Clash at top of Labour on permanence of 50p rate
SHADOW business secretary Chuka Umunna said yesterday that a future Labour government could drop the 50 per cent level of tax, distancing himself from leader Ed Miliband’s perceived commitment to the top rate.
Labour said this week that it would lift the top rate of tax back to 50p for those earning over £150,000, in the event of it winning the 7 May General Election.
While the shadow cabinet is behind the plans laid out for the current campaign, Umunna said in an interview: “I wouldn’t want to do it permanently because I would like to see the tax burden as low as possible.”
This comment is in direct contrast to Miliband. While running for his party leadership in 2010 he said: “I would keep the 50p rate permanently. It’s not just about reducing the deficit, it’s about fairness in our society”.
The comments reveal an ideological split between the two senior Labour party figures. Miliband’s approach to tax is more interventionist than the more liberal Umunna’s.
Umunna has worked extensively to build up relations between the Labour party and a wary business community.
He is also widely tipped as a possible replacement for Miliband, should Labour fail to win on 7 May.
In a New Statesman article, Umunna said: “I’m very clear: I did not go into politics to tax people. We should be very clear about that as a party. Ed Balls and I say it all the time to business audiences because we believe it.”
As the comment hints, the clash may also extend further at the top of the Labour party, as it’s known that Ed Balls does not regard any tax rate to be permanent. The shadow chancellor has previously said “no tax rate is set in stone.”
A spokesperson for Ed Miliband said: “As we always do, we set out tax policy in each manifesto for the next parliament.”
Today, Balls will deliver a speech laying out the economic choice between Labour and the Tories, now that all the manifestos are published.
He will attack the Conservatives, claiming they are making unfunded pledges in their pre-election document, and say that Tory plans would cost every working household £1,439 a year.
He will say: “There is a choice between real, concrete, fully-funded pledges from Labour or fantasy and unbelievable promises from the Tories”