It seems you can’t move at the moment for media speculation about the possibility of a Blairite challenge for the party leadership – today’s bout of overheated rumour mongering and misdirected briefing comes courtesy of the BBC:
The Labour Party’s website is likely to play a pivotal role in the battle to be its next leader, it has emerged.
MPs’ leadership nominations will be published on the site, although party sources denied reports the list will be updated hourly to boost interest.
Nevertheless, opponents of Gordon Brown reportedly plan to use it to show growing support for David Miliband, in an effort to persuade him to stand.
MPs can nominate a candidate even if they have not entered the race.
Much as a contested election would be good for party in terms of its internal democracy and as a vehicle for policy debate amongst members, the more I look at the situation that developing around the upcoming leadership contest the more convinced I’m becoming that the very last thing we need is David Milliband’s name on the ballot paper – or even that of any credible challenger from the Blairite ‘wing’ of the party.
There are two things, in particular, that lead me to that opinion, both of which are closely related.
First, there’s the fact that the Tories have been talking up the possibility of Milliband as an alternative to Brown, and that inevitably raises suspicions in my mind as to exactly what it is they see in Milliband that would lead them to prefer to contesting the next general election with him as Party Leader/Prime Minister rather than Brown.
The second thing that’s setting the old ‘there’s more to this than meets the eye’ spider-sense going in the concerted efforts of the Tory Party to attack Brown via the back door, i.e. by means of his reputed relationship with the Smith Institute.
That’s one’s been puzzling me for a while because I couldn’t quite see what the strategy is.
Sure there’s a transparently obvious attempt under way to mire Brown in allegations of sleaze and financial chicanery – but if you actually look closely at the Tory’s allegations and how they’ve been reported in the press what is becoming increasingly apparent is that:
1. It’s only the broadsheets that have shown any real interest in the ‘story’ at all, so the smears are hardly hitting a mass audience.
2. The Tory’s ‘case’ against Brown is actually very thin and rests heavily on arcane technicalities in areas of law and regulation about which the majority of the electorate don’t know, understand or care about and much of the actual press reporting have been little short of abysmal in its blatant misreporting of the actual content of the regulations.
On April 1st (ironically or appropriately depend on your preference) The Times reported that the Tory Party have asked the Electoral Commission to investigate Brown alleged links to the Smith Institute, which the Tories appear to be claiming is operating as a ‘Third Party’ organisation in electoral law, a report which includes the claim that:
Under electoral laws, any organisation that develops policy for political parties or helps promote politicians must declare all donations of more than £5,000.
That is utter rubbish.
The regulations in PPERA 2000 that cover Third Party organisations relate to the production of ‘election materials’ by those organisation – i.e. actively campaigning in support of a particular party or candidate and the only regulations in that section of the Act that cover policy develop relate only to direct sponsorship of research/studies and any publications or conferences conducted to promote them.
It unlikely, in the extreme, that the Tories will hit paydirt with their attacks on the Smith Institute – the best they could hope for is a minor technical breach of regulations that offers them little effective milage – it’s only a couple of weeks since Cameron was caught with his trousers round his ankles over his ‘Leader’s Club’ dinners at the House of Commons and who’s talking about that now?
The Tory Party ‘High Command’ may be many things, but they’re not [completely] stupid, so there obvious some degree of method to these attacks, something they hope to achieve by them, but what exactly?
If they expect Brown’s alleged relationship with the Smith Institute to turn into the next ‘loans for peerages’ scandal then they’re going to be sadly disappointed – the whole thing is just too technical and too arcane to have any real legs with the wider electorate. It might make a bit of filler in the Times and the Torygraph but its not really the stuff of Daily Mail headlines and Sun editorials, so what the deal here?
What would either a surprise victory for someone David Milliband or a politically compromised Smith Institute give them that would be perceived to be to their electoral advantage?
However it been done, the smart money has it that Gordon Brown has been quietly preparing for his ascension to the top job for quite some time and probably has a clearly defined and carefully planned programme of new policies and initiatives waiting in the wings, ready to be rolled out during his first 100 days in office as Prime Minister.
Now if that is true, then Brown almost certainly has the initiative once he takes over at the top – he can roll out his programme and set the political agenda forcing Cameron, at least initially, to dance to his tune, then take a few soundings as to the mood of the electorate and decide whether or not a snap general election will be in his favour or not.
