Sometimes, politicians and their cheerleaders lose touch with reality so completely that even their own natural supporters begin to break ranks and call them out. And that is what has happened today at the Maily Telegraph, where, led by London’s occasional Mayor Alexander Boris de Pfeffel Johnson, and supported by the likes of Benedict “famous last words” Brogan, the hacks have gone totally gaga.
The real world. But only if you're Boris
The reason for this departure from the real world is, once more, the declaration by “Auguste” Balls that a future Labour Government would revert, if only temporarily, to a 50p in the pound top rate of Income Tax, to be levied on incomes above £150,000 a year. Bozza, to no coincidence at all, exceeds that threshold with his weekly “chicken feed” generating rants for the Tel (making him £250,000 per annum).
So it was no surprise to see him going off on a veritable orgy of abuse: “He would rather cut off his nose to spite his face ... stupid ... Gordon Brown stooge ... idiocy ... ignorant ... unlike ed Balls, people have ... common sense” before concluding “The Government should open up some more blue water, and cut the top rate back to 40p”. Not, you understand, that he’s a greedy SOB or anything.
What, then, underpins Bozza’s faith that Balls is wrong? That would be the Laffer Curve, which is routinely wheeled out by the right. This in turn derives from Secretary Mellon’s wrong call in the early 1920s that tax cuts were the driver behind more tax being paid, while ignoring the fact that the USA was at the time emerging from a severe slump that had followed the end of the Great War.
Moreover, it is difficult to be exact as to how much the 50p rate last raised, as it was in place for so short a time, giving those with the capacity to plan the drawing down of income the ability to pay more before it came in, and more again after it had been cut to 45p. Having the 50p rate in place for most, if not all, of a five year Parliament would stop much of that. But most Tel hacks don’t want to listen.
Brogan, still Deputy Editor this morning, gasped “Labour has allowed Ed Balls to put politics before economics, and must face the consequences. Promising to put the top rate of tax back up to 50p has gone down badly with business”. And a third of the 24 business figures lining up to condemn Balls donate to the Tory Party. Fortunately, there is one voice of sanity at the Tel, not that his pals are listening.
That is the eminently pragmatic Peter Oborne, asserting “Let's support Ed Balls's 50p tax rate instead of George Osborne's shameful attack on the poor”. Oborne is a Tory voter by instinct. He also understands that, for many people, their circumstances have not recovered to the pre-recession level. Sadly, the call to his colleagues to return to reality is thus far going unheeded.
Balls has just moved the political barometer Labour’s way. Get over it, Tel hacks.