Fair points, but how do you get involved in rebuilding Labour without getting involved in Labour?

In my own little rock of a heart, I support the notion of a Labour party – just not this Labour party, or the one we had in New Zealand in the end (until last year), or any that has abandoned the labour base it was supposed to represent.

I’d rather eat my own sick out of a gumboot than be part of any effort to rescue Brown’s Labour party, but would be interested in the notion of working up a party that represented labour. Thing is, how do we do that? Technology could play a part, I guess. Getting out and talking to people about building a party that would represent them would play a bigger, better part – the problem being that people are so disillusioned with the notion of parties that purport to represent the working man that they’d probably release the hounds on you.

Don’t think the campaign to build a workers’ party has got very far thus far. I should go to a few of their meetings and see how they’re coming along. They’ve been going for a few years now, though, and I don’t believe they’ve had much electoral success yet.

“New Labour was borne out of the view that it was dogma that kept them out of power. So they jettison that and became sufficiently vacuous and pragmatic enough to keep the electorate on side as long as the Tories could continue to be sufficiently demonised.”

Alas, the dogma was the whole point. We need it back.

In reality new labour was and is parasitic upon ‘dogmatic old labour’. It was only because old labour had gained for the party an entrenched loyalty within certain core constituencies, that new labour was able to whore itself out to the right and to middle England while retaining a decent working class vote. Unfortunately for parasites, they eventually kill the organism upon which they feed.

John McDonnell and Jon Cruddas both make a point telling us that Labour shifted right knowing full well that the centre-left would have no choice but to tag along – knowing full well that the party has been hijacked by careerists, and not the other way around. But this is simply not the case. To save myself from repeating I will link an article I have written on this very same subject, and the very worst that could happen as a consequence of Labour taking the centre-left for granted.

Yes, there are far-left groups (SWP, IMT, CPGB, etc etc) but they remain obsessed with – even to the point of encouraging – in-fighting, and they often use Trotskyite methods as a way of ignoring current trends in day-to-day politics. But the obvious real threat, to parts of society that once relied on the left within the Labour party, is the stirring up methods of the far-right. Its the re-acknowlegdement of this area that makes the need for a leftwards shift pivotal. And I’d prefer it to start before a defeat. The 5-6 years shift as purported by Sunny may seem realistic, but the party has the innovation, its just obfuscated by blind obedience and kop-out rebellion (often, not always!).

As for technology; centre-left nanobots?

Totally agree with Reuben @3

The obsession with wooing centre and centre-right voters only worked because the country was coming from 18 tired years of Tory administrations which inevitably left the Conservatives in disarray and lots of people felt like a physiological change anyway.

In 1997 even a Labour Party led by a donkey (well, actually, thats what it was, wasn it) would have won.

But from that point on, its electoral landslides were only made possible by their core voters, the same people that Tony Blair would smack in the face and slag off at any opportunity only because of the Conservative bogeyman. In the meantime he started a rearguard battle that destroyed Labour’s core principles one after the other.

Note how Labour voters slumped significantly in 2005 when larger sections of “core voters” started deserting the party.

What I find baffling is the fact that many New Labourites still don’t realise that there are millions (and I mean millions) of Britons who don’t feel represented by anybody in Westminster.

At times the LibDem came closer especially during Charles Kennedy, but there are millions who don’t want further privatisations, who are dismayed at what happened today with National Express doing one, who objects to PPP, who abhor a government taken hostage by ‘non-doms’, tax avoiders and the City.

Blair always acted as if he was from Jonestown: the messiah who knew best regardless, was on a hot line to God and was on a mission. But just talk to ordinary workrs and you’ll be gobsmacked by the amount of people he put off, who’d say “I used to vote Labour”, “I was a Labour voter” etc…Millions. Are they all idiots? Simpletons? People who can’t spot NL’s ‘grand design?’

“or any that has abandoned the labour base it was supposed to represent.”

Labour’s traditional base has been shrinking for years due to a decline in manufacturing and an increase in white-collar jobs.

At times the LibDem came closer especially during Charles Kennedy, but there are millions who don’t want further privatisations, who are dismayed at what happened today with National Express doing one, who objects to PPP, who abhor a government taken hostage by ‘non-doms’, tax avoiders and the City.