That’s an option that the party won’t have if Milliband (or an as yet unknown Blarite challenger) were to beat Brown to the leadership simply because such a challenger would not have done the groundwork necessary to come out fighting and seize the initiativein anything like the same way and it could also be ruled out as a possibility for Brown if the Tories could blow enough smoke around the Smith Institute, which almost certainly has done some of the detailed policy work, to compromise its political position and reputation such that its output becomes too hot to handle for fear of yet more allegations of sleaze.
Why should this matter to the Tories? Well, give me an example of a detailed Tory policy developed and promoted by David Cameron since he became their leader…
… carry on …
Thus far, off the top of my head, there’s been a new ‘green’ tax on airline travel that, frankly, was about as popular as finding oneself in a transatlantic flight with a party from the Osama Bin Laden appreciation society and some sort of vaguely specified restoration of tax allowances for married couples as part of a social policy that big on platitudes and sentiment and a veritable vacuum when it comes to ideas and detail.
Cameron says that he’ll ‘promote social responsibility’ he just can’t say how because he really doesn’t know.
It says a lot that, thus far, Cameron’s best received policy ‘idea’ was the one about Britishness where he suggested that the government should leave the subject well alone.
That about sums him up really, doesn’t it? The one idea he’s had that people seem to like is the one that involves him doing nothing.
One of the key things that the Tories will be banking on heading into the next general election is that, as happened in 1997, the electorate will have reached a point where they feel that its time for a change – and that may well be what will happen.
What’s much less certain at this stage is exactly what kind of change the electorate will be looking for – a simple change of ruling party or something more fundamental in terms of a shift away from the politics of style, soundbites and presentation to the politics of substance.
If its the latter then, right now, the Tories look likely to be a deep trouble – Cameron may be personable enough in his ‘nice guy’ act but the Tories have got no real policies to speak of at the moment and their investment in Cameron’s image and public profile has been so extensive and all-encompassing over the last year that the rest of Shadow Cabinet might as well not exist.
One suspects that if one did a survey to ascertain just exactly which Tory shadow cabinet members the general public public could recognise just from photographs alone then the results, in terms the most recognisable, would probably go Cameron, Boris, William Hague and then ‘A N Other’, with Boris and Hague making the top three only be virtue of having appeared on Have I Got News For You.
Of course the Tories have made public calls for the next Labour leader – whoever it turns out to be – to call a snap election, but then that’s really only the usual bit of political bravado. As things stand a snap election is almost certainly the last thing the Tories want, especially as they appear to believe that if Brown does become the next Prime Minister he’ll be hitting the ground running with a detailed and cohesive programme of policies of the kind that cannot but put the Tories on the back foot and rip away any initiative they’ve gained from Blair’s overly protracted ‘farewell tour’.
As things stand, the Tories are still a long way of having the kind of detailed political programme necessary to fight a general election campaign driven primarily by policies rather than political spin and media presence, having bought into more or less the same overall strategy of fine words and few details that Blair used so effectively in 1997.
What could well be different come the next election is how the incumbent government responds to such a strategy.
By the 1997 election, the Major government had long since run out of ideas and had fallen into arguing amongst themselves over issues, like Europe, that really weren’t that big on the public’s radar – as the abject failure of Hague’s ‘save the pound’ strategy underlined in 2001. This enabled Blair to’mug it’ all the way to Downing Street on the back of a programme that made plenty of fine-sounding promises but did little to explain, in detail, exactly how those promises would be delivered simply because the Tories were in too great a disarray to mount an effective fightback.
That same position, one could easily argue, is pretty much where the current government has reached right now – although much of that is due to an enforced ‘hiatus’ in the real business of politics arising from Blair’s extended stay in the political departure lounge…
…except that waiting in the wings is – so its believed – not only a new leader but a new leader with ideas and a clear, well-defined programme.
Major lost the initiative and then the election because he and Tories had no way of regaining the political initiative.
Labour’s forthcoming leadership election offers the party a way doing what Major couldn’t and regaining that initiative, but only if the incoming leader is able to hit the ground running and put the opposition parties on the back foot straight away.
