Ed Balls speaks at the Labour conference in Brighton last year. Photograph: Getty Images.
Show Hide image

Labour targets Osborne's 24 tax rises

The party says "It’s the same old Tory con – giving with one hand while taking away much more with the other."

One of the main messages that George Osborne will aim to send in his Budget tomorrow is that he believes in cutting taxes. Having increased the personal allowance to £10,000 (despite David Cameron arguing that the measure was unaffordable during the first 2010 leaders' debate) from £6,475 in 2010, he will attempt to claim ownership of this Lib Dem policy for the Conservatives when he announces that it will rise to at least £10,500 next year. The Chancellor will frame this as his response to the "cost-of-living crisis" (without using those words).

But as Labour has highlighted tonight, he also has a record of raising taxes. The party has issued a list of 24 levies increased by Osborne since 2010, including VAT, income tax age-related allowances ("the granny tax"), capital gains tax and inheritance tax. It calculates that taxes have risen by £24bn so far this parliament, with a further £3bn of increases to follow in 2014/15.

A party spokesman emphasised to me that Labour is "not opposed" to all of the tax rises (not least because some of them are progressive) but that it wanted to remind people that Osborne has "put taxes up significantly". The opposition wants voters to remember measures such as the VAT rise, rather than just the hike in the personal allowance, the key point being that most are worse off once all tax and benefit changes are taken into account. Here's the accompanying statement from shadow chief secretary to the Treasury Chris Leslie:

“We need a Budget that tackles the cost-of-living crisis which has left working people £1,600 a year worse off under the Tories.

“George Osborne wants to take credit for increasing the personal allowance, but hopes people forget his 24 Tory tax rises including the VAT hike. While millionaires have been given a huge tax cut the truth is millions of hard-working people have seen their taxes go up.

“It’s the same old Tory con – giving with one hand while taking away much more with the other. The VAT rise alone has cost families with children an average of £1,350 over the last three years. And the 24 Tory tax rises don't include the cuts to tax credits which have hit millions of working families.

“A Labour Budget this week would cut taxes for 24 million people on middle and lower incomes by introducing a lower 10p starting rate of tax.

“We’d get young people off benefits and into work with a compulsory jobs guarantee, freeze energy bills, expand free childcare, get more homes built and cut business rates for small firms. We’d also reverse the £3 billion tax cut for the top one per cent of earners to get the deficit down in a fairer way.”

The Tories will no doubt cite Labour's attack as further evidence that it the party is unwilling to take the "tough choices" required to reduce the deficit (forecast to be £111bn this year). But Osborne's record will also increase the demands from his own side for some relief to be offered in the Budget.

Here's the list of 24 tax rises released by Labour.

The 24 Tory Tax Rises

 

1.    VAT increased – to 20 per cent from 2011

 

2.    Income Tax age-related allowances frozen and eligibility restricted (“Granny Tax”) from 2013-14

 

3.    Income Tax higher rate threshold cut to £42,475 in 2011-12

 

4.    Higher Income Child Benefit Charge introduced 2013

 

5.    National Insurance Contributions rates, limits and thresholds increased in line with CPI rather than RPI from 2012-13

 

6.    Income Tax higher rate threshold frozen at £42,475 in 2012-13

 

7.    Insurance premium tax increased – from 2011

 

8.    Capital Gains Tax increased – to 28 per cent for higher rate taxpayers from June 2010

 

9.    New Beer Duty introduced on high strength beers from 2011

 

10. Duty on hand-rolling tobacco increased by an additional 10 per cent from 2011-12

 

11. ISA subscription limit uprated in line with CPI rather than RPI from 2012-13

 

12. National Insurance Contributions changes to contracting-out rebates from 2012-13

 

13. Capital Gains Tax annual exempt amount frozen, 2012-13

 

14. Stamp Duty Land Tax increase to 7 per cent on properties over £2 million from 2012-13

 

15. VAT increases on a range of items, including caravans, sports drinks, and listed buildings from 2012

 

16. Duty on tobacco increased by RPI + 5 per cent in 2012

 

17. Income Tax higher rate threshold cut to £41,450 in 2013-14

 

18. Capital Gains Tax annual exempt amount increased in line with CPI rather than RPI from 2013-14

 

19. Income Tax cap on reliefs introduced from 2013-14

 

20. Pension tax relief restricted from 2014-15 21.

 

21. Income Tax higher rate threshold Increase capped at 1 per cent in 2014-15 and 2015-16

 

22. Capital Gains Tax annual exempt amount increase capped at 1 per cent, 2014-15 and 2015-16

 

23. Inheritance Tax threshold frozen in 2015-16

 

24. National Insurance Contributions ending of contracting-out rebates from 2016-17

George Eaton is political editor of the New Statesman.

