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10 October 2017

How John McDonnell won the votes of the top 15 per cent

The unwritten story of how the shadow chancellor and his team defied his internal critics over tax. 

By Stephen Bush

Why did Labour advance at the last election? That’s the question that underpins Jeremy Corbyn’s strategy to do one better in the next contest. Some of the internal divisions about what exactly happened and why are the topic of my column in next week’s New Statesman, but one in particular has been neglected: the role of John McDonnell and his team in navigating the thorny issue of tax-and-spend.

McDonnell’s “two Jameses” – his communications director James Mills and his policy chief James Meadway – both took a lot of flack, including from me, about their decision to match the Tory offer on the 40p rate, a tax cut that overwhelming benefits the top 30 per cent of earners.

The argument that Meadway, formerly of the New Economics Foundation and one of the opposition’s biggest brains, made privately was that although people earning £42,000 to £50,000 are not on the breadline, hiking taxes on senior nurses, teachers, and train drivers can hardly be described as “soaking the rich”, and that matching the Tory offer would allow them to advance among these voters.

Having won the internal argument, Mills then did a good job of taking people who had kvetched about the policy – me again – and explaining, gently and firmly, why the politics of the tax cut were good for Labour.  They made the centre-piece of their policies their costings document, which firmly committed the party to avoiding any tax rises on anyone earning below £70,000. And at the election, Labour advanced with all working age demographics – including those earning £42,000 to £50,000.

I think this is noteworthy for two reasons: firstly because it at least appears to validate the Meadway-Mills argument. The second is that while there were many ways in which Labour’s manifesto was more radical than those offered in recent years, one of the elements of the party’s success may have been its considerable caution.

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