Goodness, Claude – you seem to be suggesting that the Lib Dems have not consistently opposed pointless and taxpayer-costly privatisations, don’t want to stem the rising tide of NHS selling-off or post office closures, or have not repeatedly expressed firm policy commitments to close loopholes in the tax code for non-doms and the extremely wealthy…

“Right now it makes no sense, thinking long-term here, for a die-hard Labourite to support this administration. It makes more sense to let it die and then figure out how to influence the next one. ”

I see your point here…but it’s worth bearing in mind Polly Toynbee’s point: that there’s a world of difference between Labour losing the next election, and Labour being battered in a Tory landslide.

Tory government will be terrible – absolutely terrible – for the poor in our society during a recession. The weaker the opposition, the more terrible the Tories can be.

Whilst I sympathise with your desire to see this administration die, I’m wary of what the even worse lot can get up to if that death is slow, protracted and extreme.

Sorry, are you saying that a government that spends half of national output is in some way not left-wing enough for you?

What a petrifying thought. Where does your desire to control peoples’ lives end??

#9,

You might find that a government being left-wing depends on *what* it is spending the money on, as well as how much it is spending….

Matt

Sorry – how is bailing out bankers and spending billions on killing Iraqis left-wing…? This government may have spent half what we’ve earned, I don’t think a lot of it has gone on left wing causes.

Decent piece, Sunny, boiling down to the fact that the rightists still control New lab, who in turn still have a stranglehold on the party :that this has meant haemorrhaging members, losing union backing at long-bloody-lasts, and general unpopularity doesn’t seem to worry the entryist careerist spivs anything like as much as the prospect of losing power. That’s the problem: you might adjust things to make yourself more electable, but gaining power should only be a means to the end of creating a fairer society. Newlab saw and still see power itself (inc. personal power and advancement) as the be-all-and-end-all.
Measures like ID cards (and worse the database state behind them), the restrictions on free speech and protest, the dreadful Welfare bill, the woeful incompetence allied to unwarranted arrogance, the warmongering, etc etc. This lot are Tories, forget the nomenclature and look at their deeds.
In reply to Kate upthread, surely the best prospect is for an annihilation of Labour (i.e. New labour) at the next election, or else these Tories with red rosettes will continue their unwanted occupation of the party. They are the shits in the body politic which need a purgative. Only when they are gone, and it might be painful or unpleasant in the short-term can we be comfortable and function properly. At the moment we have a Tory party in power and one in opposition. Realistically in the medium term the best we can hope for is a Tory party in power and a leftist party in Opposition.

Forgive me, all the left-wing press kept calling for more public spending during the good times becuase we could afford it, and then more in the bad times because we needed it (even though if you do that you are meant to spend less in the good times.)

There was me thinking there was a large-scale desire just to increase public spending come what may.

However, it’s good to have things clarified. So spending cuts might not actually be evil then?

Spot on, Alisdair. Think they need a total hiding myself, in order to have some time in opposition to get it together and try and re-engage with the constituency that they have lost. Unfortunately, it’s going to take a lot of work and they haven’t got the people or the funds to do it. CLPS are shells if they’re even that.

The grassroots has disengaged completely – I spend most of my time in trade union circles, if we can call them that, and people there are vehement about their hatred of Labour and their sense of betrayal. I think five years for a rebuild is a bit optimistic myself, but perhaps the Tories will help them inadvertently by being too vicious for the electorate to tolerate. Tories on the ground in places like Hammersmith and Fulham and Barnet tell us all we need to know about that party’s real intentions.

Depends what you’re cutting, James. If you’re rationalising the moats and duck houses, yeah, fine. Cut away. If you’re throwing wardens out of sheltered housing blocks to save a handful of change and to enact an ideology, then maybe not.

#11 – loving it., Defence is 5% of public spending, but in some mystical way more significant than the other 95%.

Still, it’s a good point about lot’s of public spending not meeting left-wing goals. Transport subsidies famously benefit the middle class. In fact, come to think of it, I believe Julian Le Grand showed that health spending disproportionately supports the middle class.

Perhaps the real progressive cause is tax and spending cuts?

#14 – Ah, I had forgotten about your wardens. I believe that this change is happening all over the country?But you are singleling out one example of Tory cuts? Ignoring that Labour is already doing it.

Are you Gordon Brown? Hmmm, no, you seem too articulate.

