There wasn’t much that we hadn’t heard before in Ed Balls’s interview with Andrew Marr this morning. Labour’s Keynesian pitbull deployed his usual attack lines against George Osborne, admitted that the Brown government didn’t do enough to regulate the City and refused to concede that Labour overspent in the years leading up to the crash.
But one line caught my ear. Asked whether he still thought that the starting threshold for the 50p tax rate should be lowered from £150,000 to £100,000, Balls replied: “We’ve not sat down and discussed tax policy.” In other words, he’s still hoping to have the debate with Ed Miliband.
The Labour leader supports a permanent 50p rate, although Alan Johnson’s presence saw a greater emphasis on merely retaining it “for this parliament”, but he has never publicly supported reducing the threshold to £100,000.
One reason why it’s worth watching Balls’s statements on the 50p tax is that he is at one with public opinion on this subject. A Sunday Times/YouGov poll published today found that 33 per cent think the top rate should eventually be brought down, 49 per cent think it should be made permanent (the Miliband position) and 51 per cent would like to see the threshold brought down to £100,000, with 29 per cent opposed.
George Osborne’s recent statement that the 50p rate is “temporary” (in contrast to the “permanent” VAT rise) suggests that he plans to offer significant cuts in direct taxation at the next election. After years of falling living standards, which taxes Labour and the Tories choose to keep and which they choose to cut will do much to determine the result in 2015.
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