George Osborne speaks at an event in Sydney on February 21, 2014. Photograph: Getty Images.
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Those who pay the 40p tax rate are not "the middle"

Just 15 per cent earn enough to pay the higher rate. Osborne is right to focus on helping the low-paid.

Two days ahead of the Budget, the Conservative revolt over George Osborne's stance on the 40p tax rate is continuing. The Chancellor's refusal to increase the threshold for the higher rate, in favour of helping low-earners through another large rise in the personal allowance (which is set to be increased from £10,000 to at least £10,500), is enraging those Tories concerned that the party's natural "middle class" supporters are being caught in a tax band intended for the rich.

Owing to successive reductions in the 40p threshold (which currently stands at £41,451, down from £43,875 in 2010), the number of people paying the rate has risen to a record high of 4.4m, up from 3m before the election. Norman Lamont and Nigel Lawson have both urged Osborne to act to relieve the "squeezed middle", while the Institue of Directors has warned of the damaging effect on work incentives. The Chancellor's alleged suggestion that the surge in the number of 40p taxpayers would aid the Tories by making voters feel a "success" (which may be partly true) has added fuel to the fire.

But barring a surprise U-turn on Wednesday (not unheard of in Budgets), he will ignore the pleas from right and increase the threshold by no more than 1 per cent, below the rate of inflation. It is far better, he believes, to target limited resources (the deficit is forecast to be £111bn this year) at the low-paid, who will benefit significantly from another rise in the personal allowance. This invites the rejoinder that Osborne chose to cut taxes for the richest 1 per cent by reducing the top rate from 50p to 45p in his 2012 Budget. But it is at least partly to compensate for that kamikaze act that the Chancellor is determined to reposition the Tories as the party for the low-paid

In this respect, Osborne is entirely right: it is not those who pay the 40p rate who are most in need of relief. Far from representing "the middle", those who are caught by the tax band represent the top 15 per cent of earners. The median salary for a full-time employee in the UK is just £26,884, well below the £41,451 you need to earn before paying the 40p rate. And even after falling within its reach, they will only pay the rate on income above this level (not their entire salary) meaning that the effect for many will be negligible. There may well be strong arguments for increasing the 40p threshold (Osborne should certainly be taxing the top 1 per cent far more) but it says much about the gulf between rhetoric and reality that higher rate taxpayers are still routinely described by the media and politicians as "the middle".

As I've noted before, there are better ways of supporting the low paid than raising the personal allowance - which will do nothing to help the five million workers who earn below £10,000.  It is those in the second-richest decile who gain the most in cash terms from the policy (mainly due to the greater number of dual-earning households), followed by the richest tenth, who gain marginally less due to the gradual removal of the personal allowance after £100,000 (a brilliant piece of stealth redistribution by Alistair Darling). As a percentage of income, it is middle-earners who gain the most, with those at the bottom gaining the least. Progressive alternatives to raising the income tax threshold include increasing the National Insurance (NI) threshold, which currently stands at £7,748, cutting VAT, which stands at a record 20 per cent and hits the poorest hardest, or raising in-work benefits such as tax credits.

But a rise in the personal allowance will at least do something to aid lower and middle earners, in contrast to a rise in the 40p threshold, which would benefit no one but the top 15 per cent.

George Eaton is political editor of the New Statesman.

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Meet Anne Marie Waters - the Ukip politician too extreme for Nigel Farage

In January 2016, Waters launched Pegida UK with former EDL frontman Steven Yaxley-Lennon (aka Tommy Robinson). 

There are few people in British political life who can be attacked from the left by Nigel Farage. Yet that is where Anne Marie Waters has found herself. And by the end of September she could well be the new leader of Ukip, a party almost synonymous with its beer-swilling, chain-smoking former leader.

Waters’s political journey is a curious one. She started out on the political left, but like Oswald Mosley before her, has since veered dramatically to the right. That, however, is where the similarities end. Waters is Irish, agnostic, a lesbian and a self-proclaimed feminist.

