I understand why Jeremy Hunt, the Chancellor, might want to keep tax cuts for later than his Autumn Statement in November – he needs room for electoral manoeuvre – but I don’t understand why he has to say so. By announcing what he won’t do, he merely helps Labour to get ahead of him. Even the Lib Dems say they are giving up on tax rises.
Mr Hunt is surely aware that Labour is now moving fast to be the party of tax moderation. In a move last month which was surprisingly little noticed, his Opposition shadow, Rachel Reeves, said that Labour would not raise the top rate of income tax from its current 45 per cent. Nor would it increase capital gains tax or impose new taxes on expensive houses.
In this, as in much else, Labour is replicating Tony Blair in the run-up to his 1997 landslide. Sir Tony, as he then wasn’t, knew that almost all British “opinion-formers” were top-rate taxpayers. Whatever they might say in public, they liked paying the relatively low 40 per cent which had come in under Margaret Thatcher (it had been more than 80 per cent before she took office) and Nigel Lawson. By promising them that they would not have to pay more under New Labour, he signalled he understood them. To an unprecedented extent, the elites, especially the media elites, went Labour.
One reason Gordon Brown led his party to defeat in the 2010 general election was that, in that year, his government had jacked up the top rate of income tax to 50 per cent. When George Osborne, the then Tory chancellor, brought it down to 45 per cent in 2012, Labour savaged him for his wickedness; but today the party is quite happy to leave the rate where he put it. The elites are quietly purring.
I wonder if Ms Reeves has thought of promising a lower top rate (the old 40 per cent, perhaps) than the Tories. It would be a smart move because Mr Hunt has talked his party out of being able to follow suit and would have no convincing means of attacking her.
Ms Reeves probably would not dare – the explosion of rage from the party’s natural supporters would be too great. But she could promise to raise significantly the threshold of the current intermediate (“higher”) rate of 40 per cent which starts at only a little over £50,000 a year and therefore catches more than 11 per cent of taxpayers. That would seriously embarrass the Tories.
So would a move on inheritance tax (IHT). As long ago as 2007, Mr Osborne killed Mr Brown’s snap election plans by promising at his party’s conference to raise the IHT threshold to £1 million. This announcement was so well received that Mr Brown ran away from the ballot box.
That Osborne promise was never, in fact, more than half fulfilled. Ms Reeves should seriously consider making it her own, or even, given inflation, going to £1.5 million. I honestly think that would deliver the coup de grace to Tory tax policy, and get Labour into 10 Downing Street.
A misguided obsession
BT is moving a lot of its jobs from rural districts to cities. According to its chief networks officer, Howard Watson, a “significant factor” in this move is to ensure that the company hits its diversity targets. One of the greatest job losses – 1,100 people – will be at Adastral Park at Martlesham Heath in Suffolk.
I have two questions, one for BT, one for Government.
For BT: how do these moves help BT customers? There are many millions of us, but we do not seem to enter into the company’s calculations. Alison Kirby, the chief executive, has £220,000 in bonus payments tied to diversity and inclusion targets. That is nice for her. But I repeat my question: how does it help BT customers?
For the Government: do you intend diversity policies to weaken rural employment? It is true that there are fewer ethnic minorities living in the countryside than in big cities, but that is not the fault of rural people.
It is surely the natural result of immigration patterns. New arrivals tend to go to cities because there are more jobs and housing there, as well as their own communities to help them settle and form families. Over time, people of immigrant origin fan out more widely. I notice this happening more in the rural south than 20 years ago. But if diversity targets drive companies into cities, this will only widen the ethnic gap between town and country – and, as so often, at the expense of the latter.
This problem spreads beyond business. One reason the National Trust appears to be trying to get around its foundational charitable aims is that it fears loss of official blessing if it does not find “new audiences”. It believes, on very thin evidence, that people whose families came or come from former British colonies are put off visiting historic British houses and gardens.
The much more obvious reason why National Trust ethnic-minority membership is quite small is that many of its properties are not located near places where many ethnic minorities live. This will gradually change. Its relatively slow pace is no cause for alarm, let alone for disrespecting the Trust’s own properties and their former owners.