How Labour’s tax wobbles may help the Conservatives to win back lost voters

The party has appeared incoherent on a fiscal policy set two years ago.

NS

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How divided is Labour over tax and spend? The Budget’s third day story turns out not to be bad headlines for the government but for the opposition, with Jeremy Corbyn and John McDonnell saying different things on the Conservatives’ 40p rate cut, Labour backbenchers in uproar over the decision to back the cut, and Corbyn’s spokesperson appearing to contradict McDonnell and the party’s welfare lead, Margaret Greenwood, on the future of the benefits freeze.

To take the 40p rate row first. McDonnell's defence of the party's position has three planks to it. The public-facing bit is that the “winners” of Labour’s tax plans (everyone earning under £80,000) cannot be reasonably described as the few. The private parts are that that the party’s own polling shows that although most people in the United Kingdom do not earn close to £50,000, they regard it as an achievable figure and that going into an election promising to touch those earners will frighten the horses. It would also mean that Labour would have gone into the 2017 election promising that 95 per cent of earners would not have their taxes put up and would go into the next saying “Uh, actually, only 80 per cent of you would”, which one Corbynite graphically described to me as “an invitation to get ****ed” by the Conservative Party who would, of course, ask voters in the remaining 80 per cent if they thought they were next.

As for the benefits freeze, the Labour leadership knows that its present position on benefits is a mess and that it needs to sharpen it up but with the question of where the money to fund it comes from up in the air, the opposition's position on it is frequently muddled and incoherent.

How much trouble is the Labour leadership really in? Not much. As I say in my column this week, Corbyn's internal critics have no credibility within the party membership so the internal calls for the leadership to shift on tax aren't going to move the dial internally. Externally, no one cares about the Budget and there are no votes to be lost over supporting a tax cut.

What should trouble Labour is that they have looked so incoherent and wobbly over a policy set two years ago, and that the Conservatives appear to have finally found a political narrative that might actually win over some of the voters they lost last time.

Stephen Bush is special correspondent at the New Statesman and the PSA's Journalist of the Year. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.