The bizarre battle over fifty pence

For an insight into how lame the debate about the economic crisis has become, look no further than the soulless tussle over Britain’s 50p tax rate. On one side, wealthy individuals call for the 50p tax rate to be lowered, fantasising that this will help invite more foreign investment into the UK and ‘stimulate growth’. On the other side, left-leaning commentators insist with gusto that the 50p tax rate be kept in place, or hiked up, on the basis that it helps to make society fairer by having the rich fund public services. On neither side is there so much as an ounce of political insight, far less principle.

The 50p tax rate was introduced in 2009 by then New Labour chancellor, Alastair Darling. It applies to the wealthy, around 310,000 people, who must pay 50p on each pound they earn above £150,000 per year. It’s become a point of controversy over the past week, following the publication of a letter in the Financial Times in which 20 business experts complained that the rate gives the UK ‘one of the highest personal tax regimes in the industrialised world’. Making it clear that they’re not doing anything so dodgy as defending their own interests – a big no-no in this day and age – the letter-writers insist their only concern is that the rate makes Britain ‘less competitive internationally and less attractive as a destination for both foreign investment and talented workers’.

Yet the idea that lowering the tax rate for the rich might help ease recessionary trends by inviting investors and stimulating growth is absurd. Reading some of the anti-50p lobby’s articles you could be forgiven for thinking that this tax alone is the barrier to resolving Britain’s economic malaise and remaking this nation as fruitful and future-orientated. One supportive editorial declares that, ‘At a time when the government is anxious to demonstrate its commitment to growth, lower taxes for wealth creators are especially important’. One of the letter-signing anti-50p martyrs claims ‘the 50p tax puts a drag on economic growth’. Apparently it ‘sends the wrong signals to the aspirational’ and ‘adversely affects entrepreneurialism’.

Here, the absence of any real lust for growth in Britain, the stunning dearth of any old-world bourgeois pioneering spirit and entrepreneurial spark, is blamed on a new tax rate which was only introduced by Darling two years ago. Which immediately raises the question of why the capitalist class was not rushing to risk-take and invest and create wealth prior to the introduction of this apparently awesomely oppressive tax rate. In laying the blame for the lack of economic dynamism at the door of the 50p tax, the experts and their well-off cheerleaders are partaking in a major, and majorly embarrassing, displacement activity: they’re pecking furiously at a tax they don’t like while ignoring the massive ideological barriers standing in the way of economic growth, the mainstream disdain for the ideas of expansion and creation and wealth itself.

The anti-50p lobby would have us believe both that its class of people is packed with entrepreneurial spirits and that Britain is newly committed to economic growth – but apparently the marriage of these two forces, the coming together of wealth creators with a country keen on wealth creation, is being hampered by the 50p tax rate. This is a spectacular delusion. Neither of these propositions is true. It isn’t true that the capitalist class has spunk or vision and is itching to create and grow. On the contrary, today’s capitalists are alarmingly risk-averse creatures, preferring to make money from old rope (or from new financial assets) rather than to invest in new or potentially dynamic or physical economic arenas. Marx’s praise for the early capitalists – ‘they accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts and Gothic cathedrals’ – could never be said about today’s ‘wealth creators’. Also, while David Cameron and Co. might pay lip service to the idea of economic growth, Britain remains a sluggish, low-horizoned entity, where a commitment to the Ten Commandments of health-and-safety or ‘saving the planet’ or NIMBYism always, without fail, trumps daring initiative and investment.

Pointing the finger of outrage at the 50p tax rate deflects attention from the far bigger blocks to growth today, from the fact that in mainstream political circles, throughout academia, even within the capitalist class itself, there is a serious aversion to the virtues of growing the economy and society. ‘Growth’ has become a dirty word, more likely to be linked to rising levels of mental illness (‘affluenza’), social inequality, planetary destruction and rioting, rather than to anything like a future ‘land of milk and honey’. It’s hard to avoid the conclusion that the myopic anti-50p campaign is a defence of self-interest disguised as handwringing concern for the creation of new wealth. One would be more inclined to respect these plush campaigners if they were more upfront: ‘Lower it in order that we can continue living really nice lives.’

Yet if anything, the other side in this debate, those arguing that the 50p tax rate must be preserved, is even worse. If there’s anything more ridiculous than an anti-50p martyr it’s a pro-50p warrior. These largely left-leaning commentators and activists would have us believe that any reduction in the tax rate will plunge Britain into further economic mayhem. It would threaten our ability to maintain public services and would send a really bad message to the public. One trade-union official says any cut in the 50p tax rate would be a ‘handout for the wealthiest’ – and ‘at a time when cuts are biting hard and ordinary people are suffering the biggest squeeze on their living standards in years, the last thing we need is a handout to the wealthiest in our society’.

The pro-50p campaign, which enjoys far more cultural validation than the anti-50p lot, which only seems to be supported by the Daily Telegraph and Nigel Lawson, captures how irretrievably low the left’s ambitions have fallen. Once, the focus of the left was on the creation of more – more things, homes, wealth. ‘Socialism means plenty for all’, said Sylvia Pankhurst, it means ‘a great production’. Today, left-wing activists’ one-eyed focus on tax – where if they aren’t fighting tooth and nail to keep the 50p rate then they’re occupying Topshop in order to get permatanned bogeyman Philip Green to stump up his taxes – suggests they now see wealth as a fixed thing, an ultimately unchangeable entity, which can only be shifted here and there. Their blind faith in the redistribution of wealth speaks to their profound loss of faith in the creation of new wealth, of more stuff, of plenty and then some. Patronisingly, they increasingly look upon the little people not as the potential overturners of social conditions and the pursuers of a ‘great production’, but as the passive recipients of the crumbs from the table of the amount of wealth that already exists and apparently cannot be expanded upon.

The pro-50p and other leftish tax campaigns reveal how stuck, how lacking in transformative vision, the modern left is. They seem incapable of imagining not just another economic system or a different world, but even more growth and expansion in the system we currently live under. The fact is that the 50p tax rate on the rich makes not a jot of difference to the living standards of the poor. Indeed, playing about with tax rarely has any historic social impact. As Marx argued: ‘No modification of the form of taxation can produce any important change in the relations of labour and capital.’ But then, it is left campaigners’ abandonment of the goal of changing society, or even creating more, their turn away from the little people, which leads them effectively to become the radical wing of Her Majesty’s Revenue & Customs, always demanding the payment of taxes to the state.

The bizarre battle over 50 pence is a load of symbolics. Incapable of explaining its class’s deadened spirit, modern-day ‘wealth creators’ instead rail against the tax rate as the great, entrepreneurial-squishing evil of our age. And incapable of thinking or fighting their way to a better world, left campaigners turn the 50p tax rate into a profound symbol of fairness that they must rally around. It is a taxing spectacle for those of us who still favour growth and change.

Brendan O’Neill is editor of spiked. Visit his personal website here.