Wednesday, 26 November 2014

50p or not 50p? That is the question

Murphy: I'll have half of that thanks
Tax is in the air.

George Osborne's autumn statement is just around the corner, and born-again devolutionist Jim Murphy is suddenly in favour of Holyrood controlling income tax.

Murphy is equally enthusiastic about restoring the 50p top rate of income tax for those earning £150,000 and above, thereby reversing the cut to 45p made by Osborne in April last year.

The chatter about the 50p rate reminded me of a protracted exchange I had with Nicola Sturgeon on the subject during the referendum campaign.

It was probably the stickiest moment in an interview for the Sunday Herald, with the future First Minister repeatedly ducking questions on whether to bring back the 50p rate.

Here's the transcript from the first week of September

Sunday Herald: Do you not want a more progressive tax system?

Nicola Sturgeon: Parties will take decisions in budgets about taxation. What I want to do is see a situation where we are lifting people at the bottom, being able to determine what the minimum wage is, being able to determine what I hope and lift the minimum wage to the level of the minimum wage, childcare. Being in charge of both sides of your balance sheet so that socially progressive policies -

SH: You’re not talking about both sides, just spending-

NS: -socially progressive policies that you invest in have a positive impact on the other side of your balance sheet. We have a debate in this country about taxation that assumes the only way you can increase a government’s tax take is to raise the rates of tax that people pay. That’s not the only way. You increase a government’s tax take if you get more folk in work paying tax, if you get more folk in work earning more and paying more tax. It doesn’t happen instantaneously, but that’s what you’ve got the ability to do if you are in control.

SH: But there’s an argument about fairness, that says those who earn most should pay more

NS: If we’d have been in control we wouldn’t have reduced the 50p top rate of tax

SH: Would you reintroduce it as Labour would?

NS: I know why people want answers but...

SH: If you can give a commitment on [a 3p cut in] corporation tax why can’t you make one on income tax?

NS: We’ve set out our position on income tax. That decision will be taken on prevailing circumstances

SH: And the corporation tax decision?

NS: Corporation tax is a deliberately targeted policy to try to create more jobs through having more companies based in Scotland. On income tax, if there was an SNP government in an independent Scotland setting that first budget, if the circumstances were the same as they are now, we wouldn’t have reduced the 50p top rate of tax

SH: But would you have a 50p top rate of tax?

NS: I’m not going to set income tax rates for 2016 sitting in September 2014

SH: Do you think it’s a good idea for fairness?

NS: Right now we wouldn’t have voted, we didn’t vote, to reduce it. So, then, right now, we think there should still be a 50p top rate of tax

SH: There will still be people earning over 150 grand in 2016. Do you think they ought to pay 50p on their income tax?

NS: You set income tax rates based on the judgments you take about your budget when you set those budgets. I’m not going to sit here..

SH: You also take a judgment on whether those people ought to pay more. Would they deserve to pay more?

NS: I’m not going to.. You can spend the rest of the interview..

SH: You talk about social justice but you won’t..
Sturgeon: I'll tell you when I'm ready

NS: You can spend the rest of this interview if you want asking me to tell you what an SNP government’s budget would be in an independent Scotland in 2016

SH: No, I’m asking you about one rate of one tax

NS: I’m giving you an answer. If I was making that decision right now there would be a 50p top rate of tax. I’m not going to tell you what the decision will be two years from now because that decision will be taken based on the prevailing circumstances. If we were in that position right now of making that decision then there would still be a 50p top rate of tax, because we think that would be correction the circumstances that we’re in just now.

SH: But the same basic question still exists in 2016 - should the rich pay more?

NS: There will be a whole variety of circumstances by the time we’re setting that first budget

SH: That’s a fundamental question for taxation. Should the rich people pay more money?

NS: I believe in progressive taxation. I believe that people should pay according to their means. But the specific rates of tax will be decided in budgets. I’m telling you now that if that decision was ours to make right now what that decision would be.

Sunday, 2 November 2014

Blair Transplant

The Sunday Herald carries a piece today about the extraordinary number of Better Together personnel now working for Jim Murphy in the Scottish Labour leadership contest.

Murphy's campaign launch in Edinburgh yesterday felt like a Blythswood Square re-union, with Alistair Darling leading the applause in the audience, and a throng of former Better Together press officers running errands and liaising with the media.

Blair McDougall's new Twitter picture
Blair McDougall, Better Together's former campaign director and Murphy's old friend, pictured left, even booked the venue.

McDougall, whose employment contract with Better Together ran to the end of the year, has also left the organisation early to help run Murphy's campaign.

One of those concerned says it's simple enough - lots of BT staffers admire Murphy because of the shift he put in during the referendum with his 100 towns in 100 days tour (which was a Better Together rather than a Labour event), and now want to return the favour and help.

But others in the party smell a rat.

Some of those close to fallen leader Johann Lamont reckon Better Together morphed into a leadership vehicle for Murphy a long time ago, and that McDougall and others blatantly promoted the East Renfrewshire MP with an eye to replacing Lamont.

If that's true, it would be the kind of classic New Labour stitch-up that Murphy has been acused of ever since he helped run the notorious Network that picked 'acceptable' Labour candidates in the 1990s.

An associated rumour is that McDougall's reward is to be the post of Scottish Labour general secretary, the party's most powerful official, and a real power behind the throne.

Jim Murphy launches his leadership campaign
So in the press huddle after his launch speech, I asked Murphy who he wanted as general secretary.

A simple enough question, you'd think, given Murphy has stressed that under him there would be no repeat of the sacking of the Scottish general secretary by London, the event which precipitated Lamont's stormy resignation.

Murphy has also emphasised that he'll be doing the hiring and firing.

Yet for a simple question, it yielded a very odd and evasive answer, the kind of answer that usually means a raw nerve has been touched.

You'd almost think McDougall's job had already been neatly stitched up alongside Jim's.

But, then, that would be a very New Labour thing to do, and Jim says those misleading labels are all in the past, so I must be mistaken.

Here's the transcript of the exchange so you can judge for yourself (spot the Freudian slip):

Sunday Herald: Who’s your pick for gen sec?

Jim Murphy: You make it sound like a football team. [Turning to other reporters] Who’s next? I don’t know who the candidates are, mate.

SH: Well Blair McDougall is at a loose end...

JM: Is he? Mmm. Ok. You’re quite fixated by him. It’s quite unnatural. Have you got pictures of him all over your room?

SH: Blair McDougall for general secretary, is that credible?

JM: I’m not getting involved in all that, mate. Now you’re going to write...

SH: You told everybody that you were going to be doing the hiring and firing. So is he going to be a hire for general secretary?

JM: I’m not the Scottish Labour Party leader yet. If I win... if I’m fortunate enough to win this contest, I’ll make those decisions, ok?

SH: Would you like him to be general secretary?

JM: Oh my gosh. I mean, is this my first day in politics that I fall for that sort of question, Tom? It’s not your first day in journalism, so you ought to come up with a better question than that.