Oneupmanship and hypocrisy

I listened to last week's Week in Westminster today on the way into work and heard Peter Lilley say something very interesting.

No, really.

It was during a debate with Labour's Patricia Hollis where she was suggesting that David Cameron was mistaken to have ring-fenced benefits for pensioners in the way that he did before the election. Lilley pointed out quite rightly that Cameron ended up doing this as a result of a large amount of pressure applied by Labour who accused him of planning to reduce pensioner age benefits and demanded that he rule it out. Now they are saying he should not have ruled it out. Hollis at this point spluttered incredulously that Cameron should be strong enough to make his own decisions on policy.

They are both right. Lilley is spot on in his description of what happened and is correct to highlight the hypocrisy. Labour might not be in office but Conservative policy was not made in a vacuum before the previous election. Cameron was indeed responding to Labour attacks. I think he should not have ruled out pensioner benefit cuts but you can understand why he did. Older people vote in much higher numbers than younger people and with Labour unwilling to allow a sensible debate about it and instead running scare stories about what the "evil Tories" were planning for your granny Cameron's response was predictable.

I'm singling out Labour here but all parties do this. The Tories probably prevented Labour from getting a majority in 1992 by running "Tax Bombshell" scare stories. The repercussions of that were felt all through the New Labour years with Blair always refusing to raise income tax (which is partly why our economy is in the mess it is now with so much investment on the never-never). He bore the scars on his back of that election campaign. And I know my own party are not beyond a bit (or even a lot) of opportunistic positioning when it suits, some of which has bitten us hard on the arse now we're in government. I hope we have learned lessons.

But sadly as a whole the political class tends to learn the wrong lessons. If we want genuine and lasting reform of things like pensions, the welfare state, the NHS, schools and all sorts of other areas we need better than hypocritical posturing.

Sadly I don't think we're going to get sensible debates on any of these issues. Our political system seems to actively militate against it. Maybe it's the inbuilt adversarial nature of it. Maybe it's just too damn easy (as Labour has done for the last two and half years and the Lib Dems used to be famous for) to just oppose everything a government does and claim it would be much better under you.

It of course leads to mass disillusionment eventually but hey, at least we got one over on the other lot eh?

1992 "Tax bombshell" scars go deep for Labour and Conservatives

As Stephen Glenn pointed out yesterday, both Labour and the Conservatives are apparently thinking about raising VAT to 20% after the election in order to help try to reduce the budget deficit. There was a quote in The Times saying:

Though Labour and the Tories have denied having any current plans to increase VAT, neither will rule it out and The Times understands a rise in the tax is being considered by both parties.

The problem with VAT rises is that they do not spread the pain evenly. They disproportionately affect people on lower incomes because it effectively increases the amount of tax they pay overall as a proportion of their income far more than on more wealthy people. However the tax is not as visible as income tax. People do not see it directly taken out of their salary and hence if it goes up, they will not be able to compare last month's pay slip with this month's and see the extra amount the government is taking. They don't feel it as keenly even though it still affects them. That is why governments raise these indirect taxes, because it is politically less painful to do so.

But to understand why income tax rises are considered to be so politically poisonous we have to go back to the 1992 general election campaign. During that campaign, the Conservatives ran this poster campaign based on their calculations of what the Labour manifesto and the promised income tax rises would mean for the average family:

The poster was widely credited with having had a big impact on the result. Some, including Tony Blair even think that it was Labour's tax promises and the very effective way that the Tories highlighted them that directly led to them losing that election. The scars of that loss run very deep within the Labour Party and it was these that led to Blair's iron conviction to do everything he possibly could to avoid raising income tax rates. The line has been softened slightly under Brown with the pledge to introduce a 50% rate of tax for those earning over £100,000 but this only affects a very small number of people. The idea of raising income tax rates for many is still considered politically suicidal by most senior politicians in the two largest parties.

So the result of this toxic legacy is that instead of going for the fairest and most transparent tax rises which would be solely based on ability to pay, they are instead thinking about the best way to sneak them in through the back door.

Nobody likes tax rises. Indeed I wish we were not in a position where we were having to contemplate them but hardly anybody thinks we can get through the next few years without them in some form. So given that, the least any prospective government can do is to pledge to introduce them in the most equitable and transparent way possible.

H/T to Conservative Home for the image used above