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.

Photo: Getty
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PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

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