The week that Ed Miliband made his speech about being less photogenic than David Cameron, the Green Party announced a new economic policy: a wealth tax, affecting around 300,000 people, of 1-2%. This tax would only fall upon people with over £3m, making it difficult for those who oppose it to obfuscate with philosophical questions about who we can legitimately consider rich and thin ends of wedges and where do we draw lines. There may be a debate to be had about all of that, but whether you define ‘rich’ in terms of capacity to buy things, comparative living standards, whether you measure it by median wealth or by mean, it’s really beyond argument that £3m places you firmly in the ‘rich’ box.
The objective of policies like this is often not so much a matter of putting them into practice (I doubt the Greens are expecting to win a full parliamentary majority any time soon) but to flush out your opponents and lead them into a trap.
I’ve written before about why I’m not convinced that the 50p rate of tax is much of a solution to inequality, but if it was intended as a political trap for the Tories, as I suspect (cynically perhaps) that it was, then it worked beautifully. As soon as Miliband declared he would bring it back, the likes of Philip Blond were denouncing it as an attack on “average” hard-working families. They were either trying to spin the policy’s impact in a dishonest way, or they actually think £150,000 a year is an “average” income.
Similarly, the Green Party’s wealth tax may not make a huge difference to inequality either way (the rate of tax people are supposed to be paying is somewhat irrelevant if they don’t pay it) but it flushes out the worst logic against progressive taxation, and highlights the ridiculous extent to which it can be taken. We hear arguments that a wealth tax will disincentivise hard work. Because having £3m minus 1% is just peanuts, a totally demotivating low wage. Who would ever work for that, right? Never mind the fact that the second part of this argument is usually that these people have such high earnings in the first place because they have such a strong work ethic.
Around the time the Green Party was publishing its wealth tax proposal, former Labour leader Tony Blair was making jokes to the think tank Progress about the exact number of millions he is worth. That he believes the difference between £100m and £20m is significant enough to be worth correcting, that he thinks it’s funny to laugh, self-deprecatingly, at only having £20m, tells us a lot about the former Labour prime minister and the circles he moves in. Perhaps it also tells us something about the Labour Party; or rather, it reminds us of something about them. It reminds us of one reason why the British public grew slowly more and more sickened by the hypocritical smell of money sloshing around the same people who lectured us about morals and values and British citizenship every day of the week.
Labour has been rightly nervous about losing some of their more traditional Labour voters to Ukip, but they must not forget that the core of their strategy has been based on the presumption that the bulk of the disgruntled Lib Dems who turned to them in 2010 will stick with Labour into 2015. To get the majority they need, they are dependent on winning enough votes from those disgruntled Lib Dems to push them over the mark. That is a group of voters often mocked but not to be taken for granted, electorally speaking. These are people with strong values, who would often much rather vote for a small party that reflects those values, than vote tactically for the biggest party able to ‘keep the Tories out’. In other words, these are people who would very seriously consider voting Green in a general election.
The Labour Party needs to do more than just not be the Tories or the Lib Dems to secure those voters. Firstly, it needs to show it takes seriously human rights and civil liberties. These aren’t abstract philosophical concepts to be discussed over brandy on a rainy day to Lib Dems; they are central grounding principles which underpin everything else, from foreign affairs to welfare reforms, from policing to economics. Making Sadiq Khan shadow justice secretary is a good move but it may not be enough to win the trust of yellow voters, particularly given Labour’s pretty sour record on civil liberties.
Secondly, Lib-Dems-in-refuge and other potential Green voters will be looking for meaningful commitments on electoral and constitutional reform. Modernising the House of Lords is a policy area which sounds abstract and irrelevant to many, but is in fact essential to making any sort of real progress in all kinds of areas: education reform, welfare spending, and the right to die are all heavily influenced by the makeup of the upper house.
And thirdly – which is where the Green Party’s wealth tax comes in – former Lib Dem voters want to see fairer taxes, although not necessarily higher taxes. That’s something Nick Clegg likes saying because it sounds universally lovely yet it’s vague enough to mean more or less anything you want it to. But the sentiment underneath is actually an important point of principle for many Lib Dem voters. Many people don’t want taxes put up for the sake of it, but do want a modern tax system that reflects the disparity of wealth in the country, reflects wealth rather than income, and applies the same rationale for taxation to everyone.
Our tax system feels extremely outdated, with an entire scale of different bands up until £150,000 a year, and then from that point on, a flat rate of tax whether you earn £200,000, £1m or £50m. And that’s even if you ‘earn’ it in the way that Tony Blair is ‘worth’ £20m.
Just as the Tories managed to successfully tap into the lack of sympathy among people struggling to pay for a bigger mortgage towards council tenants with allegedly ‘spare’ bedrooms, and just as they managed to tap into the lack of sympathy for striking public sector workers among private sector workers with no pensions, the same populist attitude exists towards many left-wing policies. Politicians may very likely find that the majority of the public – be they unemployed or minimum wage workers, families earning £55,000 between them, and even many of those with twice that – will struggle to muster an enormous amount of sympathy for people whose wealth reaches into multiples of millions claiming they’re no longer motivated to bother working their hardest because they’ve been asked to pay an additional 1% in tax.
The Green Party might not be a huge electoral force, and they might not be all over the news in the way Ukip has been, but they could still win over enough ex-Lib Dems and disillusioned Labour voters to keep Labour from nailing down that nervously held together majority that they so keenly need to get back into power. Ed Miliband should spend less time making speeches about how he’s so much above the trivialities of politics, and get on with behaving like he’s a future progressive Labour prime minister, with a competent grasp on the severities of it.