Cameron repeats Boris's muddled defence of the super-rich

The top 1% of earners now pay 30% of all income tax because they're earning more. And the poorest still pay the largest overall share.

Boris Johnson has exerted much energy recently defending "the 1%" and their contribution to society in the form of tax. He said in his Margaret Thatcher lecture on Wednesday night: 

Last week I tried to calm people down, by pointing out that the rich paid a much greater share of income tax than they used to.

When Margaret Thatcher came to power in 1979 they faced a top marginal tax rate of 98 per cent, and the top one per cent of earners contributed 11 per cent of the government’s total revenues from income tax. Today, when taxes have been cut substantially, the top one per cent contributes almost 30 per cent of income tax; and indeed the top 0.1 per cent – just 29,000 people – contribute fully 14 per cent of all taxation.

That is an awful lot of schools and roads and hospitals that are being paid for by the super-rich. So why, I asked innocently, are they so despicable in the eyes of all decent British people? Surely they should be hailed like the Stakhanovites of Stalin’s Russia, who half-killed themselves, in the name of the people, by mining record tonnages of coal?

Boris's ideological stridency is often contrasted favourably by conservatives with David Cameron's timidity, so it's striking to see the PM make the same argument in a Q&A with i readers today. In response to a question on why the government cut the top rate of tax while simultaneously reducing benefits for the poorest through measures such as the bedroom tax, he said: 

You mention the cut in the top rate of tax. The fact is that if you carry on with a relatively high top-rate, that makes this country a less attractive place for wealth creators and entrepreneurs to be. If they decide to go elsewhere, that means fewer jobs created, less money for the Treasury, and less money to spend on schools, hospitals and growing our economy. These are all the things we took into account when cutting the top rate. Beyond that particular case, the fact is this: the top 1 per cent of income-taxpayers contribute nearly 30 per cent of all income tax – and those with the highest incomes will contribute more to income tax this year than under any year of the previous government.

Cameron isn't wrong; the top 1% do pay 30% of all income tax and currently pay a higher marginal rate than in any year of New Labour (the 50p rate wasn't introduced until April 2010). But what he doesn't mention is that the 30% stat tells us less about what has happened to the tax system than it does about what has happened to the income system. Over the period in question, the earnings of the rich have risen to previously unimaginable levels. As a recent OECD study showed, the share of income taken by the top 1% of UK earners increased from 7.1% in 1970 to 14.3% in 2005, while the top 0.1% took 5%. Quite simply, the rich are paying more because they're earning more. Is this really cause for us to thank them? If 11 million low and middle earners receive the pay rise they have been denied since 2003, they'll pay more tax too. 

Like Boris, Cameron also doesn't mention the inconvenient truth that the poorest continue to pay more tax than the richest. As the ONS recently found, owing to VAT and other regressive levies, the least well-off households pay 36.6% of their income in tax, while the wealthiest pay 35.5%. 

But even were this not the case, Cameron's argument is still an odd one for him to make. Had it not been for the Lib Dems, the top rate of income tax would almost certainly have been cut to 40% (Boris, meanwhile, has suggested that George Osborne should "brood" on cutting it to 30%), so it's more than a little opportunistic for Cameron to boast that the rich are paying more tax than under Labour. Rhetoric aside, his commitment to a progressive system is wafer thin.

David Cameron chats with Boris Johnson at Battersea Power Station in London on July 4, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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What happens when a president refuses to step down?

An approaching constitutional crisis has triggered deep political unrest in the Congo.

Franck Diongo reached his party’s headquarters shortly after 10am and stepped out of a Range Rover. Staff and hangers-on rose from plastic chairs to greet the president of the Mouvement Lumumbiste Progressiste (MLP), named after the first elected leader of the Democratic Republic of Congo.

Diongo, a compact and powerfully built man, was so tightly wound that his teeth ground as he talked. When agitated, he slammed his palms on the table and his speech became shrill. “We live under a dictatorial regime, so it used the security forces to kill us with live rounds to prevent our demonstration,” he said.

The MLP is part of a coalition of opposition parties known as the Rassemblement. Its aim is to ensure that the Congolese president, Joseph Kabila, who has been president since 2001, leaves office on 19 December, at the end of his second and supposedly final term.

