Ed Miliband has just started his economy speech in Bedford, so as he gets underway, here’s a quick thought on his plan to reintroduce the 10p tax band. Doing this steals a march on a brewing Conservative campaign. Robert Halfon has been pushing over the past couple of months for the restoration of the 10p tax band to help those on low incomes. He’s badged it the ‘Great Gordon Brown Repeal Bill’, and David Cameron set some pulses racing yesterday at PMQs when he told Yvonne Fovargue that ‘we will not forget the abolition of the 10p tax rate that clobbered every hard-working person in the country’.
But on yesterday’s Newsnight Jon Cruddas also dropped a hint that Labour could bring back the rate, and Miliband will shortly confirm this in his speech. It’s not just Tory MPs who won’t forget that move by Gordon Brown: Labour MPs were also in uproar over its abolition.
Now, there are plenty on the right who don’t think restoring this rate is a good idea: it adds even more complexity to the tax system. They favour raising the personal allowance further. But the problem for the Conservatives is that the Lib Dems have largely managed to claim ownership of the personal allowance rises because it was their manifesto pledge. Thus the 10p tax is a better political weapon for the Tories.
Halfon’s campaign isn’t aimed at this year’s Budget, but the hope would be that it could appear in the party’s manifesto or a Budget closer to the 2015 election. But by pledging to restore the rate, Miliband isn’t just making a break with his party’s past, but also irritating the Conservatives. His speeches often leave listeners wondering what they’ve learned that’s new: this one looks like it’s going to be a great deal more memorable than that.
UPDATE, 11.25: One killer line, though, in this speech is this:
‘A One Nation Labour budget next month would lay the foundations for a recovery made by the many, not just a few at the top. Let me tell you about one crucial choice we would make, which is different from this government. We would tax houses worth over £2 million. And we would use the money to cut taxes for working people. We would put right a mistake made by Gordon Brown and the last Labour government.’
Those words in bold suggest that this could well be another ‘for now’ policy, while at least Halfon is looking forward to the future, not just writing his own fantasy Budget.
P.S. As well as the detail of these ideas being different, Miliband took a different view of the change back in 2008. He said:
‘When you make a big set of changes in the tax system, some people do lose out. That is a matter of regret. Of course it is. But overall these changes make the tax system fairer.’