What Miliband's Sweden trip told us about Labour's tax policy

The Labour leader's commitment to "fairer", rather than "higher" taxes, suggests the party will not seek to significantly increase the overall tax burden.

While David Cameron visited India, Ed Miliband used the recess to make a pilgrimage to social democratic Europe. Accompanied by shadow foreign secretary Douglas Alexander and his chief consigliere Stewart Wood, Miliband held meetings with Denmark's Social Democrat prime minister Helle Thorning-Schmidt (who is married to Neil Kinnock's son, Stephen) and the leaders of Labour's Dutch and Swedish sister parties. 

Having stated that greater income equality should be an "explicit goal" of a Labour government, Miliband believes that the UK has much to learn from Sweden and Denmark, the most equal countries in the developed world. He has expressed particular admiration for Sweden's system of universal childcare, the policy credited with enabling its impressive levels of female employment. More than 80 per cent of Swedish mothers work, compared with just 67 per cent in the UK. In a nod to this achievement, Miliband tweeted during his visit: "Just arriving at Swedish Parliament building, passing two Swedish fathers with pushchairs. Scandinavian scene."

But one thing the Labour leader doesn't think we should import from the Nordic countries are their tax rates. In an interview with Bloomberg (which is worth reading in full), he said: 

There are some lessons you can learn, and some things that are different. They’ve always had a tradition of significantly higher tax and spending, which we don’t have in Britain and aren’t going to have in Britain. We’ve said that we want tax cuts for low and middle income families. That’s a sign of a fairer tax system; it’s not about higher taxes.

Miliband's words suggest that while a Labour government would increase taxes on the wealthy (as well as proposing a mansion tax, the party is considering reintroducing the 50p rate), it would not significantly increase the overall tax burden. Rather than traditional tax and spend, Miliband will look to predistributive measures such as the living wage, curbs on predatory energy and rail companies and universal childcare to combat inequality.

But the question he will need to answer is whether it is possible to fund the party's priorities -  jobs, housing, social care and childcare - without also raising taxes on middle and lower earners. If Labour goes into the 2015 election promising only to make the rich pay more, the Tories will be quick to dust down their "tax bombshell" posters. 

Ed Miliband and Swedish Social Democratic leader Stefan Lofven, visit the Royal Institute of Technology in Stockholm, Sweden. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Getty Images.
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Today's immigration figures show why the net migration target should be scrapped

We should measure different types of migration separately and set targets that reflect their true impact.

Today’s net migration figures show, once again, that the government has raised expectations of tackling migration and failed to deliver. This is a recipe for disaster. Today’s numbers run far in excess of 300,000 – three times over what was pledged. These figures don’t yet reflect the fallout from Brexit. But they do show the government needs to change from business as usual.

It has been the current strategy, after all, that led the British public to reject the European Union regardless of the economic risks. And in the process, it is leading the government to do things which err on the side of madness. Like kicking out international students with degrees in IT, engineering or as soon as they finish their degrees. Or doubling the threshold for investor visas, and in the process bringing down the number of people willing to come to Britain to set up business and create jobs by 82 per cent. Moreover, it has hampered the UK’s ability to step up during last year’s refugee crisis - last year Britain received 60 asylum applications per 1,000 people in contrast to Sweden’s 1,667, Germany’s 587 and an EU average of 260.

The EU referendum should mark the end for business as usual. The aim should be to transition to a system whose success is gauged not on the crude basis of whether overall migration comes down, irrespective of the repercussions, but on the basis of whether those who are coming are helping Britain achieve its strategic objectives. So if there is evidence that certain forms of migration are impacting on the wages of the low paid then it is perfectly legitimate for government to put in place controls. Conversely, where flows help build prosperity, then seeing greater numbers should surely be an option.

Approaching immigration policy in this way would go with the grain of public opinion. The evidence clearly tells us that the public holds diverse views on different types of migration. Very few people are concerned about investors coming from abroad to set up companies, create jobs and growth. Few are worried about students paying to study at British universities. On the other hand, low-skilled migration causes concerns of under-cutting among the low paid and pressure on public services in parts of the country that are already struggling.

The first step in a new approach to managing migration has to be to abolish the net migration target. Rather than looking at migration in the aggregate, the aim should be to measure different types of migration separately and set targets that reflect their true impact. In the first instance, this could be as simple as separating low and high skilled migration but in the long term it could involve looking at all different forms of migration. A more ambitious strategy would be to separate the different types of migration - not just those coming to work but also those arriving as refugees, to study or be reunited with their families.

Dividing different flows would not only create space for an immigration policy which was strategic. It would also enable a better national conversation, one which could take full account of the complex trade-offs involved in immigration policy: How do we attract talent to the UK without also letting conditions for British workers suffer? Should the right to a family life override concerns about poor integration? How do we avoiding choking off employers who struggle to recruit nationally? Ultimately, are we prepared to pay those costs?

Immigration is a tough issue for politicians. It involves huge trade-offs. But the net migration target obscures this fact. Separating out different types of immigration allows the government to sell the benefits of welcoming students, the highly skilled and those who wish to invest without having to tell those concerned about low skilled immigration that they are wrong.

Getting rid of the net migration target is politically possible but only if it is done alongside new and better targets for different areas of inward migration – particularly the low-skilled. If it is, then not only does it allow for better targeted policy that will help appease those most vocally against immigration, it also allows for a better national conversation. Now is the time for a new, honest and better approach to how we reduce immigration.

Phoebe Griffith is Associate Director for Migration, Integration and Communities at IPPR