I wouldn’t have a problem with cutting taxes – especially of the lowest paid.

I’d also increase it on the top end (the public support is there) and increase Inheritance Tax.

and then more in the bad times because we needed it (even though if you do that you are meant to spend less in the good times.)

James, you really are naive if you think the Tories would have let their banker friends die in an orgy of bankruptcies.

I’d also increase it on the top end (the public support is there) and increase Inheritance Tax.

Genuine question – would you still do this if it didn’t raise any more money? I’m sure you’ll disagree with the IFS’s projections for the 50p rate, but is this hiked rate purely about raising revenue, or is it about a sort of ‘fairness’?

Well that’s a non-sequitur to what I posted, but no, I believe a Conservative government instigating such a banking bailout seems most unlikely. Bondholders should have lost out and the banks run off in a manner such as exists for insurance companies.

Who knows at the end of the day, although your case is based on an ad hominem attack with conspiracy theory lite overtones. The fact is of course that Victor Blank et al were Gordon’s friends.

It’s us or the Tories.
True – but only true because New Labour reneged on the promise of voting reform.

What utter wankers asking for our support now – never.

In 2010 New Labour will be (thank God) utterly destroyed by a massive Tory landslide of Commons First Past the Post seats, yet the Tories will probably only get around 40% of the popular vote.

The Rally for a Change on 9 July, 6.30pm at Methodist Central Hall Westminster is the only chance we’ve got – in the electoral arena anyway – and I hope as many people as possible go along. http://www.voteforachange.co.uk/

I believe a Conservative government instigating such a banking bailout seems most unlikely

I wish I could agree with you, but they would have done the same thing.

James,

Never forget about my wardens.

You’re absolutely right to say that Labour has been guilty of equivalent funding fuckwittery around the nation – tis entirely the point I was making when I referred above to the government’s pissing away of major funds on antisocial projects. Labour ain’t much better than the Tories on the ground – we’re on the same page there. That seems to be Sunny’s original point as well.

Like Sunny’s idea of a taxing the rich. So does much of the population – think I remember reading that recently…

Yr right about me being too articulate to be Gordon. Then again – who isn’t?

Three things concern me about the tories

1) It will take at least one term for them to root out the politically correct thought police and nu labour aparachnics that have infested the public services, and until they are gone little real progress can be made.

2) They will be insufficently libertarian and and won’t take the radical reforming meaures needed to repair the enormous damage caused to welfare, tax, health, education and criminal justice systems

3) They will lack the bottle to reduce taxes on the middle classes and implement the consequent necessary reduction in public spending. 10% will barely get rid of the non jobs listed at 1) and the massive government spend on “advertising”

2010 will be quite a moment for me – the first time in my life I will vote tory.

I’d prefer to eat Kate’s sick out of a boot than vote for Gordon.

A right-wing government with a right-wing oposition is the worst of all worlds. Labour need time out of government to reconnect with the working class, and rediscover civil liberties.

All this debate about “taxes on the rich” amuses me – under the arch socialist redistributor Maggie Thatcher, the highest rate of income tax was higher than it’s ever been under nulabour.

Genuine question – would you still do this if it didn’t raise any more money? I’m sure you’ll disagree with the IFS’s projections for the 50p rate, but is this hiked rate purely about raising revenue, or is it about a sort of ‘fairness’?

If the Laffer curve didn’t exist, the rich would have to invent it in order to perpetuate the notion that they shouldn’t pay their share (in a proportion of how much income they earn) of taxes. You should me the bare facts and I might even buy into the view that a 50p tax rise has no impact. Until then, lame theories don’t do it for me.

Still do what ? The laffer curve is bollocks.

Here’s some heads, in some sand.

Tax rate 0 – revenue 0
Tax rate 100% – revenue 0

Somewhere In between – optimum level.

The laffer curve is a statement of logic, the only question is where we are on it.

As the rich paid a far higher proportion of the total tax take in the 90s than in the 70s I am not sure what “theory” has to do with it.

It makes more sense to let it die and then figure out how to influence the next one. The question then is, how can technology play a part in that in that.

It is? I would have thought the question would be how do they keep it serving their interests while remaining electable. Not which Blackberry they should carry or social networking site they should visit…

Here’s some heads, in some sand.

