Footballers don't necessarily work harder if they're paid more. Photo: Getty
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Transfer Deadline Day blows apart scare stories of Labour's plan to reinstate 50p tax rate

How footballers behave on Transfer Deadline Day suggests that raising the top tax rate isn't that dangerous.

Today sees a biannual event in which tens of thousands of people in our country glue themselves to their television and computer screens in a mass monitoring of a rare and globally mobile species. No I am not describing Autumnwatch with Bill Oddie. I am of course talking about Transfer Deadline Day, and the movements of many millionaire footballers across the globe.

The event twice a year when we can all watch members of the 1 per cent truly respond to national tax rates. For example, just monitor the movements today of Radamel Falcao; will he leave the tax haven of Monaco to come to England or Spain? The latter has a new 52 per cent tax rate.

Yet this more tracksuited version of what takes place daily in the financial sector also provides the first opportunity to test whether Labour’s plans to reinstate the 50p tax rate is having the apocalyptic effect that the Tories like to claim. How many of these starlets who are signing in and around the country will refuse to sign up for anything beyond six months for fear of the “war on the better off”, as the Telegraph’s Allister Heath describes a 5 per cent increase in taxation?

One of the big debates over the 50p rate is around the behavioural response it is claimed it creates. Of course there will be those who do choose a country by the lowest marginal tax rate, whether it is 45 per cent or 25 per cent. But the government argues that the behavioural response of such high-paid people coming to our country, and those already working here, would be huge. However, this argument relies on few facts and instead anecdotal evidence – a bit like rumours on Transfer Deadline Day.

Nevertheless, it does not stop there. As according to George Osborne’s logic since April 2012, players such as Wayne Rooney have been playing better, and working harder for their clubs. In fact, we should probably be thanking George Osborne (a Chelsea fan) for the excellent performance of the England team in the World Cup…

This is because the other plank of rightwingers' use of the behavioural argument by which Osborne axed the 50p rate is rarely disputed: that the rich work harder when taxed less. And to be fair, Rooney and other footballers earning over £1,000,000 a year (if we assume they declare this as income) may have indeed been training harder. But would it be because such a millionaire footballer has had an additional £700 a week more added to their current minimum of £20,000 a week?

Don’t get me wrong, £700 is a lot of money to me and most people. But to put it in perspective, that is the equivalent of the median earner who receives £517 a week (£26,800 a year) getting around an extra 18 quid a week more. Again not to be sniffed at, but not even enough for a Wayne Rooney hair appointment.

But would an £18 a week pay rise (or an increase in your wage by a 1/28) considerably raise the work rate of most people? I would hazard a guess that it probably would not in general. For example, would you work longer hours, such as an extra three hours a week, for a marginal pay rise of say £18, or would you be happy to get away at lunchtime on a Friday even if that meant you’d lose £18?

This is of course a relative question, given that those on middle and low incomes are more effected by other taxes such as VAT, than the average Premiership footballer. But surveys have shown that most people would rather work fewer hours even if this led to marginally lower pay. Shouldn’t we assume therefore that top millionaires are no different? Especially when you consider the proportions in pay they are dealing with.

So even if you are not interested in football nor footballers, you should still pay attention to this Transfer Deadline Day, and the whereabouts of Falcao, as it’ll be a prelude to one of the biggest arguments on taxation at the general election.

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Justin Trudeau points the way forward for European politics

Is the charismatic Canadian Prime Minister modelling the party of the future?

Six months after Canadian election day, Justin Trudeau’s Liberal party continues to bask in the glow of victory. With 44 per cent of support in the polls, the Liberals are the most popular party amongst every single demographic – men and women, young and old, and people of all educational backgrounds. 

While most European mainstream parties only dream of such approval, this is actually a small dip for the Liberals. They were enjoying almost 50 per cent support in the polls up until budget day on 21 March. Even after announcing $29.4 billion in deficit spending, Canadians overall viewed the budget favourably – only 34 per cent said they would vote to defeat it.

Progressives around the world are suddenly intrigued by Canadian politics. Why is Justin Trudeau so successful?

Of course it helps that the new Prime Minister is young, handsome and loves pandas (who doesn’t?) But it’s also true that he was leader of the Liberals for a year and half before the election. He brought with him an initial surge in support for the party. But he also oversaw its steady decline in the lead up to last year’s election – leadership is important, but clearly it isn’t the only factor behind the Liberals’ success today.

Context matters

As disappointing as it is for Europeans seeking to unpack Canadian secrets, the truth is that a large part of the Liberals’ success was also down to the former Prime Minister Stephen Harper’s extreme unpopularity by election time.