Brown is almost certainly capable of that, Milliband isn’t, not because he lacks ability but because he will not have had the time and opportunity to prepare the kind of policy programme and strategy necessary to throw Cameron on the back foot and keep him there all the way (hopefully) to a fourth election victory.
Little wonder, then, the Tories are so keen on Milliband and so determined to try and cash a shadow of sleaze over an organisation – the Smith Institute – whose policy development work will almost certainly play a key role in those critical first 100 days should Brown become leader, as pretty much everyone expects.
Whatever view one might have of Gordon Brown politically, strategically his ascension to the leadership is the only choice that makes sense.
20 thoughts on “The Brown Supremacy”
I agree with you up to a point, but there are a couple of other points I’d make.
From a Tory (or at least anti-Labour) perspective, attacking Brown is simply a win-win situation. I stand by my view that Miliband is not leadership material – at least not yet. All this Tory spin about him being the most feared of all prospective opponents is surely just that – guff and spin. If, by some miracle, Brown were to lose (and God forgive me, but I’d weep with laughter), Miliband would face an impossible job, with a brooding Brown on the backbenches (can you imagine?). He’s a wonk and a technocrat – fine in some situations; not in this one.
Assuming, though, that GB does win comfortably, the recent spate of bad press will mean that his coronation runs the risk – to put it no stronger than that – of being a damp squib. The contest, which now seems certain, could easily be bloody in the extreme. The media has been pretty unremittingly hostile – witness the reaction to the pensions “scandal”, and the way a Budget which was initially being hailed as politically masterful when it was delivered was turned within hours into a “disaster” when it became clear that he’d done his smoke-and-mirrors act again (and legitimised the principle of income tax cuts into the bargain).
Likewise with his “Stalinist” tendencies – which have been remarked upon for years, and are hardly news – and his “Macavity” trick, which was first noticed before the Iraq war, when he remained totally silent until the die was cast, and then made about one speech in favour – the very least he could possibly have done without being painted as a wrecker. These are not new; but as Blair’s time runs down, Brown’s flaws become magnified.
Now, as you say, Brown is no mug; he’s been preparing for this for years, and he will “hit the ground running” – of that I have no doubt. But then his Budget was supposed to pull off the same trick, and it failed dismally. Political entropy is very hard to reverse; Brown has to hope that his succession is seen as a “renewal in office”, but of course it’s unlikely it will be anything of the sort. He may well, from a Labour perspective, be full of new ideas and initiatives, but one has to wonder – after ten years of co-authorship of the New Labour project, what’s left in the hat – and if it’s so revolutionary, why’s it still in there anyway?
I think you impute slightly more guile to the Tory strategy, though, than may be merited. They are trying to buy time, yes, but they’re also doing their best simply to mire the ‘new’ guy in whatever low-level sleaze and intrigue they can, reinforcing the message in the voters’ mind that this is not a new broom, but the same old shit in a different packet.
Whatever comes to hand – Smith Institute, pensions, disgruntled civil servants – they’ll use against him. And why the hell not? For years now the Conservative press has been furious that, faced with a succession of open goals, the Tories have been unwilling or unable to put the ball in the net. Well, now the Tories have a star striker who’s banging them in with reasonable regularity. So what if doubts over his ability at the top level remain? Your defenders keep colliding with each other and he keeps knocking them into the empty net: job done.
The truth is that the media worm has turned, and there seems little Labour can do – at the moment – to reverse the flow of negative press. So while the government may not be in quite the state that Major’s was in 1995 – though it’s not all that far off – the press probably is. And once you are in that situation, the only way to get them back onside is to renew, to replace the leadership, to bring in something fresh and different. That’s what the Tories have done, what the Lib Dems haven’t done, and what Labour need to do – but there aren’t any established goalscorers on the bench; just a bunch of old journeymen with dodgy knees, and a young forward with no proven strike rate to his name.
In Euro 2004, Big Phil Scolari took off superstar Luis Figo against England because he was tiring and misfiring, and brought on young Spurs flop Helder Postiga. It could have cost him everything. In the event, Postiga scored, and Portugal won. But fuck me, that took some balls – and it could, so easily, have gone wrong for him.
Replacing Brown at the last minute is a far bigger gamble. Do you have the balls?
Fairly convincing piece Unity, makes alot of sense.
Oh yeah, dude, seriously, you need to get a link to the main page on here (or make your logo clickable)!
