Ed Balls speaks at the Labour conference in Brighton last year. Photograph: Getty Images.
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Balls calls for Osborne to scrap marriage tax allowance to fund 10p tax rate

Shadow chancellor says 10p tax rate would benefit two-thirds of married couples, while tax allowance would help just one-third.

Ahead of the Budget on Wednesday, Ed Balls has given an interview to the BBC calling on George Osborne to scrap the planned marriage tax allowance and use the money saved to introduce a 10p tax rate.

It's a smart intervention, not least because the socially liberal Osborne privately loathes the policy (for both political and economic reasons). As Balls notes, despite the broad promise to "recognise marriage" in the tax system, just a third of couples (4.1 million) will gain from the move. Eighty four per cent of the winners are men and just one in six families with children will benefit. By contrast, a 10p rate of tax would help 24 million taxpayers, including two-thirds (eight million) of married couples. 

Here's Balls's exchange with Nick Robinson: 

EB: What did he actually announce last year, he said that he would introduce a married couples allowance which, when you look at the detail, only goes to a third of married couples, and one in six families with children, it goes mainly to men. We think what we should actually do is scrap the married couples allowance which is perverse and unfair, and use that money to give a tax cut for all middle and lower income families. We propose a new 10p starting rate of income tax, it's better than the personal allowance, because it’s better for work incentives, it would help two-thirds of married couples, it would help women as well as men, families with children. Let’s cut taxes for working families, and let’s ease this cost-of-living crisis rather than carrying on pandering to Tory backbenchers with tax cuts that are unfair and don’t make sense.

NR: Let me be clear what you’re telling us, if you’re Chancellor, the marriage tax break goes?

EB: Well it goes, because let’s be honest, it doesn’t go to widows, it doesn’t go to people who’ve been left by an abusive husband, it only goes to a third of married couples, the vast majority of families with children get no benefit, get rid of that, and use that money to help all middle and lower income families struggling with the cost-of-living crisis. Fair tax cuts from Labour, not unfair tax cuts from George Osborne.

When I asked a Balls source whether the announcement meant the revenue that would be raised through a mansion tax (which Labour has pledged to introduce on properties worth more than £2m to fund a 10p rate) could be used for other measures, I was told that the party was not "de-linking 10p and mansion tax", or making a firm commitment to scrap the marriage tax allowance to help pay for the former. Rather, it is an example of a fairer choice that Osborne could make next week and an affirmation of Labour's commitment to tax cuts for the many, not the few. 

Balls is certainly right to emphasise his opposition to the marriage tax allowance, which is, as I've written before, a terrible policy. It will reduce work incentives by encouraging second earners to stay at home, further complicate the tax system and do little to support those families most in need of help. It's also, as Osborne has recognised, bad politics.

In a GQ article earlier this year, Andy Coulson described the perception that the Tories frown upon single parents as "electoral halitosis", but this policy unambiguously discriminates against them. Among those who also don't gain from the policy, as the campaign group Don't Judge My Family has noted, are widows and widowers, people who leave abusive relationships and working couples. Are liberal Conservatives really comfortable with tilting the tax system against them? The philanderer on his third marriage gains, while the hard-pressed single mother is ignored.

But under relentless pressure from Conservative backbenchers, Cameron has been forced to press ahead with a measure that will further toxify the Tory brand. 

George Eaton is political editor of the New Statesman.

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What does it mean for Ukip if it loses in Stoke-on-Trent Central?

The party’s prospects are in question if it fails to win over the “Brexit capital” in Thursday's by-election.

“The Only Way Is Up!” blasted through a hall in Stoke-on-Trent Central on a damp Monday evening earlier this month. It was the end of a public Ukip meeting, in which Nigel Farage and his successor and by-election candidate Paul Nuttall made their rallying cries to an audience of around 650 supporters.

But even then, a fortnight ago, the note of triumph in the dance classic was tinged with uncertainty. “We’ve won the war, but we’ve yet to win the peace,” Farage admitted to the sympathetic crowd. And while this message is supposed to make Ukip’s fight relevant even in the context of Brexit-bound Britain, it betrays the party’s problem: the battle that was its raison d'être is over.

Failing fortunes

Since then, the party has had more to contend with. Its candidate in the Labour seat has been caught lying about having “close personal friends” killed at the Hillsborough disaster. This comes on top of a number of other false claims, and an investigation into whether he falsely registered his home address as being in the constituency.

After these scandals – and a campaign seemingly unable to turn out apathetic voters (which I covered a couple of weeks ago) – Ukip’s chances in the West Midlands seat look worse than expected.

Initially the main challenger to Labour, Ukip is now being predicted for third or even fourth place in the seat, behind a Tory party that essentially stood aside to give Nuttall room, and to focus on a concurrent by-election campaign in Copeland.

It’s in Labour’s interest for the campaign to continue looking like a close Labour-Ukip fight, in order to keep hold of tactical voters. But both the Conservative and Lib Dem campaigns are feeling more buoyant.