Throughout almost ten years in power, Harper shifted Canada markedly to the right. His Conservative government did not just alter policies; it started changing the rules of the democratic game. While centre-right governments in Europe may be implementing policies that progressives dislike, they are nonetheless operating within the constraints of democratic systems (for the most part; Hungary and Poland are exceptions).

Which is why the first weeks of the election campaign were dominated by an ‘Anybody But Harper’ sentiment, benefitting both the Liberals and the left-wing New Democratic Party (NDP). The NDP was even leading the polls for a while, inviting pundits to consider the possibility of a hung parliament.

But eight days before election day, the Liberals began to pull ahead.

The most important reason – and why they continue to be so popular today – is that they were able to own the mantle of ‘change’. They were the only party to promise running a (small) deficit and invest heavily in infrastructure. Notably absent was abstract discourse about tackling inequality. Trudeau’s plan was about fairness for the middle class, promoting social justice and economic growth.

Democratic reform was also a core feature of the Liberal campaign, which the party has maintained in government – Trudeau appointed a new Minister of Democratic Institutions and promised a change in the voting system before the next election.

The change has also been in style, however. Justin Trudeau is rebranding Canada as an open, progressive, plural society. Even though this was Canada’s reputation pre-Harper, it is not as simple as turning back the clock.

In a world increasingly taken by populist rhetoric on immigration – not just by politicians like Donald Trump, Nigel Farage, Marine Le Pen and other right-wingers, but also increasingly by mainstream politicians of right and left – Justin Trudeau has been unashamedly proclaiming the benefits of living in a diverse, plural society. He repeatedly calls himself a feminist, in the hope that one day “it is met with a shrug” rather than a social media explosion. Live-streamed Global Town Halls are one part of a renewed openness with the media. Progressive politicians in Europe would do well to take note.

Questioning the role of political parties today

Another interesting development is that the Liberal party is implicitly questioning the point of parties today. It recently abolished fee-paying, card-carrying party members. While this has been met with some criticism regarding the party’s structure and integrity, with commentators worried that “it’s the equivalent of turning your party into one giant Facebook page: Click ‘Like’ and you’re in the club,” it seems this is the point.

Colin Horgan, one of Trudeau’s former speechwriters, explains that Facebook is “literally a treasure trove for political parties”. All kinds of information becomes available – for free; supporters become easier to contact.

It was something the Liberals were already hinting at two years ago when they introduced a ‘supporters’ category to make the party appear more open. Liberal president Anna Gainey also used the word “movement” to describe what the Liberals hope to be.

And yes, they are trying to win over millennials. Which proved to be a good strategy, as a new study shows that Canadians aged 18-25 were a key reason why the Liberals won a majority. Young voter turnout was up by 12 per cent from the last election in 2011; among this age group, 45 per cent voted for the Liberals.

Some interesting questions for European progressives to consider. Of course, some of the newer political parties in Europe have already been experimenting with looser membership structures and less hierarchical ways of engaging, like Podemos’ ‘circles’ in Spain and the Five Star Movement’s ‘liquid democracy’ in Italy.

The British centre-left may be hesitant after its recent fiasco. Labour opened up its leadership primary to ‘supporters’ and ended up with a polarising leader who is extremely popular amongst members, but unpopular amongst the British public. But it would be wrong to assume that the process was to blame.

The better comparison is perhaps to Emmanuel Macron, France’s young economy minister who recently launched his own movement ‘En Marche !’ Moving beyond the traditional party structure, he is attempting to unite ‘right’ and ‘left’ by inspiring French people with an optimistic vision of the future. Time will tell whether this works to engage people in the longer term, or at least until next year’s presidential election.

In any case, European parties could start by asking themselves: What kind of political parties are they? What is the point of them?

Most importantly: What do they want people to think is the point of them?

Ultimately, the Canadian Liberals’ model of success rests on three main pillars:

  1. They unambiguously promote and defend a progressive, open, plural vision of society.
  2. They have a coherent economic plan focused on social justice and economic growth which, most importantly, they are trusted to deliver.
  3. They understand that society has changed – people are more interconnected than ever, relationships are less hierarchical and networks exist online – and they are adapting a once rigid party structure into a looser, open movement to reflect that.

*And as a bonus, a young, charismatic leader doesn’t hurt either.

Claudia Chwalisz is a Senior Policy Researcher at Policy Network, a Crook Public Service Fellow at the University of Sheffield and author of The Populist Signal: Why Politics and Democracy Need to Change