How the Lib Dems and others changed their tune on the 50p tax rate

Danny Alexander and former M&S boss Stuart Rose attacked Labour yesterday, but they used to insist that the top rate should remain in place.

Labour's promise to reintroduce the 50p tax rate was not just an attempt to prove that the party is committed to deficit reduction but also to set a political trap for the Conservatives. By rushing to quote businessmen opposed to the policy, the Tories have walked into it. Rarely in recent months have they looked more like the party of the rich. Meanwhile, the public (as ever) overwhelmingly support the measure. A poll for the Mail on Sunday found 60 per cent of voters in favour, with just 17 per cent opposed.

Many of those criticising the proposal have long argued against it (and often against progressive taxation of any kind) but it's worth noting a few who have changed their tune. Former M&S boss Stuart Rose, the chairman of Ocado, said yesterday that the 50p rate would "put at risk all the good work that has been done to put the economy back on track". But back in 2011, before George Osborne abolished it, he said: "I don't think that they should reduce the income tax rate. How would I explain to my secretary that I am getting less tax on my income, which is palpably bigger than hers, when hers is not going down? If, in the short term, a case was made for me to pay more than 50 per cent tax, which would help UK plc, I personally – Stuart Rose – would be prepared to pay more tax." Since austerity is going to continue for the entirety of the next parliament, it is hard to see how he can justify this volte-face.

Then there's the Lib Dems. In response to Ed Balls's announcement, Danny Alexander said: "Labour's hypocrisy on taxation is breathtaking. In government they left a system full of loopholes for the wealthy to exploit. Thanks to our action in government to raise capital gains tax, reduce pensions tax relief for the wealthiest and tackle tax avoidance, Lib Dems in government are raising more from those who have the most and making Britain more competitive. Reintroducing the 50p rate wouldn't help with either objective."

But before the 2012 Budget, he said repeatedly that the 50p rate should only be scrapped if a mansion tax was introduced. In July 2011, he told The Andrew Marr Show: "The idea that we're going to somehow shift our focus to the wealthiest in the country at a time when everyone's under pressure is just in cloud cuckoo land". No mansion tax was introduced, vetoed by David Cameron on the grounds that "our donors will never put up with it", but the 50p rate still went.

Alexander will no doubt point out that the current top rate of 45p is higher than that seen for all but one month of Labour's 13 years in office. But this still doesn't explain why it was right to reduce it. Ed Miliband, who has hardly made a secret of his disagreements with the last government's approach, can now argue that only Labour (which would also introduce a mansion tax) is committed to ensuring that the rich bear their fair share of austerity.

Danny Alexander at the Liberal Democrat conference in Glasgow last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Getty
Show Hide image

Commons Confidential: Dave's picnic with Dacre

Revenge is a dish best served cold from a wicker hamper.

Sulking David Cameron can’t forgive the Daily Mail editor, Paul Dacre, for his role in his downfall. The unrelenting hostility of the self-appointed voice of Middle England to the Remain cause felt pivotal to the defeat. So, what a glorious coincidence it was that they found themselves picnicking a couple of motors apart before England beat Scotland at Twickenham. My snout recalled Cameron studiously peering in the opposite direction. On Dacre’s face was the smile of an assassin. Revenge is a dish best served cold from a wicker hamper.

The good news is that since Jeremy Corbyn let Theresa May off the Budget hook at Prime Minister’s Questions, most of his MPs no longer hate him. The bad news is that many now openly express their pity. It is whispered that Corbyn’s office made it clear that he didn’t wish to sit next to Tony Blair at the unveiling of the Iraq and Afghanistan war memorial in London. His desire for distance was probably reciprocated, as Comrade Corbyn wanted Brigadier Blair to be charged with war crimes. Fighting old battles is easier than beating the Tories.

Brexit is a ticket to travel. The Independent Parliamentary Standards Authority is lifting its three-trip cap on funded journeys to Europe for MPs. The idea of paying for as many cross-Channel visits as a politician can enjoy reminds me of Denis MacShane. Under the old limits, he ended up in the clink for fiddling accounts to fund his Continental missionary work. If the new rule was applied retrospectively, perhaps the former Labour minister should be entitled to get his seat back and compensation?

The word in Ukip is that Paul Nuttall, OBE VC KG – the ridiculed former Premier League professional footballer and England 1966 World Cup winner – has cold feet after his Stoke mauling about standing in a by-election in Leigh (assuming that Andy Burnham is elected mayor of Greater Manchester in May). The electorate already knows his Walter Mitty act too well.

A senior Labour MP, who demanded anonymity, revealed that she had received a letter after Leicester’s Keith Vaz paid men to entertain him. Vaz had posed as Jim the washing machine man. Why, asked the complainant, wasn’t this second job listed in the register of members’ interests? She’s avoiding writing a reply.

Years ago, this column unearthed and ridiculed the early journalism of George Osborne, who must be the least qualified newspaper editor in history. The cabinet lackey Ben “Selwyn” Gummer’s feeble intervention in the Osborne debate has put him on our radar. We are now watching him and will be reporting back. My snouts are already unearthing interesting information.

Kevin Maguire is the associate editor (politics) of the Daily Mirror

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 23 March 2017 issue of the New Statesman, Trump's permanent revolution