Support 100 years of independent journalism.

  1. Politics
15 November 2010

Miliband stands firm on the 50p tax — or does he?

Labour leader committed to 50p tax rate "for the foreseeable future".

By George Eaton

As Mehdi noted at the weekend, Alan Johnson and Ed Miliband are engaged in a political struggle over the 50p tax. Johnson views it as a short-term response to the financial crisis and would like to scrap it at the earliest possible opportunity; Miliband views it as a social democratic achievement and would like to make it permanent.

For those who missed it, Johnson said in an interview with the Times (£):

I am only backing 50p for the times we are in. It is not ideal; five years ago (we) wouldn’t have done it. Our policy has to be based on fairness and what encourages people to do well.

Today, a spokesman for Miliband has responded, insisting that “we remain committed to it for now and for the foreseeable future”. That may seem clear enough but the precise formulation — note the telling reference to “the foreseeable future” — leaves Miliband with a significant amount of wriggle room.

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. The New Statesman’s weekly environment email on the politics, business and culture of the climate and nature crises - in your inbox every Thursday. A handy, three-minute glance at the week ahead in companies, markets, regulation and investment, landing in your inbox every Monday morning. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A newsletter showcasing the finest writing from the ideas section and the NS archive, covering political ideas, philosophy, criticism and intellectual history - sent every Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.

Having won the argument on progressive taxation, it would be foolish for Labour to retreat now. The 50p tax is popular with voters, raises vital revenue and acts as a brake on runaway inequality. It is also an important symbol of Labour’s commitment to a fairer society.

Content from our partners
How automation can help insurers keep pace with customer demand
How telecoms companies can unlock their growth potential through automation
The pandemic has had a scarring effect on loneliness, but we can do better

Johnson’s comments on the 50p rate, combined with his firm opposition to a gradute tax (he is said to have had a “blazing row with Miliband over the issue at the party conference) represent a serious challenge to Miliband’s authority. He must not back down.