prejudices of the uninformed. Given the same rights and freedoms as UK citizens, foreign workers have the ability to ensure that the UK actually makes a success of Brexit, one that benefits the many, rather than the few.

Ian Hodon is President of the Bakers and Allied Food Workers Union and founding signatory of the Labour Campaign for Free Movement.