Tax rate 0 – revenue 0
Tax rate 100% – revenue 0

Do I really have to teach some basic economics around here? Tax revenue at 100% would only be zero if it was a flat tax. As we live under progressive taxation, even if the upper limit was 100% then tax revenue would not be 0.
I was under the mistaken impression that right-wingers focused much more on real life than graphs that were made for first year uni economics students with a million things assumed ceteris paribus. Clearly not.

Leon, when I mean technology I was thinking more broader than that, and in a different context, not merely saying MPs should start Twittering.

Let Labour die.

That’s all I have to say on this issue.

Sunny, you seem to have a little problem with logic. Or meaningful debate

Any tax, on anything, if levelled at 100% would soon lead to revenue 0.
Obviously, the other taxes, levelled on other aspects of income, wouldn’t be. That’s what I said.

You seem to be easily confused. Thankfully Gove’s school revolution is going to deliver a better educated generation in the future,

James – the laffer curve is discredited as a tool for predicting where that optimal point is – the concept, which is common sense, is not in question.

The curve was drawn by said economist on a resuarant napkin after a boozy dinner btw

Its not all the laffer curve, its what you do with it that matters. Its my understanding that 100% tax rate in itself meant no will to make money, but if the government used that tax revenue to meet the individual needs – and a little bit more – then the incentive to increase tax revenues comes from the government providing the necessities without the need of consumer networks. A bit like in the Big Brother house, where tasks are not rewarded with money, but food. So the inmates generate the capital – for Channel 4 – in order to receive their necessities. 100% tax rate produces no incentive to generate tax revenues only if it stops there, but if it is rewarded with necessities, this is the incentive.

Obviously 100% tax rate is inexcusable, but surely my illustration points out that increasing taxation does not necessarily mean an end to incentives to generate what can be translated into revenues. Or is this all bollocks?

If Labour want to be in power they need to persuade the self employed they they offer a better quality of life than the Tories. Many self employed consider that Labour is only interested increasing the number of white collar and middle class people working for the state and the Tories are only interested in those working in the City of London. This is neither left or right wing, bit plain common sense. As DS Ping said ” it does not matter whether a cat is black or tabby , provided it catches mice”. Ping realised the job of the state as not to hinder the drive of the individual. Ping supported the farmers who took back their land and farmed it , increasing food yields by 300%.

If Labour supported what worked they would obtain the the votes who have to undertake practical work- builders, shop keepers, publicans, hoteliers, garages owners etc, etc. Instead , many writers on this blog want to offer a watered down Trotskyism to the self employed/SMEs and wonder why they vote for the Tories. If Labour want to win votes then they need to have MPs who can earn peoples respect and this means having a worthwhile career before entering politics .

“So at this stage it makes more sense for Labour sympathisers to gear up for the General Election in 5-6 years time and figure out what are the big arguments the party needs to make and the coalitions it needs to build…Right now it makes no sense, thinking long-term here, for a die-hard Labourite to support this administration. It makes more sense to let it die and then figure out how to influence the next one.”

There are some people who comment and contribute to this site who want nothing to do with Labour, and that’s fair enough – Labour needs to change to appeal to people on the liberal left. There need to be positive reasons why it is worth getting involved in Labour, rather than talking about nose pegs, or emotional blackmail about the evils of the Tories.

But for Sunny and any others who want to have their say about what Labour does after the next election, my advice, tactically, is to do everything in your power to help between now and next May (or whenever). There’s plenty of good Labour MPs who share our values and would obviously and clearly be better than their Tory challengers.

If you want to persuade the Labour Party to change after 2010, then being prepared to help now in the hour of need is going to be much more persuasive in the long term than sitting out this election writing these kind of articles and then turning up and expecting to get people to support the changes that you’d like to see.

Hi James, my point still stands. We don’t have a flat tax system so the 100% top end is meaningless. I agree, some optimal points needs to be found. But we’re not at the stage yet where raising taxes reduces income and furthermore the laffer curve in its simple form doesn’t work here. So there’s little point in citing it. And until there is evidence that tax revenues have fallen due to higher taxes, I can’t really answer the point.
I find most free market capitalists bring up the laffer curve as a way to protect the interests of the very rich, without actually citing facts. I would prefer an economy where the govt gets out of the way for the people at the bottom end of the income scale, and worry less about threats to emigrate to Monaco at the top end.