“We are relatively confident that Ukip are not going to win, and that is quite a change,” the Lib Dem campaign coordinator Ed Fordham told me. “That has actually relieved lots of voters of the emotional risk of letting in what they perceive to be an unpleasant, far-right option . . . and voting for who they would like to represent them.”

One local activist chirped: “It will hopefully be a terrible result for Ukip.”

So what will it mean for Ukip if it loses?

Great expectations

Ukip has a lot riding on this seat. Farage called the by-election “absolutely fundamental” to Ukip’s future. Its new leader, Nuttall, took the risk of running as the party’s candidate there – riding his reputation on the by-election.

This created a lot of hype about Ukip’s chances, which the party has privately been trying to play down ever since. Even before the scandal surrounding Nuttall, he was emphasising that the seat had only been Ukip’s 72nd target, and told me he had taken a gamble by running for it. “The way it’s being written up as if this is the one – it wasn’t,” he insisted.

But Stoke-on-Trent, where 69 per cent voted Leave, has been labelled the “Brexit capital”. According to political scientist Rob Ford, the author of Revolt on the Right who has been studying Labour’s most Ukip-vulnerable seats: “It should be a pretty favourable seat for them, pretty favourable demographics, pretty favourable [negative] attitudes about the EU, very high Brexit vote there and so on.”

In other words, if Ukip can’t win here, against a weak Labour party, where can it win?

Struggle for seats

Brexit is central to Ukip’s by-election campaign. The party has highlighted Labour’s splits over Europe, pointed out the Labour candidate Gareth Snell’s Remainer credentials, and warned that the government needs to be held to account when negotiating Britain’s exit.

But Ford believes this rhetoric is unlikely to work, since the Tories are already pursuing a “hard” Brexit focused on immigration control. “A difficulty for Paul Nuttall and Ukip is that people are going to say: why would we vote for you when we’re getting what we want from the government? What’s the point right now?” he said. “I can have all the Brexity stuff, all the immigration control stuff, but with none of the incompetence and serial lying about Hillsborough – I think I’ll take that!”

So if rerunning the EU referendum doesn’t work, even in such a Brexit-heavy seat, this means trouble for Ukip elsewhere in the country. A Ukip councillor in a top Ukip target seat with similar demographics to Stoke believes it’s “crisis time” for the party.

“It is very sad to say, but Ukip has lost its way,” they told me. “It’s still a strong party, but after losing Nigel, it’s lost a little of its oomph. The new gentleman [Nuttall] has been silly with the comments he’s made. That’s a big worry in some regards. You need to be a people person. It’s a serious situation at the minute.”

If Ukip can’t prove it can win parliamentary seats – even in favourable by-elections – then it will be difficult to prove its authority as a political party come the general election.

Leadership lament

Should Nuttall lose, Ukip’s leadership will come into question. Again. During a tumultuous time late last year, when the favourite Steven Woolfe left the party after a physical altercation, and Diane James quit the leadership after 18 days, commentators asked if Ukip was anything without Farage.

When Nuttall eventually took over, the same voices warned of his threat to Labour – citing his northern and working-class roots. It’s likely this narrative will change, and Farage’s golden touch pondered again, if Nuttall fails to win.

But rather than panic about its national leader, Ukip must look carefully at those who commit to the party in local campaigns. On the ground in Stoke, running Nuttall as a candidate instead of a local Ukipper is seen as a mistake.

“I don’t know why they did that,” one local activist for an opposing party commented. “If they’d run Mick Harold, they would’ve won. He’s a Stokie.”

Harold, the deputy chair of Staffordshire County Committee, and chair of Ukip’s Stoke-on-Trent Central/North branch, won 22.7 per cent of the vote for Ukip in the constituency in 2015. He insists that he stands by his decision to step aside for Nuttall, but does highlight that Ukip should increase its vote share.

“If we’re increasing our percentage share of the vote, we’re still moving forward and that’s how we’ve got to look at it,” he told me. “I got 22.7 per cent in 2015. I would think this time we’re going to certainly get somewhere around the 30 per cent mark.”

Would it have been more likely to achieve this with Harold as candidate? “Whatever happens, happens, we’ve just got to move forward,” he replied. “If you’ve made a mistake, you move on from it.”

I have heard similar misgivings from local activists in other parts of the country – people who have achieved impressive results in local elections and the general election, but haven’t had much thanks from the national party. “We need to get professionalised now,” one such campaigner said. “Because we’ve got grassroots people who are not career politicians [doing all the hard work].” They say their local party is fed up with leadership being dictated by “personal grudges” at the top of the party.

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As I’ve written before, I don’t think this is the end of Ukip. Once Brexit starts to bite, and it’s clear immigrants are still needed to fill jobs, there will be resentment enough to make space for them again. But losing Stoke will highlight the challenges – of purpose, leadership and local organisation – that the party will need to overcome for its next stand.

Anoosh Chakelian is senior writer at the New Statesman.