This week I was joined by Rafael Behr of the Guardian, the sharpest political commentator around, to discuss the distinct feeling of anticlimax that has followed Labour’s landslide victory. We looked at whether the party’s caution has boxed it in (and boxed in the rest of us too) and the crisis on the right
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Lessons from Labour’s first months in power
1/ Don’t worship the God of Small Things
There’s a dangerous and stupid game we go through at every election. Wealthy broadcasters insist that Labour politicians rule out tax rises. And they are wealthy by the way, Laura Kuenssberg, the BBC’s political editor, Justin Webb, Amol Rajan and the other presenters on the Today programme are paid around £320,000 a year, an extraordinary sum that puts them in the top 0.5 per cent of income taxpayers.
I have never heard one of them “check their privilege” – to use that useful modern phrase – and reflect on how tax rises will hurt them disproportionately.
The Tory press joins in. Everyone joins in. It appears that we can only have an alternative to Conservative government if the opposition promises to stick to Conservative policies.
Labour and politicians of all parties duly play the game and promise never to raise income tax, national insurance and VAT. They ought to rebel. They ought to say that no politician can predict what crisis will hit the country in the future but they can guarantee that there will be a crisis, and add that we should not close off our options in advance.
Right now, the crisis is obvious. The legacy of the crash of 2008, which hit the UK disproportionately, and 14-years of Conservative rule is appalling public services and an investment drought.
Rachel Reeves appears to have believed that she could raise funds by fiddling with less significant taxes than Income Tax, NI and VAT. She must have learned by now that she cannot.
Her decision to means test the pensioners’ winter fuel allowance has been a study in political ineptness. No one from the Labour party made the argument that wealthy pensioners did not need the benefit, and sections of public opinion were genuinely outraged by the suggestion that old people just over the benefit threshold would suffer.
Their outrage was only compounded by the revelation that Starmer and his wife were accepting free clothes and free tickets to football matches and concerts.
Those of us who thought he was an admirably puritan figure clearly need to rethink.
I know it’s a cliché to quote the line of Louis X1V’s finance minister Jean-Baptise Colbert that, “the art of taxation consists in so plucking the goose as to obtain the largest number of feathers with the least possible amount of hissing” but there’s no escaping it.
Rachel Reeves succeeded in getting the smallest number of feathers with the largest possible amount of hissing.
The lesson is that small changes to the tax and benefit system can cause just as much unpopularity as large ones, which leads to my second point…
2/ Go big or go home
In a widely read letter to the Financial Times, which is, incidentally, taking over the role of the Times as the meeting place for “the establishment,” Lord Gus O’Donnell, a former Cabinet Secretary, Lord Jim O’Neill, a former Commercial Secretary to the Treasury, and many another member of the great and the good pointed out that the Conservatives had left the UK with an unsustainable fiscal settlement.
“The government has inherited spending plans that imply substantial real-terms cuts in public investment over the current parliament. We do not see how [Labour’s] planned ‘decade of national renewal’ can take place if these cuts are delivered. To follow through on these plans would be to repeat the mistakes of the past, where investment cuts made in the name of fiscal prudence have damaged the foundations of the economy and undermined the UK’s long-term fiscal sustainability.”
There is a yearning in the British soul to believe in the existence of nice, one-nation conservatives, who care for the public good and those less fortunate than themselves. This false sentimentality ignores the indisputable fact that nice, one-nation conservatives are invariably utter shits. Jeremy Hunt, who is treated by the media as a moderate, knew the Tories would lose and proceeded to poison the wells and ploughed salt into the field.
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