There never did seem such a terrible row as that generated by Ed Balls declaration that he would raise the tax on higher earners to 50p. The so called captains of industry were howling that this would kill off growth, industry would stay away from the UK and all the good talent would leave. Twenty-four of them even wrote a letter to the Telegraph to protest, gosh is this the capitalist equivalent of manning the barricades. Clearly the policy has some traction if it’s likely to hit them where it hurts, in their pockets.
There never seems to be enough for this group. Over the last three decades the UK’s top 1% has moved from taking 6% to 14% of national income. That is more than twice as much. While others have seen their pay packets fall.
There is a growing gap between rich and poor, the top fifth takes 60% of income, the bottom fifth a hundred times less. The moves by Ed Ball hardly address the issue.
People want much more than he’s offering. Polls over the weekend indicate that that a clear majority including Tories support raising tax on the richest. It would seem that Miliband and Balls are again moving with the grain of the country and it’s the government tit would seems that have been wrong footed and seen as out of touch with the majority of voters.
Superficially the recent news on the economy would seem to support the government that times they are achanging for the better. But Miliband is right the economy isn’t working for ordinary people. Low wages are widespread, the inequality gap is widening, business investment is low and the country’s exports are weak. Not good news at all for the real economy.
The ‘good news’ about the economy is again based on a feel good factor based on house prices. It could all end in tiers as soon as the Bank of England raise interest rates, as they surely will to stop the housing bubble going wildly out of control.
The Chancellor was busy milking the good news of last week’s jobs figures, and undoubtedly will do the same with today’s growth figures, which are the best since 2007.
But as the Chancellor crows enter stage left the Business Secretary, Vince Cable who rains on the Chancellor’s parade. It’s the wrong sort of economic recovery according to him. He highlighted weak exports and a hoarding of cash by businesses meant, “the shape of the recovery has not been all that we might have hoped for”. He issued a warning that the UK should avoid another damaging boom-bust in the housing market by building more homes. He even went further and said that he his party did not agree with Osborne on future cuts.
All in all a position a great deal closer to the shadow Chancellor than that of the Chancellor
What none of the parties will say is not only do we need to raise taxes on the better off, but a broad base of taxes need to go up if the country is to sustain the public services. With an ageing population there will be an increase strain on public services. No government can protect the NHS and expect other departments to take the strain. It does not add up.
To close the countries financial deficit is the declared policy of all the parties. It just won’t happen on cuts alone, taxes have to go up. But don’t expect any of them to be honest about it this side of the general election.