@James

You are quite correct to point out that the Laffer curve as a logical construct is valid – it stands to reason that additional tax revenue at a 0% marginal rate and a 100% marginal rate of tax will both be zero.

However, the Laffer Curve logic loses it’s way in the next step.

An argument that runs:

* The marginal tax rate that maximises tax revenue will be between 0% and 100%
* Therefore it must be lower than what we have

does not convince.

If the higher rate of income tax was 20%, the ‘Laffer Curve’ argument would, I’m sure, still be harnessed.

The IFS analysis you cite basically says “we do not know what the tax-maximising marginal rate is” but that “it is around 45%-55% on the top rate, providing we make a lot of assumptions which we know are quite shaky”.

And in my mind there are questions as to whether income tax rates should be chosen to maximise tax revenue – redistribution and fairness can be valuable goals in and of themselves.

Apologies James – Tim J was the one mentioning the IFS

I read Younge’s article, and thought it was a pretty good analysis of the mess the centre-left is in. In short: the next election will be a choice between the bad (New Labour) and the worse (Tories), if only because both parties are still in thrall to the economic model and ideology of the last 30 or so years – all that’s left is the current tedious argument about how to spend/what to cut. As for New Labour, an old Scottish saying comes to mind: ‘If you prefer sheep to men, let sheep defend you’ . If New Labour really think that the bankers, Murdoch/Dacre and the Middle England swing voters are more important than everyone else, then get them to do the work of getting New Labour a fourth term: the emotional blackmail of ‘it’s either us or the Tories’ has played itself out. It’s not that centre-left voters will switch to the Tories, more that they won’t be prepared to save New Labour from itself yet again since it’s clear they cannot get the government to change by voting for it, and so they’ll sit out the next election.

surely the best prospect is for an annihilation of Labour (i.e. New labour) at the next election, or else these Tories with red rosettes will continue their unwanted occupation of the party

THAT I have to agree with 100%. Ad nauseum I repeat that, I too, was a Labour man, 100% never say die, Labour man – yet I am not a Tory, nor ever will be a Tory. In 97 I didn’t realise I had voted for a Tory government – yet that changed quickly enough.

The “New” Labour project has to be smashed to complete smithereens! And that could mean a massive win for the Conservatives. We all know that having Dave as leader and PM will be real disaster for the UK people, not so much he friends in the city and business – but especially the poor and working people.

But this is a war – and I don’t use that lightly – it is a war that will have to have collateral damage. If the British people are to get government that works for them – then they have to do it for themselves and see what devastation Conservative governance brings.

Labour people should stay well away from New Labour and let it be beaten to death – then – once that corps is ashes – Labour, real Labour people should make their move and bring about a Labour party that will govern for the people.

Sunny

Largely reflecting Dan @38

I think you need to think through the implementation of the policy towards Labour that you are proposing, or at least define what you mean by ‘die-hard Labourite’, in a ‘get real’ kind of way.

While it may be ok for the ‘commentariat’ to refuse to support Labour while it’s losing and thne come back with lots of guidance on how it can do better next time and expect to be listened to (readership turnover helps, as does not having to bother what the readership thinks of you), it’s not the same for the non-commnetariat.

For Labour activists up and down the country, announcing that you no longer support Labour and going off to work for the Libdems, or even ‘voting with their feet’ and not turning up to leaflet/canvass for anyone, is by and large the end of the road. There’ a common saying, at least round my way, ‘You’re a long time dead’, and if as a Labour activist you are seen to do the dirty on your comrades/colleagues/friends, then that’s your Labour party death.

“But this is a war – and I don’t use that lightly – it is a war that will have to have collateral damage.If the British people are to get government that works for them – then they have to do it for themselves and see what devastation Conservative governance brings.”

Just to point out that last time we tried this, we ended up with Maggie Thatcher and John Major in the UK (and then Tony Blair as well), and Ronald Reagan and a pair of George Bushs in America. I would therefore humbly suggest that being prepared to make working class people “collateral damage” in a “war” to win control of the Labour Party for our faction is a really, really bad idea.

