The shadow chancellor is using the same arguments as the SNP on corporation tax. Photo: Getty
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Ed Balls’ corporate tax announcement is a pain for Scottish Labour

The shadow chancellor's recent praise of competitive rates of corporation tax makes life harder for the Scottish Labour party, which opposes the SNP's plan to reduce the corporate tax rate in Scotland.

The SNP’s plan to reduce the corporate tax rate in Scotland to 3 per cent below the UK rate has been subject to a lot of criticism – and with good reason. It’s a terrible plan. Just ask the Canadians. Between 2007 and 2012, Mark Harper’s Conservative government cut Canada’s federal rate of corporation tax from 21 per cent to 15 per cent in the hope companies would hire more staff, invest in research and purchase new equipment, thus boosting their profits and growing the economy. Instead, businesses hoarded the savings and hiked executive pay. Frustrated by such brazen corporate greed, the then governor of the Bank of Canada, Mark Carney, took the unusual step of telling Canadian firms to free-up the billions of dollars’ worth of “dead money” they were sitting on: spend it productively or return it to investors, Carney said, but don’t just let it rot in the bank.

Up until now, Scottish Labour has aggressively pursued the SNP over its corporate tax policy. It has argued that Alex Salmond’s obsession with slashing the tax proves an independent Scotland would not be the Nordic-style social democracy envisioned by many Yes campaigners. By contrast, it would be a low-wage, light-touch tax-haven run for the benefit of predatory multinationals. But that attack line (hopelessly overcooked, as ever, by Scottish Labour’s press team) was abruptly undermined this week when Ed Balls began singing the praises of low corporate taxes. During a speech at the LSE yesterday, Balls said: “The last Labour government left Britain with the most competitive rate of corporation tax in the G7 and we are committed to maintaining that position.”

To be clear, Balls is not talking about lowering UK corporation tax from its current rate of 21 per cent. Indeed, Labour remains committed to reversing the 1 per cent reduction planned by George Osborne over the coming 12 months. But the logic of Balls’ argument – that Britain can attract investment by undercutting other major economies with “competitively” low business levies – is indistinguishable from that used by the First Minister to justify his party’s position on corporation tax. Just substitute “Scotland” for “Britain” and “London” for “the G7”. (Incidentally, Labour’s UK-wide case for lower corporate taxes is every bit as weak as the Nationalists’ Scottish case: according to the TUC’s Duncan Weldon, British companies have built up a staggering £600bn corporate surplus over recent years.)

Balls’ announcement highlights one of the key problems for Scottish Labour as it attempts to bring its central belt and west coast heartlands back on side before September. For all the party’s talk of Scotland’s “progressive” future within the UK, it can’t disguise the fact that Balls and Miliband are almost as hawkish on the deficit, welfare reform and immigration as the Tories. It is no good Johann Lamont deploying the same-old exaggerated rhetoric against the SNP (“Look beyond the saltire. Look beyond the plaid … We are the crusading force in Scottish politics”) when the next UK Labour government intends to match the Coalition’s spending cuts pound for pound in 2015/16. Likewise, Gordon Brown can’t really expect people to take his warnings about SNP economic policy seriously when, as Chancellor, he presided over a debt-and-finance-fuelled boom that ended in Britain’s worst financial crisis since the 1930s.

In some respects, the obstacles Johann Lamont faces in trying to craft a progressive case for the Union mirror those of Ed Miliband as he heads into the next election. Both leaders have to explain what centre-left radicalism looks like in the context of tight budgetary constraints. Both have to cope with opponents who are more adept at communicating their core messages. Both are also, unfortunately, hogtied by the past. Just as the wider British electorate still seems to hold the Blair and Brown administrations responsible for the state of Britain’s economy, so the Scottish electorate looks back on eight underwhelming years of Labour rule at Holyrood and thinks ‘We can do better’.

Of course, the key difference between Lamont and Miliband is that Miliband actually runs his party. Lamont, on the other hand, has to work with the policy programme she is given. It is difficult to overstate how awkward this is for Scottish Labour. The SNP’s corporate tax plan was a gift. As the Canadian experience shows, cutting corporate taxes makes little economic sense – unless your goal is to boost company profits without generating additional revenues for the state. Nor does it make any real political sense. Scottish business remains overwhelmingly hostile to independence, while representatives of the broader Yes campaign have repeatedly expressed their opposition to the policy and resent having to answer for it at public meetings. Yet, from now on, whenever Scottish Labour attempts to raise these points, all the SNP has to do is refer them back to Balls’ speech. It’s a familiar argument, but one that bears repeating: the only viable future for the Labour party in Scotland is more autonomy. For as long as it remains anchored to Westminster, the SNP will have the advantage. 

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The economics of outrage: Why you haven't seen the end of Katie Hopkins

Her distasteful tweet may have cost her a job at LBC, but this isn't the last we've seen of Britain's biggest troll. 

Another atrocity, other surge of grief and fear, and there like clockwork was the UK’s biggest troll. Hours after the explosion at the Manchester Arena that killed 22 mostly young and female concert goers, Katie Hopkins weighed in with a very on-brand tweet calling for a “final solution” to the complex issue of terrorism.

She quickly deleted it, replacing the offending phrase with the words “true solution”, but did not tone down the essentially fascist message. Few thought it had been an innocent mistake on the part of someone unaware of the historical connotations of those two words.  And no matter how many urged their fellow web users not to give Hopkins the attention she craved, it still sparked angry tweets, condemnatory news articles and even reports to the police.

Hopkins has lost her presenting job at LBC radio, but she is yet to lose her column at Mail Online, and it’s quite likely she won’t.

Mail Online and its print counterpart The Daily Mail have regularly shown they are prepared to go down the deliberately divisive path Hopkins was signposting. But even if the site's managing editor Martin Clarke was secretly a liberal sandal-wearer, there are also very good economic reasons for Mail Online to stick with her. The extreme and outrageous is great at gaining attention, and attention is what makes money for Mail Online.

It is ironic that Hopkins’s career was initially helped by TV’s attempts to provide balance. Producers could rely on her to provide a counterweight to even the most committed and rational bleeding-heart liberal.

As Patrick Smith, a former media specialist who is currently a senior reporter at BuzzFeed News points out: “It’s very difficult for producers who are legally bound to be balanced, they will sometimes literally have lawyers in the room.”

“That in a way is why some people who are skirting very close or beyond the bounds of taste and decency get on air.”

But while TV may have made Hopkins, it is online where her extreme views perform best.  As digital publishers have learned, the best way to get the shares, clicks and page views that make them money is to provoke an emotional response. And there are few things as good at provoking an emotional response as extreme and outrageous political views.

And in many ways it doesn’t matter whether that response is negative or positive. Those who complain about what Hopkins says are also the ones who draw attention to it – many will read what she writes in order to know exactly why they should hate her.

Of course using outrageous views as a sales tactic is not confined to the web – The Daily Mail prints columns by Sarah Vine for a reason - but the risks of pushing the boundaries of taste and decency are greater in a linear, analogue world. Cancelling a newspaper subscription or changing radio station is a simpler and often longer-lasting act than pledging to never click on a tempting link on Twitter or Facebook. LBC may have had far more to lose from sticking with Hopkins than Mail Online does, and much less to gain. Someone prepared to say what Hopkins says will not be out of work for long. 

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