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.
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.
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.
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