Sorry, you Labour supporters, but what your party needs is a REAL contest. I’m surprised you guys, much of the mainstream left and centre left blogoshere and media, continue to ignore John McConnell (MP for Hayes and Harlington) in his bid to lead the party. He is the only person who is prepared to fight front-runner Gordon Brown on his appalling record as Chancellor. The main problem for Labour, is that what happens after Blair finally goes. Those who may want to lead the party would have to jettison all of Blair’s policies in a bid to give themselves back some self-respect. It’s a shame that few Labour MPs have put themselves forward (it’s not just the party’s rules which are to blame), because there’s very little genuine talent left in the party, a process that started by former leader Lord Kinnock.
Fair enough, Bob, but people aren’t up to their neck in ‘muck and bullets’. They’re – generally – earning more than they were 10 years ago (though also giving more to the Exchequer), and while they may be unconvinced that 10 years of Labour has achieved much for the country (see last week’s Observer survey), their own personal experience of the NHS, schools etc. is unlikely to be worse than under the Tories.
So people don’t feel that they’re in a hole; they don’t think there’s a crisis which requires a strong, experienced hand at the tiller. The overwhelming sense is just that things have run out of steam. Among people who voted Labour in ’97, New Labour is a good idea whose time has, arguably, gone. Among those of us who didn’t we’re telling everyone that we told them so, even if it took rather longer than I expected for it to happen. Voters may not want radical change (though I wish they did) but they do want a change, and Brown doesn’t offer that.
Brown has hitherto been seen as you describe him – dour and unexciting, yes, but also believed to be formidable, smart, and good at what he does. My point is that just as his virtues tended to be exaggerated by some in the media when New Labour was in its ascendancy, so his flaws are being exaggerated now by an unremittingly hostile press and quite a few nervous colleagues.
And, with due respect to Unity, a lot of this is nothing to do with the Tories; it’s Labour people who are behind the whispering campaign. The Telegraph have hated Brown for years; and they’ve been able to rely on friendly Labour sources (eg Alistair Campbell) to help them put the boot in. Brown’s press is so bad because for the first time in a decade, his flaws matter. There’s a resurgent opposition with a real chance of winning next time (though I still am not convinced). And Labour MPs can read the polls.
I still think that, if I had to stake my life savings on it, I’d say Brown will be Prime Minister after the next election, but then again Major staggered home in 1992, and look what good it did the Tories. Most Tories I know believe losing that election would have been the best thing that could have happened for them. Just saying.
They may not be experiencing any sense of crisis, Mr Eugenides, but what they want to feel secure about is that should one arise, should their improved living standards (if we measure that purely in econimic terms) come under threat, be it from terrorism, world events, or whatever, they have someone in 10 Downing Street who knows what is going on, not someone whose experience in government was cowering behind Norman Lamont when the flak was being fired. That’s all. (oh, and I take your point entirely about Major and 1992)
Yes, much of the current sniping is coming from within our own camp and some of what the Tories are up to is mere mischief making. What remains to be seen is how much of that is simply a result of Blair’s protracted departure sucking all of the air out of the room.
Whether that carries on after Brown takes the helm, assuming he does, is a very different matter. There may still be a few rumblings from the Blairites and maybe even a defection or two – Frank Field can piss off and join the Tories now as far as I’m concerned – but then if the Tories wanted to ensure that we close ranks and take the fight to them after Blair’s departure then they couldn’t have made a better move than giving Cameron the leadership.
Cameron’s both a bona-fide toff and a virtual clone of Blair – an absolutely perfect target for everyone on our side who’s dying to take out their frustration with Blair on someone without damaging our own chances.
The personal jibes at Brown are fairly inconsequential. Your side will call him a Stalinist much as we used to call Thatcher a fascist – and most ordinary people will just see that as the kind of stuff that any strong, decisive leader has to put up with. Brown will play to his background – good solid Presbytarian stock – and many will see that as a positive thing, a reliable hand at the tiller.
The last budget has been desperately misunderstood but in the long run will, I suspect, turn out to be a bit of a masterpiece.
Yes, parts of the press did try to play up the ‘smoke and mirrors’ aspects of it, but not until after he’d got his tax cutting headlines in most the papers that matter.
In economic terms is was a zero sum budget.