The Labour Party died when it became impossible for Barbara Castle to implement ” In place of strife”. From the early 70s , the Labour Party became largely controlled by failed Trotskyists. The craftsmen and foremen , the NCOs of industry voted for Thatcher ( and in the USA voted for Reagan ). Industries with large employment have greatly reduced their numbers or gone bust. Instead there are large numbers of self employed and thos running SMEs . The idea of a hard working craftsman paying 40% tax on income over £40k( plus national insurance payments) is somehow taxing the rich is utterly absurd. For many in the construction industry , the years of fat are needed to survive the years of lean. In the recession of the early 90s highly experienced bricklayers were travelling 1.5-2 hrs a day to earn £60.

Those who run small businesses have invariably worked extremely hard for their money , yet those middle class, often government employed labour types are happy to squeeze every last penny of tax out of them. Now wonder Labour is in danger of losing the next election.

Most politiics today apears to be based on people looking after their own selfish interests. The New Labour project is based on appealling to the selfish interests of swing voters, with a healthy dash of spin to try to cover up the situations where those interests clash. (Thus PFI, and its accompanying spin, to try to appeal to those who want to improve public services without offending those who want lower taxes.)

Except that we liberal-left Guardianistas are expected to think about everyone’s interests except our own. No sooner do we express an opinion than there is someone berating us for not thinking about the interests of somebody else. If we say that we want traffic to be reduced in our city centres, there’s someone along in less than a minute to berate us for not thinking about the aspiring working-class who want to own cars. It seems that we are expected to be gibbering wrecks on election day thinking about how our vote is going to have an impact on the lives of various other groups of people (while other groups are openly bribed with tax cuts or pork-barrel projects).

As a thinking person I expcet political parties to talk sense to mne, I expect them to be able to answer my questions. I expcet them to be able to set out the logic of their programme. New Labour doesn’t do that: it is all dog-whistles and spin, so I’m not going to vote for them. It’s quite simple really.

I’m with Paul Sagar @8

Pissed off with the New Labour lot I may be, but I am genuinely terrified of how much damage 5 years of Tory government would do.

I’m even more terrified if the Keynesianist policy starts to show results by next year and the Dacre/Murdoch press claim it’s Smiley Dave’s genius that led to recovery – we’d be looking at 10 years plus then…

“Except that we liberal-left Guardianistas are expected to think about everyone’s interests except our own. No sooner do we express an opinion than there is someone berating us for not thinking about the interests of somebody else. If we say that we want traffic to be reduced in our city centres, there’s someone along in less than a minute to berate us for not thinking about the aspiring working-class who want to own cars.”

All needs cannot be met, therefore stop trying to pretend they can be. You’re not “expected” to do anything except keep your mouths shut and your facile 6th form opinions to yourselves. Talk about self appointed and self important…………………….

“All needs cannot be met therefore stop pretending that they can.”.

Did anyone say that?

Yes – your implication was that every time you tried to solve a problem for one group, another group became disatisfied becsue you were ignoring or subjugating their needs. In your example listening to greens/cyclists (a favoured guardinista minority who most sane people despise) drew the ire of the car owning majority (a guardinista hate group who are to be taxed, banned and despised at every opportunity). You tried to pretend that both can be accomodated when they cannot – if you ban cars you will piss of car drivers, if you don’t you will piss of cyclists. Zero sum game.

The greens regularly poll an impressive 2% of the vote, therefore in practice very few people actually want cars banned from anywhere, and the solution is not to listen to the most vocal minority cyclists in the first place, thus using limited resources most efficiently and pissing off the fewest number of peope.

Matt Munro @51

But seeing as how the arrival of peak oil means we’re going to get used to the idea of losing our cars eventually, wouldn’t it be sensible to start now to avoid rioting in the street when we do run out?

Actually I was implying that politics is about choices but that a lot of politics now tries to obscure those choices.

But let’s start at the beginning again. As Gary Younge says in the article referenced at the start of tis thread, New Labour decided that it was better off without principlies. It has appealed to the direct interests of various groups and has used spin to obscure the fact that very often choices have to be made between these different direct interets. The typical liberal-left Guardian reader is interested in principles and the New Labour project has been fairly clear that it is not interested in that kind of person. Except that before the 2005 elections, and again now, there is a bit of a scramble for votes – before the 2005 elections New Labour had an “operation bearded lefty” which tried to inflate what had actually been done about aid to Africa or the environment in a mad scramble for the votes of that group of people. There were articles in the Observer from Peter Hain about how the voters of Neath wouldn’t thank us if we let the Tories in. There are contributers here saying that the working class won’t thank us if we let the Tories in this time.

