With record levels of debt, this Government returns to raising taxes echoing the: “….Last scene of all, That ends this strange eventful history, Is second childishness and mere oblivion; Sans teeth, sans eyes, sans taste, sans everything.” (Shakespeare, “As You Like It”, Act II, Scene VII)
When you have to watch someone die, one of the most distressing things is the period that Shakespeare called a second childishness. As a patient enters the final stages, he may suddenly start speaking of mummy, babbling nursery rhymes or talking a foreign language that he forgot at the age of four. The patient may be suddenly rude, irrationally angry or jealous. It is as though all the decades of acquired behaviour and education are melting away, to reveal the juvenile instincts beneath.
That is the stage we have reached, alas, with this moribund Labour government. All the pretensions of the Blair years are vanishing before our eyes – all that lip-service they used to pay to the importance of enterprise; all that carefully confected obeisance that Tony taught them to make to capitalism.
As the Labour government undergoes its death agonies, we seem to be back in the 1970s, with uncontrollable debts, unemployment rising and the IMF waiting in the wings. After decades of restraint, there are joyful Labour MPs giving vent again to the infantile slogans that brought them into politics. Squeeze the rich. Squeeze them again. Then squeeze them until the pips squeak.
They came for 45p, and the world said nothing. Now they have come back for 50p, and we don’t really dare to protest, even though the true rate – once you have taken into account the loss of allowances – is a 61 per cent grab of the income of top earners. That is a flagrant breach not just of Labour’s manifesto commitment but also of the principle that the state should not pre-empt more than half of what you earn. Labour is going back to its class-war roots, and we don’t dare to protest because these are hard times, and it seems only fair that the rich should pay more to help us all out of it.
We don’t stick up for the bankers because we know that the bankers bear a heavy share of responsibility for the sub-prime crisis. This credit crunch wasn’t caused by the Spanish practices of idle shiftless workers. It was nothing to do with working to rule, closed shops and senseless demarcation disputes at British Leyland.
In the words of the Brazilian President Ignacio Lula da Silva, the world’s banking crisis was caused by white men with blue eyes, and there are millions of people around the world who are going to suffer poverty and unemployment because of the greed and folly of a small number of extravagantly remunerated bankers. How could anybody possibly sympathise with these monsters?
Yesterday a newspaper published the annual list of the 1,000 richest people in the country, and you would have needed a heart of stone not to laugh at the way they have collectively lost billions in wealth. We don’t protest at the 50p tax rate because we can’t bear to be seen to be on the side of rich folk these days; and yet we should protest, my friends, because this 1970s era tax is a serious economic error.
The richest 1,000 people in the country may have lost a fair slice of income; they may offload the loss-making restaurant or flog the grouse moor, and yet the tragic reality is that their lives – by comparison with the rest of us – will not be much affected either way. For the really rich people the effect of the 50p rate will be simply another challenge for their tax accountants. It is extremely doubtful that the revenue raised will be anything like as much as Alistair Darling claims, and in any case, the sum is trivial by comparison with the scale of the problem.
Whatever the other crimes of the bankers, they are certainly not responsible for the horrific state of the nation’s finances. It wasn’t the bankers who caused the £175 billion black hole, the one that our grandchildren will still be struggling to fill. It was the sensational mismanagement of the Labour government, watercannoning good money down the drain in times of plenty and failing to put anything by for the downturn.
It believed its own demented propaganda about ending boom and bust, and using hundreds of taxpayers’ billions in a ruthless and concerted attempt to expand the state sector – to the point where it amounts to about 70 per cent of the economy in a place such as Newcastle upon Tyne – and thereby to build up a huge and unbudgeable mass of people whose livelihoods depend upon the government and who are therefore more likely to vote Labour.
This government’s colossal deficit is the result of Gordon Brown’s decision to abandon prudence and to use the public purse to buy election victory. We will all pay the price, rich and poor, and if we attack the rich with punitive taxation we will simply end this country’s reputation as a place where enterprise and wealth creation are rewarded.
It is not just the financial services industry that will be hit by a 50 per cent rate, because London is not just a world leader in financial services. The UK capital leads the world in law, in medical science, in higher education, in advertising and in a huge spectrum of the creative and media industries.
This tax sends out a signal to any business leader thinking of coming here to set up a company that the climate is changing, and that if Labour remain in power it is likely to become positively inimical to effort and initiative.
Instead of launching this raid on the rich, the government should have taken the axe far more seriously to government waste; and the final reason why we should object to the 50 per cent tax rate is that if we keep schtum, they will simply do it again. Why not 55 per cent? Why not 60 per cent? Why don’t they go right the way back to their childhoods, and start echoing Denis Healey’s 83 per cent top rate of taxation? I never thought I’d say this, but last week I felt acutely the loss to politics of Tony Blair.
[First published in the Daily Telegraph on 26 April, 2009 under the heading, “This moribund Government has returned to its miserable youth.”]