Photo:Getty
Show Hide image

Why isn't Labour putting forward Corbynite candidates?

Despite his successes as a candidate, the organisational victories have gone the way of Corbyn's opponents. 

The contest changes, but the result remains the same: Jeremy Corbyn’s preferred candidate defeated in a parliamentary selection. Afzhal Khan is Labour’s candidate in the Manchester Gorton by-election and the overwhelming favourite to be the seat’s next MP.

Although Khan, an MEP, was one of  the minority of Labour’s European MPs to dissent from a letter from the European parliamentary Labour party calling for Jeremy Corbyn to go in the summer of 2016, he backed Andy Burnham and Tom Watson in 2015, and it is widely believed, fairly or unfairly, that Khan had, as one local activist put it, “the brains to know which way the wind was blowing” rather than being a pukka Corbynite.

For the leader’s office, it was a double defeat;  their preferred candidate, Sam Wheeler, was kept off the longlist, when the party’s Corbynsceptics allied with the party’s BAME leadership to draw up an all ethnic minority shortlist, and Yasmine Dar, their back-up option, was narrowly defeated by Khan among members in Manchester Gorton.

But even when the leadership has got its preferred candidate to the contest, they have been defeated. That even happened in Copeland, where the shortlist was drawn up by Corbynites and designed to advantage Rachel Holliday, the leader’s office preferred candidate.

Why does the Labour left keep losing? Supporters combination of bad luck and bad decisions for the defeat.

In Oldham West, where Michael Meacher, a committed supporter of Jeremy Corbyn’s, was succeeded by Jim McMahon, who voted for Liz Kendall, McMahon was seen to be so far ahead that they had no credible chance of stopping him. Rosena Allin-Khan was a near-perfect candidate to hold the seat of Tooting: a doctor at the local hospital, the seat’s largest employer, with links to both the Polish and Pakistani communities that make up the seat’s biggest minority blocs.  Gillian Troughton, who won the Copeland selection, is a respected local councillor.

But the leadership has also made bad decisions, some claim.  The failure to get a candidate in Manchester Gorton was particularly egregious, as one trade unionist puts it: “We all knew that Gerald was not going to make it [until 2020], they had a local boy with good connections to the trade unions, that contest should have been theirs for the taking”. Instead, they lost control of the selection panel because Jeremy Corbyn missed an NEC meeting – the NEC is hung at present as the Corbynsceptics sacrificed their majority of one to retain the chair – and with it their best chance of taking the seat.

Others close to the leadership point out that for the first year of Corbyn’s leadership, the leader’s office was more preoccupied with the struggle for survival than it was with getting more of its people in. Decisions in by-elections were taken on the hop and often in a way that led to problems later down the line. It made sense to keep Mo Azam, from the party’s left, off the shortlist in Oldham West when Labour MPs were worried for their own seats and about the Ukip effect if Labour selected a minority candidate. But that enraged the party’s minority politicians and led directly to the all-ethnic-minority shortlist in Manchester Gorton.

They also point out that the party's councillor base, from where many candidates are drawn, is still largely Corbynsceptic, though they hope that this will change in the next round of local government selections. (Councillors must go through a reselection process at every election.)

But the biggest shift has very little to do with the Labour leadership. The big victories for the Labour left in internal battles under Ed Miliband were the result of Unite and the GMB working together. Now they are, for various reasons, at odds and the GMB has proven significantly better at working shortlists and campaigning for its members to become MPs.  That helps Corbynsceptics. “The reason why so many of the unions supported Jeremy the first time,” one senior Corbynite argues, “Is they wanted to move the Labour party a little bit to the left. They didn’t want a socialist transformation of the Labour party. And actually if you look at the people getting selected they are not Corbynites, but they are not Blairites either, and that’s what the unions wanted.”

Regardless of why, it means that, two years into Corbyn’s leadership, the Labour left finds itself smaller in parliament than it was at the beginning.  

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