It is all very ironic. New Labour decided that it was better off without principles but, scrambling for votes, starts berating us bearded lefty Guardian readers because we’re not thinking of the interests of someone else. I don’t think that it will work.

If the Laffer curve didn’t exist, the rich would have to invent it in order to perpetuate the notion that they shouldn’t pay their share (in a proportion of how much income they earn) of taxes. You should me the bare facts and I might even buy into the view that a 50p tax rise has no impact. Until then, lame theories don’t do it for me.

I will you the bare facts if you like (whatever the hell that means). A higher direct tax rate has three implications that will affect what additional revenue is raised. Ths first is that it will reduce the indirect tax take. This is for the obvious reason that people don’t spend money that they don’t have. A further implication of that is that if people aren’t spending this extra money that will impact on the economy more generally – they aren’t lending it to entrepreneurs, or spending it at the shops, or even using it to buy government debt. All these factors will negatively impact on the overall tax take – even though the revenue raised directly from the increased rate may increase.

The third factor, which is I suspect entirely unquantifiable, is that an increased tax rate will increase tax revenue by less than a static model might predict, because it affects people’s behaviour. It might reduce their motivation to work the extra hours, or it alternatively might encourage them to utilise sophisticated tax avoidance measures that would otherwise not have ben worth it. At some stage an increased rate will reduce revenue – though when this takes place is debatable.

Now, I’m not arguing that the raised top rate will reduce overall revenue. Only that it might, for the reasons given above. And my question was basically whether overall tax revenues mattered to you in your desire for higher tax rates or, like Sevillista, you believe that “redistribution and fairness can be valuable goals in and of themselves.”

@54

The point that is being missed is that the Laffer Curve *was* invented by the rich to persuade the middle and working classes that they could share in the glut of money they were going to save in taxes… It is and always was a con job, and those who cite it or make use of its principles are either extremely wealthy or extremely stupid.

And people spending money they don’t have – at the instigation of the banks and credit card companies, who told them they could spend it – is what’s made this recession cycle so much worse than it would have been if it had been caused by the US subprime crisis alone.

Hi Sunny, I agree with every word, just hope I can manage to hold it together through the Cameron years ’til we get to the other side :-/

55bluepillnation. Noone forced people to borrow money; they exercised their free will. The left wing middle class appear to deny that people have free will. Is the left wing middle class sayng that people are too stupid to be able to exercise their free will?

@58

Aah – the classic vulgar libertarian “Let them eat cake” argument. Back when I was unemployed at the start of the millennium (2001 was a lousy year to graduate for software engineers), banks and credit card companies were still sending me literature about how great their rates were, how you didn’t have to pay a penny for a certain amount of time. Pressure sales in other words.

Oh, and then there’s the trick they pulled when one was dragged into the red by the previous month’s overdraft charges, thus allowing them to charge you again.. but before they did, they’d call you tw oor three times a day to remind you you could always avoid that charge by going and getting a cash advance on your credit card and paying it into your current account.

Personal responsibility is a very easy thing to espouse when you’re rich and/or well-connected enough to get yourself dug out of any hole.

@ 52 Whay are we going to “lose our cars eventually” ??? Electric cars are avaiable now, and will be commonplace in 5-10 years time. Without some form of flexible, personal transport the economy will collapse, so the question is how to promote cars that use less/different form of energy.

It’s debatable that banning cars from city centres reduces fuel consumption anyway, many people (and I’m one of them) will simply take a longer route, thus creating more pollution/congestion and using more energy.

It’s really simple, if it takes half and hour to get from A to B under normal conditions and 1 hour after “traffic management measures” are taken by a crackpot locxal council, all that happens is cars are on the road fot twice as long and you get twice as much pollution, the opposite of what the anti-car brigade are ostensibly trying to acheive

The left/environmentalists really need to get their heads around the fact that people use cars out of neccessity. I really would rather not have to drive anywhere but being in a full-on job, having 2 kids at school and living in a country that has shitty weather 70% of the year means I have no realistic alternative.