A few young, single people will lose out due to the removal of the 10% band – but then they’re the demographic that’s least likely to vote anyway. Low income families lose nothing as long as the claim tax credits, middle income families get a few extra quid and the better off lose a bit but no so much as to make it that noticable – and they’re largely Tories anyway.
In political terms, it was a real piece of work, one that sets up a lovingly constructed elephant trap for Osborne.
It like this.
If Brown does go to the country early – April/May 2008 then not only will the impact of the tax changes not have filter through fully because he also has the option of a pre-election give-away to sweeten things even more, and having removed the 10% band he can do that simply by adjusting personal allowances, which always appears more prudent that shaving points off the rate.
If, instead, he stays the course into 2009/10, then he’s got at least two more budgets to find ways keep the electorate happy and, in any case, the electorate has a pretty short memory for detail when it comes to budgets – what most people will remember by then is the tax cut itself, not the shuffling around that was done to pay for it.
Osborne, on the other had, has been left with almost no room for manoeuvre on basic tax rates without running is serious problem trying to find a credible way of explain how he’s going to pay for them without screwing the voters the Tories need to win.
What Brown has done is the reverse of what Clarke did in 95/96.
Clarke set things up in such a way that it was impossible for Labour to promise increased expenditure on public services without having to admit that taxes would rise to pay for them.
Brown has arranged things so that Osborne has no way of promising tax cuts without admitting either that he’ll have to dismantle the tax credits system and screw over people on low to middle income and make major cuts in public services.
That’s what that budget was about – pinning the Tories into a corner on tax which they won’t be able to get out of with any credibility.
Everyone is ignoring John McDonnell because there is no chance of him winning. Simple.
Good points.I believe Cameron will eventually be seen as the Tories Neil Kinnock-minus the gravitas. He has built up a fairly reasonable opinion poll lead without actually doing anything at all, a classic mid term election dip for Labour has been enough up til now.As Kinnock found out in 1992 those voters can be very crafty when it comes to their jobs and mortgages.
I’m off to The Baths !!!!
You make a fair point Unity.
However, I’d just make a simple point: I think that in some ways -though only in some ways – the position is analogous to 1995. Labour was unable to go into the 1997 election promising big rises in spending. Instead, they pledged to stick to the Tories’ spending plans for 2 years, and had, also, to pledge no rise in base rate of income tax, etc. etc.
Thereafter, of course, what we’ve seen is (a) big rises in spending, and (b) rises in the tax burden for most sections of the electorate (I phrase it no stronger because this isn’t the argument I want to have).
I’m not saying that a Tory government will cut spending (though I wish it would) – but the position is roughly analogous; prove that we’re not quasi-fascist service-slashers, but try and make the case for rationalisation of spending, and ultimately a state which, if not smaller, is at least growing more slowly.
For a while, Labour managed to square the circle, because Brown was canny enough to raise taxes in ways which (a) didn’t hit ordinary people very hard and (b) were indirect – ie “stealthy”, to use the Tory jargon. But you can’t deny that this is a trick that’s been well and truly rumbled. So now, when a “revenue-neutral” budget is presented by GB as a “tax cut” for working families, no-one believes it.
I’m not sure I buy the elephant trap argument. I think Team Cameron understands very well that they can’t promise tax cuts – to the extent of alienating a *lot* of right-wing voters. They’re working from the Labour playbook – establish bona fides, and then move on your priorities once people trust you. It worked for Brown for nearly a decade. Frankly, if it worked for Osborne for half as long, it’ll be a triumph.
My my, a civil political debate, in stark contrast to all this well-poisoning pandemic that has apparently afflicted online discourse recently.
Mr E asked a question about what policies/reforms might be left in the proverbial hat, and why, after 10 years of New Labour, would they still be there. I think then answer lies in the fact that the architects of New Labour have long since fallen out, and co-operation between the different factions has decreased. On one level, it means that Brown’s conception of ‘New Labour’ is now sufficiently different from Blair’s. More insidious is the idea that even if their visions converge, policies and reforms that COULD be introduced under Blair, are being kept under wraps for political gain – either to hamper Blair in the short term, or help Brown in the long term by providing precisely the “new initiatives” required at the start of his premiership.
God forbid that tax policy could be framed around what is best for the country rather than what is best for the party. And I aim that at both Labour and Tories.
