Time was when Ed Miliband had plenty to say about François Hollande. When the new French President celebrated his victory in May, the Labour leader praised Hollande for his ‘determination to help create a Europe of growth and jobs, in a way that is responsible and sustainable’. He added:
‘This new leadership is sorely needed as Europe seeks to escape from austerity. And it matters to Britain.’
Then, Miliband was keen to work together with his new friend Hollande. Just a few months down the line, though, Labour has a bit less to say about how the French president is a shining example of the centre-left showing leadership and hope in Europe. First there was the noisy exodus of top earners from France ahead of the introduction of Hollande’s flagship 75 per cent tax. And then at the weekend France’s constitutional council rejected the tax. Ministers have indicated that it is unlikely they will produce an adjusted plan for the 75 per cent tax to comply with the council’s ruling before June or even September.
The problems that the row over the fairness of the tax and the ruling itself raise for Hollande are political more than they are fiscal. The ruling has galvanised the opposition UMP, with Gilles Carrez, head of the National Assembly’s finance commission calling for Hollande to drop the tax altogether. He said he hoped that after reflection the government would decide not to go back to a rate that was so ‘absurd’ it didn’t exist anywhere else in Europe. Worse still for a tax that was intended to symbolise Hollande’s insistence that the rich would bear the greatest burden of austerity, the ruling caused tensions in his own party, with one MP, Jean-Michel Clément tweeting that it was ‘a catastrophe for our image’, adding ‘are we competent?’ The tax is now less a symbol of ‘responsible and sustainable’ fiscal policy than it is a symbol of the government’s competence or otherwise.
Guido reports today that Jean Michel Jarre has had meetings in Downing Street about moving to London to escape the tax, and David Cameron and Boris Johnson have spoken repeatedly about rolling out a ‘red carpet’ for those high earners who also plan a move to the capital.
Oddly enough, Miliband has had precious little to say about his chum recently: it’s difficult to imagine the Labour leader jumping to roll out a red carpet to Hollande should he visit London in the near future.. The problem, as Priti Patel predicted on Coffee House a few months ago, is that the 75 per cent tax row in France reminds those in Westminster of the row over the 50p tax rate. It makes it a lot easier for the Tories to argue in favour of a competitive tax regime when France is so kindly offering a demonstration of what happens when taxes become political symbols.