The point that is being missed is that the Laffer Curve *was* invented by the rich to persuade the middle and working classes that they could share in the glut of money they were going to save in taxes… It is and always was a con job, and those who cite it or make use of its principles are either extremely wealthy or extremely stupid.

It has a pretty long pedigree. Ibn Khaldun, a 14th century Muslim philosopher, wrote in his work The Muqaddimah: “It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.”

Or you could look at JM Keynes, whose economics seem to be popular again.

Nor should the argument seem strange that taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance than an increase of balancing the budget. For to take the opposite view today is to resemble a manufacturer who, running at a loss, decides to raise his price, and when his declining sales increase the loss, wrapping himself in the rectitude of plain arithmetic, decides that prudence requires him to raise the price still more–and who, when at last his account is balanced with nought on both sides, is still found righteously declaring that it would have been the act of a gambler to reduce the price when you were already making a loss.

Where the disagreement always lies is precisely where we are on the scale.

In any event, my analysis above wasn’t solely a description of the Laffer Curve. It also dealt with the opportunity cost of raising direct taxation, both in terms of the impact it has on discretionary spending and the wider economy, and relatedly the impact it has on indirect taxation. If you tax more at source, people will spend less money, and you will thereby reduce the VAT take and the Customs & Excise take.

I think we should try and remember a few things before we go any further. New Labour need to be a broad church in order to get elected. Our society, for better or worse, is becoming more and more stratified. The gap between rich and poor is getting wider, not only in general terms, but within the natural Labour vote too. Despite the minimum wage the labour market has been stretched. The Labour Party has done little to address that, whether they could is entirely a different matter, but think about the implications for a second.

Take a skilled manual worker earning around twenty grand a year and his partner earning roughly the same. They are pretty much high up on the income scale and he knows it. He has little in common with the natural working class vote, say the lower skilled (or just less valued) worker on say 10 to 12 thousand a year, supplemented by family credit or even a member of the long term sick or unemployed. That ‘middle income’ couple at the top of the scale have either no affinity with the other working class groups, but are more likely to have more in common with the middle classes.

They resent their taxes being spent on these groups of workers or benefit claimants. These people think (or know depending on their outlook) that to help the most vulnerable in society you are going to hamper the better off.

The thing is, how do you win an election without the votes of ‘Monedo Man’? The demographics mean that the working class are now a shrinking part of the electorate. I use the term ‘electorate’ advisedly, look at voting patterns and intentions. Look at the three elections previous to 1997 Labour win in their heartlands, but middle income working class voters in more affluent areas return Thatcher and Major.

One of the most striking successes (from their perspective) the Tories did in power was lower the income tax rates, whilst raising indirect taxation as well as nailing it onto Fuel knowing that could never be reversed. As we know, income tax cuts really favour the rich and indirect taxation really hurts the poor.

To those on the left who want the Tories to win the next election, be careful what you wish for, you might get it.

The Tories have balanced the tax regime in favour of the rich. The Labour Party have been unable or unwilling to rebalance this because of the backlash that would follow. The ONE tax you would struggle to get away with increasing is basic and top rate income tax. Make no mistake, once elected, Cameron will either cut INCOME tax (the Right Wing press will drop the ‘stealth tax’ tirades) or be replaced with someone who will, making progressive politics in this Country impossible.

I’m entertained by the idea espoused by so many here that:
1. Labour are evil right wing monsters
2. The Tories will be infinitely worse.

I think that you’re all overegging the “OMG Britain will turn into a horrible mess under the Tories!!!!ELEVENTYONE!!212!!!!”. I expect Tory government to be much the same as the current Labour one; centre-right, authoritarian and obsessed with the sound of its own voice and courting the Daily Mail.

I don’t believe that voting Labour or Tory at the next election will make much of a difference, honestly.

61. Jimbo . Many of t he craftsmen, charge hands amd foremen voted Tory in 1979 because he Labour Party and the unskilled /semi-skilled unions reduced the differential in pay betwee the unskilled and skilled coupled with the high rate of taxation. A foremen electrician told me that in the 1970s he was only earning 15% more than someone who was sem-skilled. Many craftsmen , especially those who were charge hands and foremen emigrated . If Labour want to obtain the votes of those with skills and responsibilities, they must accept that these people must be paid considerably more than the uskilled and semi-skilled who have no responsibility, other than to do their job properly.