Thing is, this is exactly the kind of political jiggery pokery that turns people off politics. It turns me off politics, and I’ve been in it since birth near enough.
There’s always a flipside to the argument, though. El Gordo could claim (at the moment, quite legitimately I think) that Blair no longer has the political clout to drive a policy through. Better wait for a stronger Prime Minister, who can achive better, more longer lasting results with the same initial policy. Like soap powder, I guess.
Unity, good to see you back.
It has always baffled me as to why Brown isn’t categorised as a ‘Blairite’. OK they hate each other personally but how different are they politically?
How many times has Brown voted against the government?
How many speeches condeming Blair’s policies on eductaion, PFI, Iraq?
He is as New Labour as Blair and any Brown vs Blairite would merely continue the New Labour drift – that may be what the party wants but I would suggest a debate from the left would be more welcome.
As for his record, yes he has done some good things :-
Using the Bank of England for setting interest rates – but why is inflation the only target, of course it is important but what about exchange rates, the balance of trade (something never mentioned these days) etc all important figures that are affected by interest rates.
Spending on health, excellent to put money into the health service but the spending of it has not been wise (perhaps not his job but he should ensure money is well spent).
The elderly, his first budget clearly showed his attitude for pensioners with a few pence a week being given. The the raid on pension funds to ensure those with private pensions get a worse deal. The SIPs encouraging the waelthy to invest in buy to let as a pension provision – how does that help the young get onto the housing market? So he manages to clobber both the the young and old at the same time.
Education – how does the deal that those at university in hiis own constituency get compared to those in the UK? Ditto the elderly who need care – far better deal in his own back yard than in England.
Oh and tax credits – perhaps there is some good intentions but firstly they are over complicated so that many who should get them don’t and some who have had them have finished up in serious debt through changing circumstances. They are a con – their principle objective was to lower spending by reducing benefits and lowering taxation at the same time by providing credits.
Sorry Unity but IMHO GB is truely New Labour in the Blair fashion,
Blair without the charisma
These are not traits I associate with the True Labour wing of the party.
Sorry about the mistakes in the above post – brain faster than fingers and vice-versa
On the Brownite/Blairite its perhaps a reflection of the fact that Brown has deep roots in the party and Labour movement that Blair has never had.
Brown was also personally close to the late John Smith and one of the great unanswered questions about Brown is to what extent things might have different over the last 10 years had Brown become leader in 1994 and had the chance to continue Smith’s legacy.
You can argue that under Brown we may still have had ‘New Labour’ but it may have looked rather different in some crucial respects from the New Labour of Blair, Mandelson et al.
Not in terms of economic policy, almost certainly – Brown has operated within certain economic realities that were, and are, almost impossible to avoid. To understand that its probably best to read up on what happened to the Wilson government in 1964, which was elected on the basis of a demonstrably socialist manifesto and within days of taking office, told that it would be almost impossible to deliver because the City opposed it and would create economic chaos if Wilson went ahead.
Brown – sensibly in electoral terms – made his compromises long before the 1997 election and so avoid the dilemmas that Wilson faced.
As far as some of the specific polices you mention are concerned:
Controlling inflation – yes, there are other measures of economic health that one could take into account, but the ones that matter for business – which generates the wealth and, directly and indirectly, tax revenues – are low inflation and low interest rates. Its like the chimera of efficiency – there are many possible ways of measuring that but the one that dominates business culture is productivity, so that tends to dominate policy making.
Pensions – the situation is more complicated there than the anti-Brown rhetoric suggests and I’ll be interested to see exactly how he fights back on that one when he does (presumably) take over. Part of the counter argument will be to show where the money went (which will inevitably show that it funded investment in health and education) but equally you may find that a carefully-timed report may emerge that estimates the impact on pension funds of the payment holidays that many companies took while the stock markets were riding high – and when I say carefully timed, I mean times to coincide with the annual round of banks making humongous profits and huge city bonus payouts stories. People dislike paying tax, certainly, but what many dislike even more is the suggestion that their pension fund is rather lighter than it could and should be because some companies decided to fund their high-flyers new Aston-Martins rather than keep paying into the fund at their usual rate.
Health/Education – there are always arguments about whether the money could/should have been used more wisely and its always easy to snipe when thing appear to be going wrong. Its much more difficult, however, to come up with a convincing argument as to how you (meaning the Tories) would do a better job.
