The perils of tax populism

This post was written by Guest Post on March 3, 2013
Posted Under: Economy,Labour,Tories

This is a guest post by JT White

The cause of raining in corporate tax swindlers was once the monopoly of UK Uncut in its Vodafone protestations. Now it has been coopted by the political class, firstly by that shirker Ed Miliband and then by George Osbourne that dangerous radical who went to St. Paul’s. Unfortunately, for Ed Miliband the language of ‘responsible’ capitalism is hardly anything radical and can be, demonstrably, filched by the less than scrupulous Tories. There was a time when talk of ‘responsible’ capitalism would have been a compromise too far for the Establishment Left. Even Andrew Neil thought it proper to point this out to Rowenna Davis. It looks like triangulation from the Right. Tax reform will be a bit of prog bait for the Coalition to wag at us (along with gay marriage) at the next election. Of course, the oik at the Treasury is just a poseur when it comes to serious tax reform.

We can debate what this tells us about the Chancellor and the way his mind works. For quite some time the question was whether Osbourne knew what he was doing. There was no theory and the oik had no formal education in economics. The whole aim of deficit reduction seemed to revolve around the prospect of re-election in 2015, incidentally the Coalition are failing by their measures in that department. It is possible that the Coalition have pushed the austerity measures to the limit and have decided to slow down just in time for the General Election. So we find it is either a case of idiocy or wanton cynicism. If the Treasury are going to patch together a minor tax reform then it is more about appearances than content. This would mean that the Chancellor, or at least his advisors, are aware of the problem of tax evasion and avoidance. It is plausibly about the coming electoral battle. The Conservatives are painfully aware that they have not won a majority in over 20 years.

Miliband has made his move, a bet on mansion tax. For a long time it looked like Ed Miliband was struggling to find the formula. The New Labour token of the ‘hard-working majority’ to the Blue Labour waffle about a ‘squeezed middle’. Well, first it was Blue Labour, then there was this brief gust about ‘predistribution’, and then, finally, settling on One Nation Labour pilfered from the One Nation Conservatism of Disraeli. Each instance can be seen as another attempt at triangulation. All the while Ed hasn’t promised us anything concrete, on the meritorious grounds that he doesn’t want to lie to us. And who could disagree with that? Just picture it, the Labour slogan at the next election: Don’t Expect Much! The success of Blairism was its lies, the Prime Minister was a conman and many of us wanted to be conned. That’s why so many liberals lapped up the drivel about WMD. Now little Ed has to appear to have found the formula even if he hasn’t.

The trouble with the current Miliband (surely, the better of the two) is that he remains a creature of the End of History proclaimed by Fukuyama. The fall of the Berlin Wall and triumph of liberal capitalism signaled the end of the old politics of class. We had finally gotten past all of that. The new mission would be the Third Way, not even social democracy, more like a neoliberalism with a human face. Much like soft pornography this ‘soft-core’ capitalism promises everything except the penetration shots. Endless economic Progress without the harsh social costs. This is why Miliband still seems to be stuck in the spirit of the 1990s. Most of his leadership has been characterised by meandering around labels and the need for a new triangulation. First you nick planks from the opposing platform with the hope of bagging the votes and money that will follow it. Then you test the water to tune the policies perfectly to the ears of the votes you have yet to win.

All of this falls back on the assumption that the traditional working-class base can be relied upon to turn out and cast an automatic vote for Labour MPs. All the while the liberal commentariat are kept on board with the lesser evil allure of the platform. Notice that when the Bradford byelection disrupted the natural order you had liberal journalists lining up to slime George Galloway. Sadly, it seems more likely that Labour could lose its seats to the populism of right-wing demagogues from parties like UKIP. No wonder Miliband bungled efforts to pander to anti-immigrant sentiment in the days when he was still testing the water. After so many botched attempts at populist appeals Miliband has chosen redistribution over predistribution. When in doubt turn leftwards. It reminds one of when Gordon Brown tried to squeeze back into those tight socialist trousers of yesteryear and started to bark at the market ‘fundamentalism’ he had bought and sold for over a decade.

The Labour Party has yet to change much with the better Miliband at the helm. Like Brown and, indeed, Blair, Ed Miliband buys the fundamental lie that the primary goal of any government, whether short-term or long-term, ought to be deficit reduction above all else. Tax reform is certainly compatible, if not more effective, to that end given the deficit is more to do with revenue than expenditure. It could well be the common ground fought over at the next election. If the Coalition are serious about deficit reduction they will be much more interested in taxation. Up to now cuts have been a useful means to the continued transformation of the welfare state and public services. If the goals of tax justice can be coopted then it may be time to reposition ourselves and make more radical demands. It is not enough to simply try to preserve the remnants of social democracy.

 

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