Polling earlier this year showed that the traditional working class are deserting Labour and voting Conservative. This appears to have given Labour a bit of jitters. Losses to Labour in their heartlands like Bolton and Wigan are the tangible evidence. My own campaigning in their coalfield strongholds where it was once deep red immovable Labour wards are now marginals.
As if to regain what they see as their demographic at the Unite Policy Conference earlier this year, Jeremy Corbyn took to the stage to talk about Labour ‘Being back as the voice of the working class’, conceding in one soundbite that Labour was indeed losing the workers’ vote.
Could it be that the considerable electoral might of the UK workers has found Jeremy out? He is on record as saying that it is the big corporations and the rich need to fear a Labour Government. Surely this would appeal to the worker? This was almost a clarion call at the 2017 General Election. But the ‘rich’ certainly won’t be in fear and there isn’t a worker in the land who wouldn’t say no at having a go at being better off.
What really irks the worker isn’t the mere presence of rich people but the ability for the biggest corporations, who have resources to more than match any civil service department, to mitigate the increased costs brought to them by a socialist Labour Government. Those that need to be in genuine fear of a Corbyn led Labour Government are the workers they claim to represent. Polling of the workers’ vote shows that they understand this and are deserting Corbyn. This core demographic is the necessity of any election victory. Workers on average wages, workers who work hard every day to make ends meet, workers simply cannot afford a Labour government.
Defining ‘the rich’ in last year’s General Election, the Shadow Chancellor, John McDonell, indicated that the rich will be those earning £70,000 or more a year. This is a good salary for anyone but it’s not a fat cat wage. £70,000 is the local school head teacher, the police superintendent and your own GP. What the ordinary workers need to fear is that this is only the starting point. A shallow minded and lazy tax and spend policy, so beloved of all previous Labour Governments, can only go so far. Previous Labour Governments have punitively targeted tax hikes to their definition of ‘the rich’ to cover their spending plans only to discover that two things happen.
Firstly, the higher rate tax base is tiny and dwarfed by the basic rate tax base. There is little to be gained and everything to lose by targeting a small section of society. The last time Labour attempted to tax their way out of economic crisis in 2008/09 they brought forward a tax rate of 45% for higher earners and increased it to 50%, they wanted to raise £2.5bn from this, but those being taxed changed their behaviour, such as bringing forward income, so it was paid before the new rate came into effect, this reduced the tax intake so much that it actually reduced the overall tax take for these higher earners by £1.8bn. (budget2012/excheq-income-tax-2042.pdf)
The long-term effect will always be speculative as when the Conservatives returned to power in coalition the 50% rate was reduced back to 45%. Labour attacked this move ferociously however it resulted in a tax revenue increase of £8bn. These basic economics a Labour government don’t understand. Had Labour remained in power, and based on their previous form, they would have increased the tax rate ever higher. We know this because that’s exactly what they did in the 1970’s. On gaining power in 1974 the top rate was hiked up to a stifling 83%.
This brings me on to the second consequence and one that all reasonable hard working low and average earners need to know and the narrative that needs to be hammered home. Even the most economically incompetent Labour Government can be made to understand that there is only so much to be extracted from higher earners before they are incentivised enough to up sticks and take their money away from taxation. Whether this is by fair means or foul the result is the same, less tax paid into the exchequer, less cash for public services.
Denis Healey always denied saying he’ll “Squeeze the rich until the pips squeak” but the this is certainly how he behaved. After failing to raise enough tax revenue from higher earners, the Labour Government targeted the lower paid ordinary workers. With a far larger tax base they increased the 30% basic tax on the lowest earners to 33% and didn’t stop there, they targeted the lower paid again with an eye watering 35%. No matter how loud the rhetoric about going after the corporations, the rich, the elite; Labour Governments always attack the very people they purport to represent. Even in recent history the last Labour Government attacked the very lowest earners by scrapping the lowest rate of 10%.
The ones to fear most of all from a Corbyn Labour Government are hard working low and average workers, and this is the message that needs to be pressed home, to every home, over and over and over again. To win any election the workers’ vote has always been absolutely essential, the narrative needs to be captured. Low and average workers cannot afford a Labour Government.