Tax Credit – actually the real structural problem isn’t with the tax credits themselves, they’re relatively simple to calculate, but in the construction of the tax system as a whole.
The problem is that although those on PAYE have their tax deducted monthly, those deductions are not fully reported to HMR&C until the end of the financial year, so the system itself is hopeless insensitive to changing/fluctuating circumstances.
The way the government collect taxes and tax information – a year in arrears – is hopelessly out of date and what’s actually needed is a move towards a ‘real time’ system in which at least the information on PAYE deductions are reported when the deductions are made. There is a strong argument for a massive investment in IT systems within the revenue system to enable ‘real time’ reporting of PAYE – most companies use computers to calculate their payroll monthly and what’s needed is a means by which that information is uploaded electronically to the Revenue at the end of payroll run so that real time adjustments can be made automatically to tax credit payments.
Its that or a move to a citizen’s basic income, which would dramatically simplify things.
Hi, thanks for your response.
Firstly I am most definately not a Tory, I am not a member of any political party but I sympathise with what may be termed Old Labour (or true Labour as I prefer to think of it).
Buisiness needs both stability and a competetive edge – our interest rates may be the same as the US but are significantly higher the the Euro zone. The exchange rate against the dollar significantly dents any competetive edge and is exacerbated by relatively high (and increasing) interest rates. As you said it is a complex formula but the Bank of England has only one target.
How would I do a better job regarding Health & Education? – well in the case of Health I’m sure that there could have been a far more sensible approach to GPs salaries which have cost millions, nor do I believe in the holy grail of IT systems –
Much of what you cite can be classed as products of the law on unintended consequences.
SIPs does distort the housing market, but then Thatcher’s deregulatory reforms distorted the welfare benefits system by taking away fair rent controls. Market rents encouraged more private letting but pushed up their cost and high unemployment at the time meant that much of brunt of that was felt in the benefits system in higher housing benefit payments and increase housing benefit fraud.
Education is another example of that law – that Scottish students don’t pay tuition fees is an unintended consequence of devolution.
Take health – GP contracts is a recent issue but a more important and structural problem is the massive increase in management and administration costs in the NHS as a proportion of total expenditure since 1979. The Tories quasi-market reforms were supposed to make the NHS more efficient but in reality ‘market forces’ had to be artificially induced and sustained by bureacratic means due to the lack of a real market. The unintended consequence was a doubling of the amount the NHS spends on its bureaucratic functions – it was 5-6% during the 1970’s, now its can be anything up to 15% of total spend.
The removal of the 10p tax band hits relatively few people in the short term – due to the tax credits system only single people on low incomes lose out, however in the long term it may prove to be a good thing. It simplifies the tax system, which could lead to cost savings on administration, and it creates greater scope for tax cuts by making adjustments to personal allowances rather than the headline tax rate. Adjustments to allowances are actually a more progressive method of cutting taxes for people on low incomes than lowering the tax rate because they have a greater impact on marginal tax rates (i.e. tax as a proportion of income).
Trident is, indeed, the wrong choice in purely military terms but, like Iraq, not one from which much political capital can be made by the Tories – they can’t really slate Labour for doing what they would also have done had they been in the same position. In fact IDS’s stance on Iraq – he told the Commons during the ‘war debate’ that WMDs were irrelevant and that he was backing the US purely because it was in the national interest, effectively kills any chance of the Tory’s playing that card at the next election – the most they can hope for is that the LDs play it and take enough votes from Labour incumbents to swing things in their favour.
How would things have looked different under Brown? I think in terms of social policy there would have been clear differences – you wouldn’t find Brown citing Hobbes as authority for a package of ASBO’s and social engineering for one thing.
The current government’s clearest move to the right has been in terms of Home Office policy and its that that I think Brown would have reigned in, however probably the best answer to your question is wait and see. If and when Brown becomes leader, he will move quickly to stamp his own mark on policy and that should suggest where we might have been but for the Blair years.
Regarding Iraq, my concern isn’t that the Tories either can (or can’t) make political capital out of it, my concern is for the 100,000’s dead and millions displaced.
Had Brown been a worthwhile leader he would have spoken up and working with Robin Cook he could have stopped it.