Yet the elections that were meant to take place late last month have not been organised. The government has blamed logistical and financial difficulties, but Kabila’s opponents claim that the president has hamstrung the electoral commission in the hope that he can use his extended mandate to change the rules. “Mr Kabila doesn’t want to quit power,” said Diongo, expressing a widespread belief here.

On 19 September, the Rassemblement planned a march in Kinshasa, the capital, to protest the failure to deliver elections and to remind the president that his departure from office was imminent. But the demonstration never took place. At sunrise, clashes broke out between police and protesters in opposition strongholds. The military was deployed. By the time peace was restored 36 hours later, dozens had died. Kabila’s interior minister, claiming that the government had faced down an insurrection, acknowledged the deaths of 32 people but said that they were killed by criminals during looting.

Subsequent inquiries by the United Nations and Human Rights Watch (HRW) told a different story. They recorded more fatalities – at least 53 and 56, respectively – and said that the state had been responsible for most of the deaths. They claimed that the Congolese authorities had obstructed the investigators, and the true number of casualties was likely higher. According to HRW, security forces had seized and removed bodies “in an apparent effort to hide the evidence”.

The UN found that the lethal response was directed from a “central command centre. . . jointly managed” by officials from the police, army, presidential bodyguard and intelligence agency that “authorised the use of force, including firearms”.

The reports validated claims made by the Rassemblement that it was soldiers who had set fire to several opposition parties’ headquarters on 20 September. Six men were killed when the compound of the UDPS party was attacked.

On 1 November, their funerals took place where they fell. White coffins, each draped in a UDPS flag, were shielded from the midday sun by a gazebo, while mourners found shade inside the charred building. Pierrot Tshibangu lost his younger sibling, Evariste, in the attack. “When we arrived, we found my brother’s body covered in stab marks and bullet wounds,” he recalled.

Once the government had suppressed the demonstration, the attorney general compiled a list of influential figures in the Rassemblement – including Diongo – and forbade them from leaving the capital. Kinshasa’s governor then outlawed all political protest.

It was easy to understand why Diongo felt embattled, even paranoid. Midway through our conversation, his staff apprehended a man loitering in the courtyard. Several minutes of mayhem ensued before he was restrained and confined under suspicion of spying for the government.

Kabila is seldom seen in public and almost never addresses the nation. His long-term intentions are unclear, but the president’s chief diplomatic adviser maintains that his boss has no designs on altering the constitution or securing a third term. He insists that Kabila will happily step down once the country is ready for the polls.

Most refuse to believe such assurances. On 18 October, Kabila’s ruling alliance struck a deal with a different, smaller opposition faction. It allows Kabila to stay in office until the next election, which has been postponed until April 2018. A rickety government of national unity is being put in place but discord is already rife.

Jean-Lucien Bussa of the CDER party helped to negotiate the deal and is now a front-runner for a ministerial portfolio. At a corner table in the national assembly’s restaurant, he told me that the Rassemblement was guilty of “a lack of realism”, and that its fears were misplaced because Kabila won’t be able to prolong his presidency any further.

“On 29 April 2018, the Congolese will go to the ballot box to vote for their next president,” he said. “There is no other alternative for democrats than to find a negotiated solution, and this accord has given us one.”

Diongo was scathing of the pact (he called it “a farce intended to deceive”) and he excommunicated its adherents from his faction. “They are Mr Kabila’s collaborators, who came to divide the opposition,” he told me. “What kind of oppositionist can give Mr Kabila the power to violate the constitution beyond 19 December?”

Diongo is convinced that the president has no intention of walking away from power in April 2018. “Kabila will never organise elections if he cannot change the constitution,” he warned.

Diongo’s anger peaked at the suggestion that it will be an uphill struggle to dislodge a head of state who has control of the security forces. “What you need to consider,” he said, “is that no army can defy a people determined to take control of their destiny . . . The Congolese people will have the last word!”

A recent poll suggested that the president would win less than 8 per cent of the vote if an election were held this year. One can only assume that Kabila is hoping that the population will have no say at all.

This article first appeared in the 01 December 2016 issue of the New Statesman, Age of outrage