Tuesday, October 17, 2006

Ed Balls Thinks I'm Stupid

It’s been a good year for political quotes, particularly my favourite kind, the ones that reveal a deeper meaning to the usual diet of spin and drivel. But with the conference season out of the way, it appears unlikely that my quote of the year award will be going anywhere other than the prohibitive favourite since February, everyone’s favourite Brownite lackey, Ed Balls MP, for this classic from Question Time;

“You can’t claim to be a progressive and simultaneously oppose tax credits”

Edward, (says he adopting the Noel Coward-esque condescending tone of voice at which he excels), I have a bachelor’s degree and will soon have a master’s degree from the University of Manchester, plus I’ve won University Challenge and am currently ranked British #45 competitive quizzer. And even if that weren’t true I would only need the intellect of a boiled cabbage to construct an argument that would allow me to claim to be a progressive and simultaneously oppose tax credits.

Posit; you’re in government and want to help parents in work avoid the benefit trap. What is the most direct way to do this? By reducing the tax burden on the lower end of incomes that is the primary cause of the poverty trap. To achieve this, you could raise the income tax threshold above minimum wage, increase the personal allowance for qualifying families, etc.

Which is all well and good, except that for New Labour the original question is wrong. Posit; you’re in government and want to help parents in work avoid the benefit trap in the most visible way possible. You could raise the income tax threshold or the personal allowance, but that only gets you a few stories in one news cycle. If, however, you institute a system where people get their tax repaid to them, every working parent in the country gets a cheque every month that is subconsciously signed G.Brown.

Now there’s nothing inherently wrong with that, except that it does require the government in question to be able, say, to recognise a well-run IT contract when it whacks them in the face. Suffice to say, if there’s one thing New Labour know how to cock up, it’s IT contracts. What we have instead is a vicious system that ruins the lives of families across the country every single day.

My point is, this is exactly the sort of thing we need to be whacking Labour on every day; not only is it cynical vote-grubbing of the very worst order, but we just happen to have passed a policy that would do what tax credits do without destroying lives. When we are the best, most progressive option and can prove it, we should be shouting it from the rooftops. And I can guarantee that the parliamentarian who has the gumption to stand up and do it will be the next leader of this party.

1 comment:

Anonymous said...

Tax credits are a bad idea full-stop. Even if a government managed to run the system effectively they disincentivise work.

You work and make more money you can end up worse off because your tax credits are stopped.

Of course, there's the whole pointlessness of taxing people, spending some of that money on the beaurocracy of collecting the tax, then spending more of it giving some of it back.

I still marvel at the fact that nobody on 'the left' is willing to look at Milton Friedman's ideas for negative income taxes as a means to redistribute wealth and provide for the poorest. It can be integrated easiliy into the income tax regime, doesn't have the negative consequences of a minimum wage (which acts as a tax) and incentivises work. He does tie it in with a flat tax, but I'd assume there'd also be a land tax as well.