Why Miliband’s tax move is good news for the Lib Dems

The Labour leader's speech has reminded voters of two distinctive and popular Lib Dem policies: increasing the personal allowance and introducing a mansion tax.

Attempting to predict the issues that are likely to feature in a future general election is as foolhardy as it is difficult. However great the plans of those competing, however well honed their message calendars, the one thing we all know for certain is that events come along like storms in the desert and change the political landscape before our eyes.

But we speculate anyway, and occasionally we get it right. Probably the surest prediction we can make about the issues likely to be at play in the 2015 general election is that tax policy will feature heavily. Ed Miliband’s speech yesterday makes that as close to a certainty as possible.
 
The official Liberal Democrat response to Miliband’s speech was dismissive of his overall proposals: the Liberal Democrats in government have reduced the income tax paid by those on the lowest incomes by more in three years than Labour did in thirteen.
 
And the analysis of the speech by the Institute for Fiscal Studies supported the party’s assertion that the Lib Dem policy of raising the threshold at which people begin to pay income tax is a less complex and more effective way of helping the low paid than re-introducing the 10p rate.
 
Yet despite criticising the content, Liberal Democrats will be secretly rather happy with the Labour leader’s speech, for two reasons.
 
First, it shifts the political debate to the area where the Lib Dems are at their strongest: tax policy. For whatever else the party has done in government, it is the implementation of a £10,000 tax-free allowance that is cutting through the fog and being recognised by voters as a distinctive achievement.
 
In the run-up to the next general election, Liberal Democrats will want to talk of little else. Raising the threshold further – to the level of the average earnings of those on the national minimum wage – is already party policy. The party reasons that the combined message of having delivered the £10,000 threshold and seeking to go further in the next parliament is a very strong one indeed.
 
The second reason Liberal Democrats will be pleased with the speech is Miliband’s embrace of a mansion tax. You might think that the party would be annoyed by Labour’s blatant theft of one of its key policies, but actually the reverse is true.
 
The mansion tax is embedded in the minds of the public as a Lib Dem policy. It is unlikely that a random conversion to the merits of the idea will convince voters that if they want a mansion tax they should vote Labour. So by adopting the policy Miliband’s main achievement is to remind voters of the mansion tax, and to increase its importance in the political debate over taxation. Why would Liberal Democrats not welcome such a boost for one of the party’s most distinctive policies?
 
Labour's adoption of the policy also helps when it comes to negotiations in the event of another hung parliament, particularly if (as looks distinctly possible) the arithmetic allows for an arrangement between the Liberal Democrats and either Labour or the Tories. Most party members will not welcome Miliband’s change of heart because it is more likely to lead to a Labour-Lib Dem government. Contrary to popular belief, only a small number of party members would actively prefer that option.
 
Most Liberal Democrats would prefer to enter into an arrangement with whichever party agrees to implement more Lib Dem policies. And just as Labour’s warmer feelings towards electoral reform strengthened the Lib Dem hand in 2010 sufficiently to force the Tories into agreeing a referendum on the alternative vote, so the party’s embrace of a mansion tax makes it more likely that the policy will be implemented if Liberal Democrats end up in government, be it with Labour or the Tories.
 
Whether Miliband’s speech does Labour any good in the long-term remains to be seen, but Liberal Democrats should welcome it: there is every chance it will help Clegg’s party even more.
 
Nick Thornsby is a Liberal Democrat member and activist. His own blog can be found here
Deputy Prime Minister Nick Clegg and Business Secretary Vince Cable during a visit to the Ricardo Engine Assembly plant on September 24, 2012 in Shoreham-by-Sea. Photograph: Getty Images.
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Why Chris Grayling is Jeremy Corbyn's secret weapon

The housing crisis is Labour's best asset - and Chris Grayling is making it worse. 

It feels like the classic Conservative story: wait until the election is over, then cancel spending in areas that have the temerity to vote Labour. The electrification of rail routes from Cardiff to Swansea – scrapped. So too is the electrification of the Leeds to Manchester route – and of the Midland main line.

But Crossrail 2, which runs from north to south across London and deep into the capital's outer satellites, including that of Transport Secretary Chris Grayling, will go ahead as planned.

It would be grim but effective politics if the Conservatives were pouring money into the seats they won or lost narrowly. There are 25 seats that the Conservatives can take with a swing of 1 per cent from Labour to Tory, and 30 seats that they would lose with a swing of 1 per cent from Tory to Labour.

It wouldn’t be at all surprising if the Conservatives were making spending decisions with an eye on what you might call the frontline 55. But what they’re actually doing is taking money away from north-west marginal constituencies – and lavishing cash on increasingly Labour London. In doing that, they’re actually making their electoral headache worse.

How so? As I’ve written before, the biggest problem for the Conservatives in the long term is simply that not enough people are getting on the housing ladder. That is hurting them in two ways. The first is straightforward: economically-driven voters are not turning blue when they turn 30 because they are not either on or about to mount the first rungs of the housing ladder. More than half of 30-year-olds were mortgage-payers in 1992, when John Major won an unexpected Conservative majority, while under a third were in 2017, when Theresa May unexpectedly lost hers.

But it is also hurting them because culturally-driven voters are getting on the housing ladder, but by moving out of areas where Labour’s socially-concerned core vote congregates in great numbers, and into formerly safe or at least marginal Conservative seats. That effect has reached what might be its final, and for the Conservatives, deadly form in Brighton. All three of the Brighton constituencies – Hove, Brighton Kemptown and Brighton Pavilion – were Conservative-held in 1992. Now none of them are. In Pavilion they are third, and the smallest majority they have to overcome is 9,868, in Kemptown. The same effect helped reduce Amber Rudd’s majority in Hastings, also in East Sussex, to 346.

The bad news for the Conservatives is that the constituencies of Crawley, Reading, Swindon and in the longer-term, Bracknell, all look like Brightons in the making: although only Reading East fell to Labour this time, all saw swings bigger than the national average and all are seeing increasing migration by culturally-driven left-wing voters away from safe Labour seats. All are seeing what you might call “Hackneyfication”: commuters moving from inner city seats but taking their politics with them.

Add to that forced migration from inner London to seats like Iain Duncan Smith’s in Chingford – once a Conservative fortress, now a razor-thin marginal – and even before you add in the appeal of Jeremy Corbyn’s person and platform, the electoral picture for the Conservatives looks bleak.

(It should go without saying that voters are driven by both economics and culture. The binary I’ve used here is simplistic but helpful to understand the growing demographic pressures on the Conservatives.)

There is actually a solution here for the Tories. It’s both to build more housing but also to rebalance the British economy, because the housing crisis in London and the south is driven by the jobs and connectivity crisis in the rest of the United Kingdom.

Or, instead, they could have a number of measures designed to make London’s economy stride still further ahead of the rest, serviced by 5 per cent mortgages and growing numbers of commuter rail services to facilitate a growing volume of consumers from London’s satellite towns, all of which only increase the electoral pressures on their party. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.