But it is her politics – rather than who she is – that have caused a stir among Ukip’s old guard. Former leader Paul Nuttall has said that her views make him “uncomfortable” while Farage has claimed Ukip is “finished” if, under her leadership, it becomes an anti-Islam party.

In her rhetoric, Waters echoes groups such as the English Defence League (EDL) and Britain First. She has called Islam “evil” and her leadership manifesto claims that the religion has turned Britain into a “fearful and censorious society”. Waters wants the banning of the burqa, the closure of all sharia councils and a temporary freeze on all immigration.

She started life in Dublin before moving to Germany in her teens to work as an au pair. Waters also lived in the Netherlands before returning to Britain to study journalism at Nottingham Trent University, graduating in 2003. She subsequently gained a second degree in law. It was then, she says, that she first learnt about Islam, which she claims treats women “like absolute dirt”. Now 39, Waters is a full-time campaigner who lives in Essex with her two dogs and her partner who is an accountant.

Waters’s first spell of serious activism was with the campaign group One Law for All, a secularist organisation fronted by the Iranian feminist and human rights activist Maryam Namazie. Waters resigned in November 2013 after four years with the organisation. According to Namazie, Waters left due to political disagreements over whether the group should collaborate with members of far-right groups.

In April 2014, Waters founded Sharia Watch UK and, in January 2016, she launched Pegida UK with former EDL frontman Steven Yaxley-Lennon (aka Tommy Robinson). The group was established as a British chapter of the German-based organisation and was set up to counter what it called the “Islamisation of our countries”. By the summer of 2016, it had petered out.

Waters twice stood unsuccessfully to become a Labour parliamentary candidate. Today, she says she could not back Labour due to its “betrayal of women” and “betrayal of the country” over Islam. After joining Ukip in 2014, she first ran for political office in the Lambeth council election, where she finished in ninth place. At the 2015 general election, Waters stood as the party’s candidate in Lewisham East, finishing third with 9.1 per cent of the vote. She was chosen to stand again in the 2016 London Assembly elections but was deselected after her role in Pegida UK became public. Waters was also prevented from standing in Lewisham East at the 2017 general election after Ukip’s then-leader Nuttall publicly intervened.

The current favourite of the 11 candidates standing to succeed Nuttall is deputy leader Peter Whittle, with Waters in second. Some had hoped the party’s top brass would ban her from standing but last week its national executive approved her campaign.

Due to an expected low turnout, the leadership contest is unpredictable. Last November, Nuttall was elected with just 9,622 votes. More than 1,000 new members reportedly joined Ukip in a two-week period earlier this year, prompting fears of far-right entryism.

Mike Hookem MEP has resigned as Ukip’s deputy whip over Waters’ candidacy, saying he would not “turn a blind eye” to extremism. By contrast, chief whip, MEP Stuart Agnew, is a supporter and has likened her to Joan of Arc. Waters is also working closely on her campaign with Jack Buckby, a former BNP activist and one of the few candidates to run against Labour in the by-election for Jo Cox’s former seat of Batley and Spen. Robinson is another backer.

Peculiarly for someone running to be the leader of a party, Waters does not appear to relish public attention. “I’m not a limelight person,” she recently told the Times. “I don’t like being phoned all the time.”

The journalist Jamie Bartlett, who was invited to the initial launch of Pegida UK in Luton in 2015, said of Waters: “She failed to remember the date of the demo. Her head lolled, her words were slurred, and she appeared to almost fall asleep while Tommy [Robinson] was speaking. After 10 minutes it all ground to an uneasy halt.”

In an age when authenticity is everything, it would be a mistake to underestimate yet another unconventional politician. But perhaps British Muslims shouldn’t panic about Anne Marie Waters just yet.

James Bloodworth is editor of Left Foot Forward

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear