Taxing times for Gordon Brown

If only George Clooney could come and visit every day. Shake hands, make some vague promises about Darfur, get your photo taken with the world’s sexiest man. Simple. But George’s visit yesterday was over almost before it began – a bit like Gordon Brown’s political honeymoon.

A year ago, Brown was the king in waiting. Tony Blair, the cause of all of Labour’s problems, would soon be gone – replaced by a steely man of principle who would reinvigorate the government. Brown took the opportunity of his last Budget as chancellor of the exchequer in March 2007 to stick the boot into the Conservative opposition. For so long, the Tories had been the party of lower taxes. Now, a Labour chancellor was cutting the basic rate of income tax to just 20 per cent. What a coup!

It was all just a PR stunt, though. The Gord giveth, and the Gord taketh away. To pay for the two per cent cut in the basic rate, Brown announced that he would scrap one of his own initiatives, the ‘starter rate’ of tax, charged at 10 per cent on the first £2000 or so of taxable income. The overall effect, to come into effect in April 2008, would be neutral. But while higher earners would benefit a little from this change, those on lower incomes would actually be a bit worse off – as much as a fiver a week. Almost no one minded – at least, not on the Labour benches. It made great headlines – and it seemed like a sensible simplification of the tax system. When a handful of MPs tried to amend the new arrangements, they were quietly ignored by their colleagues.

Twelve months on and the new rules have kicked in. Suddenly, everyone seems to mind. While the sums involved are small and probably wouldn’t cause consternation in rosier times, that extra five pounds a week is coming at a time of rising prices and gathering economic gloom. Fuel and food bills are up substantially. Suddenly, that ‘tax simplification’ has become a mean-spirited kick in the guts to just the kind of people who should be reliable Labour voters. John McFall, chairman of the Treasury Select Committee, said that such people seemed an ‘unreasonable target for raising additional tax revenues to fund the benefits of tax simplification and meeting the needs of children in poverty’.

What’s changed in twelve months? The angst over the tax change has little to do with the needs of lower-paid workers. In fact, petty party politics has been central both to the original decision to change the tax rules and the reaction against it. A year ago, Brown wanted a grand announcement that would mark him taking control while undermining the Tories – so the tax change was a good idea. But now Brown is floundering and a lot of Labour MPs are starting to get very edgy about the political outlook – and now that tax change sucks.

The Tories, long incapable of making any dent in Labour’s opinion poll ratings, are suddenly getting consistent leads. According to a ‘poll of polls’ in today’s Independent, Labour (30 per cent) is now wallowing some 11 points behind the Conservatives (41 per cent) – enough to provide the Tories with an overall majority in Parliament (1).

Where did it all go wrong?

Things started so well for Brown after he finally became Labour leader last June. There wasn’t an election, more a roadshow culminating in his coronation. Then there were a string of national emergencies – foot and mouth, floods, terrorist attacks – to allow him to look decisive as the national leader pulling it all together. Political commentators swooned, even if some noted that the ‘Brown revolution’ seemed to be a rather mealy-mouthed and cautious kind of insurrection. The Conservatives were terrified; there were rumours of leader David Cameron coming under pressure to resign because the party was getting nowhere in the polls. Even Cameron’s hand-picked by-election candidate turned out to be a Labour donor (see Ealing Southall: a comedy of errors, by Rob Lyons). So confident was Brown that by August he was allowing open speculation on an early election to ram home his advantage.

But then along came a ‘national crisis’ that wasn’t so easy to look good over: the collapse of mortgage lender Northern Rock. Things turned a bit messy; Brown suddenly didn’t look in control. But even then, the Labour party conference in late September was dominated by election fever. The Tories pulled together at their own conference a week later, announcing a relatively trivial plan to change the inheritance tax rules which played well in the press. Cameron managed to give a solid speech (without using an autocue!). Brown, too fearful of losing the premiership after only just getting it, bottled out. The ‘will he, won’t he’ speculation only served to sum him up all too well; far from being an honest and courageous politician, Brown was shown to be as much a political manipulator as his predecessor, but without even the redeeming feature of Blair’s dubious charm (see ‘Bottler Brown’ – the PM British politics deserves, by Mick Hume).

As Brown’s government has drifted on – generally towards the rocks – his party has been desperate for him to do something decisive, to reveal his ‘real’ beliefs about a range of issues. Former New Statesman editor John Kampfner summed it up in the Telegraph: ‘On any given day, in any newspaper or pamphlet, one can read a charge sheet against the prime minister from an ultra-Blairite alongside one from a member of the traditional Left. They are united only in one question: what does Brown stand for? What is really his view about ID cards? Extending pre-trial custody? Immigration? Cannabis? Embryology?’ (2)

The hole in the heart of New Labour

But what’s new? Trying to figure out what Brown actually believes in has been pretty much impossible since the day New Labour were elected back in 1997. Whenever controversy arose, Brown would run for cover faster than Dwain Chambers on steroids. This was a canny stance for a leader-in-waiting, making him a blank slate on to which anyone – politician or commentator – could project their wishes. But now he’s running the country, he actually needs to make some decisions and he is revealed to be politically rudderless.

In truth, Brown and Blair ditched politics the day they hatched a deal to take over the party back in 1994. Any semblance of a relationship with Labour’s working class roots was to be excised. Though Labour had been socialist in name only for decades, any symbols of a left-wing past had to be expunged, right through to changing the party’s name to ‘New’ Labour. Like Clinton in the US, Blair managed to pull off this trick to a considerable degree through his own personality.

Even when Blair was no longer loved, he was at least someone who could be blamed for the absence of political direction. After Iraq, the party simply used Blair as their scapegoat, focusing all their discontents on to him before finally kicking him up the arse and sending him scampering away from Downing Street. What is really troubling for Labour now is that the party is stuck with Brown until the next election. Suddenly, there’s no one else to blame. The hole in the heart of the ‘New Labour Project’ is all too clear to see.

What is worse for us all is that there is no vibrant opposition to move in. The Conservatives have been ditching principles of their own, left, right and centre ground. With the government in disarray, they should be out of sight in the opinion polls. Yet, one minor scandal or a little bit of good news for the government could wipe out their lead in a flash. New Liberal Democrat leader, Nick Clegg, has had more profile for his sexual history than his party’s policies.

Benjamin Franklin once noted that there are only two sure things in life: death and taxes. And the one sure thing about this tax debate is the death of politics.

Rob Lyons is deputy editor at spiked.

(1) Labour slumps to 11-point deficit after Budget, Independent, 9 April 2008

(2) Gordon Brown thinks – but what does he believe?, Daily Telegraph, 4 April 2008