Daily Archives: 17 August 2007

London politics in primary colours?

I find it fascinating that Tories appear to have leapt on this speculation that Labour might be attempting to rig the Conservative primary for London Mayor.

If it is true, then Labour is full of even more morons than I thought. You would have thought they learnt from their attempts to stitch up the Today programme Christmas poll in 1996. There is simply no way they could organise a mass entryist campaign without having to show their hand. There’d have to be a paper trail, an email trail… you know the drill.

And they’d have to be pretty sure they were able to get tens and tens of thousands of people to do it, each one willing to cough up £1.50. Ten thousand Labour supporters registering would make the Conservative Party £15k, and Labour would probably need more than that to assail Boris. Just how much cash is Labour planning to plough into the Tories’ coffers in the name of a dodgy stitch up that might not even work anyway?

In fact, Labour would have to be beyond stupid to try such a thing, notwithstanding the actions of a few mavericks (I note that this particular maverick is one “John Harris” – presumably the journalist who is at best semi-detached from the Labour Party). I simply can’t believe it.

Scratch beneath the surface though, and what are the underlying messages of this story? Firstly, Labour is terrified of Boris Johnson and want to avoid a fair fight at all costs. Secondly, the Conservatives are running a primary that any Londoner can take part in. Thirdly, all the other candidates in the primary are no hopers. In short, all the messages in this story are unequivocally good news for the Tories, and Boris Johnson in particular.

And of course, accusations about grand conspiracies of which there is no evidence whatsoever for is something that at least one Conservative MP seems to specialise in (I could of course mention Lord Rothermere and the Elder Protocols of Zion at this point and talk about ignoble Tory traditions, but I suspect that would upset some sensitive souls).

Two final points: I’m glad to see that the primary is being run by the Electoral Reform Society, so either way the reform movement makes a buck out of this. Secondly, if you have a vote, Vote Ewok. You know it makes sense.

Those Redwood tax cuts – a question of priorities

I’ve been going down the list of tax cuts that John Redwood is proposing. Scrapping inheritance tax, lowering corporation tax, raising the super tax threshold, restricting capital gains… to be brutally honest, I regard all of these as good things in principle, but even leaving aside the affordability issue, how can they be said to be priorities?

Inheritance tax, for example, certainly does hit a lot of middle-income families these days. But what would you prefer? A tax cut on your estate when you die, or a tax cut on your income now? I know that I for one would prefer the latter. Happily, I’d also argue it is better for both the economy and society more generally.

As I’ve argued before, the accretion of wealth within an ever declining number of families is not a particularly healthy thing for our society. It creates a situation whereby, because of historical accident, some individuals end up higher up on the ladder than others. If that wealth is bound up in property, it is a finite resource and our existing financial system creates a situation whereby the more property you own, the easier it is to acquire more. As it is a finite resource, that means that, over time, private ownership becomes nothing more than a dream for more and more people and an underclass emerges.

To a certain extent you might argue that is inevitable, but if anything ought to be a candidate for taxation, it is this. Indeed, the creation of IHT and other fiscal tools in the last century have done much to create a more egalitarian society which we now seem to be slowly slipping away from.

IHT’s biggest problem is that it doesn’t do this terribly well. Nothing a half-competent financial adviser can’t wriggle around any way. There are better ways of taxing wealth such as a land value tax. Needless to say, this isn’t top of Redwood’s wish list.

For me, the “Competitive Challenge” is to ensure that the fruits of people’s labours and entrepreneurship are kept by the individual to as great an extent as possible. IHT doesn’t make our economy uncompetitive; income tax does. The point at which the 40p rate for income tax kicks in isn’t the main issue: the 20p rate and the level of personal allowance are. And then, of course, there’s VAT (which Tories historically seem to love).

But if I don’t understand the economic case for Redwood’s priorities, I understand the political case even less.

It’s a gift to the Lib Dems: not only are our policies better targeted at people at the lower end of the scale (I’d go further, but that’s another issue), we explain how we will pay for it. Redwood’s case, by contrast, is tax cuts for the relatively well off, paid for by vague, amorphous cuts in ‘red tape’. I for one would relish that particular fight.